Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s. Best Corporation Pvt. Ltd. Versus Joint Commissioner of Income Tax, Tirupur Range, Tirupur.

2015 (5) TMI 812 - ITAT CHENNAI

Disallowance of deduction under section 80IA - sale of carbon credit, TUF interest subsidy receipt and generation loss compensation receipt - Held that:- As relying on case of C.N.V Textiles Pvt. Ltd., Vs. DCIT [2015 (5) TMI 808 - ITAT CHENNAI] we hold that income from carbon credit is capital receipt not exigible to tax and such income is not eligible for deduction under section 80IA of the Act.

As relying on case of C.N.V Textiles Pvt. Ltd., Vs. DCIT [supra] we hold that TUF is a ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wer generation/hosiery goods, etc., and it has claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment year in question and for the subsequent years as well. Having exercised its option and its losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. There appears to be no distinction on facts in relation to the decision reported in Velayudh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

I, Coimbatore dated 29.05.2014 for the assessment year 2011-12. The cross objection is filed by the Revenue with delay of 119 days. ITA No.1958/Mds/2014: 2. The first issue in the appeal of the assessee is that Commissioner of Income Tax (Appeals) erred in confirming the disallowance of deduction under section 80IA on sale of carbon credit, TUF interest subsidy receipt and generation loss compensation receipt. The Commissioner of Income Tax (Appeals) erred in not accepting the alternate claim th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess receipt for the purpose of section 80IA. He places a copy of on the decision of co-ordinate Bench of this Tribunal in the case of CNV Textiles Pvt. Ltd., Vs. DCIT., in ITA No.746/Mds/2014 dated 21.11.2014 . 4. Departmental Representative supports the orders of lower authorities. 5. Heard both sides. Perused orders of lower authorities. The co-ordinate Bench of this Tribunal in the case of C.N.V Textiles Pvt. Ltd., Vs. DCIT., in ITA No.746/Mds/2014 dated 21.11.2014 held as under:- 7. First we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

21 ITR (Trib) 186 (Hyd) upheld by the hon'ble A.P high court in Income Tax Appellate Tribunal Appeal No.60 of 2014 in order dated 19.2.2014 that these receipts are not revenue but capital in nature. The CIT(A) turns down this alternative plea as well. There is no quarrel about this factual backdrop. We find that a co-ordinate bench of the 'tribunal' in P.K.Ganeshwr vs ACIT - I.T.A.No. 2091/ Mds/2013 dated 17.7.2014 has accepted a similar plea raised in lower appellate proceedings for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

idy is concerned, counsel for the assessee submits that similar issue is decided by the co-ordinate Bench of this Tribunal in the case of C.N.V Textiles Pvt. Ltd., Vs. DCIT., in ITA No.746/Mds/2014 dated 21.11.2014, wherein the Tribunal following the decision of Kolkata Bench of this Tribunal in the case of M/s. Gloster jute Mills Ltd. Vs. Addl. CIT in ITA No.687/Kol/2010 dated 2.7.2014 and the decision of Hon ble Punjab & Haryana High Court in the case of CIT Vs. Shamlal Bansal [(2011) 11 T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aims its TUF receipts of ₹ 7.58 lakhs are also capital receipts. The assessment as well as lower appellate treat the same as revenue receipts not entitled for section 80IA deduction. This amount represents interest subsidy @ 5% separately accounted for as receipt instead of netting the same as against interest paid amount. It emerges from case law [2011] 11 taxmann.com 369 (P&H) CIT vs Shamlal Bansal that their lordships have held that a TUF receipt is only a capital receipt not liable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing the said decision, we hold that TUF is a capital receipt and not a revenue receipt and not entitled for deduction under section 80IA on such receipt. 11. Insofar as generation loss compensation receipt is concerned, counsel for the assessee submits that the issue is squarely covered by the co-ordinate Bench of this Tribunal in the case of C.N.V Textiles Pvt. Ltd., Vs. DCIT., in ITA No.746/Mds/2014 dated 21.11.2014. 12. Departmental Representative supports the orders of lower authorities. 13. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

paid the aforesaid amount in lieu of assured power generation failure at a rate fixed very well in advance. In identical circumstances, we find that in case law [2011] 16 taxmann.com 75(Delhi) Magnum Power Generation Ltd. vs DCIT holds that such a receipt arising from compensation is entitled for section 80IA deduction. The Revenue does not cite any judicial precedence in its favour. Thus, we adopt the same view and allow the assessee s corresponding ground. The Assessing Officer is directed to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

under section 80IA of the Act. The Commissioner of Income Tax (Appeals) ought to have appreciated that as per provisions of section 80IA(5) eligible undertaking should be treated as only source of income for computing quantum of deduction allowable under section 80IA. 16. The Assessing Officer while completing the assessment restricted the deduction under section 80IA of the Act on the windmill profits observing as under:- 3.3 On a plain reading of the provisions of Section 80IA(5) it is mandat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar for which the determination is to be made". 3.4 The plain import of this section which overrides every other provisions of the IT Act 1961 is that though losses pertaining to the eligible business is set off against the other business of the assessee, for the purpose of section 80IA(5) the losses of the earlier years of the eligible will have to be notionally brought forward and set off against the income if any of the eligible business for the succeeding assessment year. When such a cou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e notionally brought forward and set off for computing the deduction u/s.80IA. 3.6 The Department has filed a Special Leave Petition in the Honorable Supreme Court against the decision of the Honorable High Court and it has been admitted by the Honorable Supreme Court. In the eventuality of the Supreme Court overturning the decision of the Honorable High Court in the case of M/s Sri Velayuthaswamy Spinning Mills (P) Ltd v CIT, the department may not be able to revisit the assessment because of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unsel for the assessee supports the order of the Commissioner of Income Tax (Appeals). 19. Heard both sides. Perused orders of lower authorities and the decision of the jurisdictional High Court in the case of CIT Vs. Sri Velayudhaswamy Spinning Mills P.Ltd. (supra).The Hon ble High Court in the case of Sri Velayudhaswamy Spinning Mills Pvt.Ltd. Vs. ACIT (supra) held that for the purpose of computing deduction under section 80IA, initial assessment year means the year in which the assessee begin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

otal income of the assessee, a deduction of an amount equal to 100 per cent of the profits and gains derived from such business for ten consecutive assessment years. Deduction is given to eligible business and the same is defined in sub-so (4). Sub-s.(2) provides option to the assessee to choose 10 consecutive assessment years out of 15 years. Option has to be exercised. If it is not exercised, the assessee will not be getting the benefit. Fifteen years is outer limit and the same is beginning f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be noted in sub-s. (5) and they are as under: "(1) it starts with non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored; (2) it is for the purpose of determining the quantum of deduction; (3) for the assessment year immediately succeeding the initial assessment year; (4) it is a deeming provision; (5) fiction created that the eligible business is the only source of income; and (6) during the previous year relevant to the initial .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version