TMI Blog2020 (4) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... i, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Prayag Jha For the Revenue : Shri Pankaj Garg ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 28-11-2007 passed by the Commissioner of Income Tax (Appeals)-II, Pune [ CIT(A)‟] for assessment year 2004-05. 2. We find this appeal was filed with a delay of 2937 days. The ld. AR contended that this Tribunal condoned the said delay with a condition subject to payment of cost of ₹ 20,000/- and accordingly, the assessee paid the said amount on 16-01-2018. The ld. AR placed on record on-line receipt showing payment of cost. Therefore, in view of the same, we proceed to hear the main appeal on merits. 3. Shri Prayag Jha, the ld. AR submits that the assessee is not interested to prosecute ground No. 1 and prayed to dismiss the same as not pressed. Accordingly, the ground No. 1 raised by the assessee is dismissed as not pressed. 4. Ground Nos. 2 and 3 raised by the assessee challenging the action of CIT(A) in confirming the order of AO on account of benefit under Sales Tax is not eligible for deduction u/s. 80IA(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under section 80IA of the Act at the exercise of an option of 10 consecutive years. Further, the Tribunal also had held that where the losses have been adjusted against the assessable income other than the profits of the industrial undertaking, then the said losses could not be availed to be adjusted against the income arising in the year in which the assessee had shown profits from the said industrial undertaking. 28. The learned Departmental Representative for the Revenue placed reliance on the order of CIT(A). 29. We have heard the rival contentions and perused the record. We find that both the issues raised vide grounds of appeal Nos.3 to 5 were considered by the Tribunal in assessee‟s own case and it was held as under:- 7. We have heard the rival contentions and perused the record. We find that the issue arising in the present appeal in relation to the provisions of section 80-IA(5) of the Act. Similar issue arose before the Tribunal in the case of Shri Sangram Patil vs. ITO in ITA No.177 178/PN/2011 relating to assessment year 2006-07 2007-08 vide dated 12.12.2012. The Tribunal considered the provisions of section 80-IA(5) of the Act and observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the assessee u/s. 80IA in respect of the profit earned by it in A.Y. 2004-05. The Ld. A.R. submitted that sub-section (2) of Section 80IA provides an option to the assessee to choose 10 consecutive A.Ys. out of 15 years for claiming the deduction. He submitted that the term initial year in sub-section (5) of 80IA is not defined and is used in contradiction to the words beginning from the year used in sub-section (2). He submitted that the assessee chose A.Y. 2004-05 as initial A.Y being the first year in which it claimed deduction u/s. 80IA and therefore, losses/depreciation beginning from A.Y. 2004-05 alone could only be brought forward and set off. Depreciation of the preceding A.Y. 2002-03 could not have been notionally brought forward and set off against profit for the A.Y. 2004- 05. The Ld. A.R. placed heavy reliance on the decision of Hon‟ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra). He submitted that the decision of Hon‟ble Madras High Court will prevail upon the decision of the Special Bench of the Tribunal in the case of ACIT Vs. Goldmine Shares and Finance (P) Ltd. (Supra) followed by the Pune Bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ACIT (Supra) has also decided an identical decision in favour of the Revenue following the decision of Special Bench of the Tribunal in the case of ACIT Vs. Goldman Shares Finance (P) Ltd. (Supra). He submitted that the Hyderabad Bench of the Tribunal while deciding the issue has also discussed the decision of Hon‟ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra). The Ld. D.R. submitted that even in the case of Liberty India Vs. CIT (Supra), the Hon‟ble Supreme Court has been pleased to explain the intention of Parliament and scope of deduction u/s. 80IA and 80IB of the Act. The Hon‟ble Supreme Court has been pleased to hold that such profits are to be computed as if such eligible business is the only source of income of the assessee. The devices adopted to reduce or inflate the profit of eligible business has got to be rejected in view of the overriding provisions of Sub-section (5) of Section 80IA of the Act. 13. Having been considered the above submissions, we find that the issue raised in Ground No. 1 as to what would be the initial A.Y for the purposes of Section 80IA(5) of the Act has been decided in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Central Excise Vs. Valson Dyeing, Bleaching and Printing Works (Supra) wherein the Hon‟ble Bombay High Court has been pleased to hold in a case of excise matter that Tribunal is bound by the decision of High Court , even of a different State, so long as there is no contrary decision of any other High Court. The Hon‟ble Bombay High Court has been pleased to hold further that the Tribunal had no option but to follow the judgment of the Madras High Court. An authority like an Income Tax Tribunal acting anywhere in the country has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court on that question. We thus respectfully following the ratio laid down by the Hon‟ble jurisdictional High Court in the case of Commissioner of Central Excise Vs. Vakson Dyeing, Bleaching and Printing Works (Supra) hold that the Tribunal is bound by the decision of the Hon‟ble Madras High Court on an identical issue in the case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra). We thus respectfully following the decision taken by the Hon‟ble Madras High Court in that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not on the basis of decision of Special Bench of the Tribunal in the case of Goldmine Shares and Finance (P) Ltd. (supra) which was to the contrary. In this context, the Tribunal came to the conclusion that when the assessee exercised option identifying ten consecutive years as contained in sub-section (2) of section 80-IA of the Act, only the losses of the year beginning from such initial assessment year are to be brought forward and set-off while applying the provisions of section 80-IA(5) of the Act and not the losses of earlier years which otherwise were set-off against other income of the assessee. 8. At the time of hearing, the learned DR has not brought to our notice any decision of a High Court contrary to that of the Hon‟ble Madras High Court in the case of Velaydhaswamy Spinning Mills (P) Ltd. (supra) on the issue in question. Therefore, we find that the controversy before us is no longer res integra and is in fact covered in favour of the assessee by the decision of Pune Bench of the Tribunal in the case of Serum International Ld. (supra) which has been decided following the decision of the Hon‟ble Madras High Court in the case of Velaydhaswamy Spi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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