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TMI Blog2016 (5) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07, declaring a taxable income of Rs. 36,61,15,170. The case was taken up for scrutiny and an order was passed, under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), on December 21, 2009, making a total addition of Rs. 6,90,458. The case was reopened, under section 147 of the Act, for the reason that the assessee had claimed excessive expenses on product development expenses, under section 35 of the Act, and the deemed dividend, under section 2(22)(e), was left to be taxed. An order under section 143(3), read with section 147 of the Act, had been passed with the following additions (a) the Revenue expenditure under section 35(2), disallowed Rs. 7,12,37,915, (b) disallowance of additional expenditure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, dated June 26, 2015, the Department has filed the present appeal, before this court, under section 260A of the Act, raising the following substantial questions of law : "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in allowing the deduction under section 80-IA of the Income-tax Act, when there is no positive income from the industrial undertaking during the initial assessment year ? 2. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in holding that the assessee is entitled to deduction under section 80-IA following the decision of the jurisdictional High Court in the case of Velayudhaswamy Spinning Mills P. Ltd. [2012] 340 ITR 477 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IA starts with a non-obstante clause, the restriction put in sub-section (5) will prevail and deduction under section 80-IA has to be restricted accordingly. G. The Income-tax Appellate Tribunal ought to have appreciated that as per provisions of section 80-IA(5) the undertaking eligible for deduction should be treated as only source of income for computing the quantum of deduction." 4. Per contra, the learned counsel appearing on behalf of the respondent had submitted that the decision rendered in Velayudhaswamy Spinning Mills P. Ltd. v. Asst. CIT [2012] 340 ITR 477 (Mad) ; [2010] 231 CTR (Mad.) 368, squarely applies to the facts of the present case. He had further submitted that a Division Bench of this court had rendered a similar dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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