The Commissioner Of Income Tax, Corporate Circle 2, Madurai v. Mepco Industries Limited,Madurai-2

In the High Court of Judicature at Madras Dated : 02.1.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM The Honourable Mr.Justice N.SATHISH KUMAR Tax Case Appeal Nos.434 and 435 of 2017 & CMP.No.10849 of 2017 The Commissioner of Income Tax, Corporate Circle 2, Madurai ...Appellant/Appellant in both the appeals Vs Mepco Industries Limited,Madurai-2. ...Respondent/Respondent in both the appeals APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 30.12.2016 respectively inITA.Nos.2428 and 2429/ Mds/2016 on the file of the Income TaxAppellate Tribunal Madras 'A' Bench respectively for theassessment years 2012-13 and 2013-14 and against the order ofthe Commissioner of Income -Tax (Appeals-I) and made inITA.Nos.0059/2015-16 of ITA.Nos.0206/2015-16 dated:13/05/2016for the Assessment year 2012-13 & 2013 & against the order ofthe Deputy Commissioner of Income Tax Corporate Circle and madein PAN.No. dated:26/02/2016 & 31/03/2015 for theAssessment year 2012-13&2013-14. (Judgment was delivered by T.S.SIVAGNANAM,J) Heard the learned Standing Counsel for the appellant.2. These appeals by the Revenue challenge the common orderpassed by the Income Tax Appellate Tribunal, which decided theissue in favour of the assessee. The appeals have been filedraising the following substantial questions of law : https://hcservices.ecourts.gov.in/hcservices/ “i. Whether the Income Tax AppellateTribunal is correct in law in holding thatthe assessee is entitled to claim deductionunder Section 80IA irrespective of whetherthe product is sold by it in open market orused by itself for consumption in its otherplants or units ? ii. Whether the Income Tax AppellateTribunal is right in holding that the profitarising on the steam generated and consumedalbeit captively can be subjected todeduction as long as it is an output of theassessee unit, it matters little whether itis the principal or a by-product ? And iii. Whether the Income Tax AppellateTribunal was right in following the decisionof the TANFAC Industries Limited, which isnot squarely applicable to the present casebecause in the former case, the issue iswhether the assessee is entitled todeduction under Section 80I, when it hadcaptively consumed the gas produced by itwhereas in the present case, the assesseeclaimed deduction under Section 80IA on thesteam produced as a by-product in its gaspower division where electricity isgenerated by using natural gas, which isused for captive consumption in its chloratedivision?” 3. The Revenue seeks to withdraw theseappeals on account of low tax effect interms of Circular No.3 of 2018 dated 11.7.2018 issued by the Central Board ofDirect Taxes. 4. In the light of the above, these appeals are dismissed aswithdrawn and the substantial questions of law raised are leftopen. In the event, in any of the cases, the tax effect is abovethe threshold limit fixed in the said circular under exceptionalclauses mentioned in the circular, liberty is granted to theRevenue to make a mention to this Court to restore the appealsto be heard and decided on merits. No costs. Consequently, theconnected CMP is also dismissed. Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Madras 'A' Bench. Madras 'A' Bench. 2.The Deputy Commissioner of Income Tax,Corporate Circle-2, Madurai.Corporate Circle-2, Madurai. 3.The Commissioner of Income-Tax(Appeals-I),Madurai.Madurai. +1cc to Mr.H.Swaminathan, Advocate, S.R.No.58 TCA.Nos.434 & 435 of 2017and CMP.No.10849 of 2017VGII(CO)GSP(06/02/2019)