Vtm Ltd., Virudhunagar vs Department Of Income Tax

अपीलाथ क ओर से / Appellant by : Shri. S. Das Gupta, IRS, JCIT. यथ क ओर से / Respondent by : Shri. R. Srinivasan, Advocate

सन ु वाई क तार ख/Date of hearing : 16.02.2015 घोषणा क तार ख /Date of Pronouncement : 27.02.2015

आदे श / O R D E R

PER S.S. GODARA, JUDICIAL MEMBER

This Revenue's appeal for assessment year 2010-11;

emanates from order dated 08.08.2014 passed by the Commissioner of

Income Tax (Appeals)-II, Madurai in ITA No. 25/13-14, allowing :- 2 -: I.T.A.No.2832/Mds/2014

section 80IA deduction of E2,13,77,557/-, in proceedings under section

143(3) of the Income Tax Act, 1961 [in short the "Act"].

2. The assessee/company is engaged in textile business. It had

filed its 'return' on 22.09.2010 stating income of E5,20,99,116/-. The

same was 'summarily' processed.

3. The Assessing Officer took up 'scrutiny'. He inter-alia noticed

the assessee claiming section 80IA deduction of E2,13,77,557/- for its

three windmills. Two of them were installed in assessment year

2005-06. The third one in assessment year 2006-2007. It had chosen

the impugned assessment year as 'initial assessment year' for claiming

the said deduction. The case law of M/s. Velayutha Swamy Spinning

Mills vs. ACIT, 340 ITR 477 was also quoted. The Assessing Officer in

assessment order 22.03.2013 referred to section 80IA (5) of the Act

and observed that wind mills treated as separate units did not give rise

to any positive income after setting off unabsorbed depreciation from

the years of installation. He observed that the Revenue's special leave

petition is pending before the hon'ble Apex court. The assessee's

alternative plea of segregating windmills as per respective years of :- 3 -: I.T.A.No.2832/Mds/2014

installation also stood declined. This resulted in the impugned

disallowance of E2,13,77,557/-.

4. The assessee preferred an appeal. The CIT(A) has followed the

aforesaid case law and his orders in preceding assessment years for

treating the assessee eligible for section 80IA deduction. Therefore,

the Revenue is in appeal.

5. We have heard both sides and perused the Revenue's findings.

There is no dispute on facts. The assessee has not claimed section

80IA deduction in the years of installation (supra) of the windmills.

The impugned assessment year has been treated as 'initial assessment

year' for claiming section 80IA relief. The Revenue seeks to set off

unabsorbed depreciation from the years of installation onwards

against the profits of the 'initial assessment year' i.e. the impugned

assessment year. We find that the hon'ble jurisdictional high court

has decided the very substantial question of law in the assessee's

favour. The same view is reiterated in a recent decision (2015) 371

ITR 1 (Madras) CIT vs. Eastern Exports Global Clothing Private Limited.

We draw support therefrom and uphold the order under challenge.

The Revenue's ground is rejected.

:- 4 -: I.T.A.No.2832/Mds/2014

.

6. The Revenue's appeal is dismissed.

Order pronounced on Friday, the 27th of February,

2015, at Chennai.

Sd/- Sd/- (ए. मोहन अलंकामणी) (एस. एस. गोदारा) (A.MOHAN ALANKAMONY) (S.S. GODARA) लेखा सद य/ ACCOUNTANT MEMBER या!यक सद य/ JUDICIAL MEMBER

चे#नई/Chennai. $दनांक/Dated:27.02.2015. KV

आदे श क त'ल(प अ)े(षत/Copy to: 1. अपीलाथ /Appellant 2. यथ / Respondent 3. आयकर आयु+त (अपील)/CIT(A) 4. आयकर आयु+त/CIT 5. (वभागीय त न.ध/DR 6. गाड फाईल/GF.