Thiagarajar Mills Limited, Madurai v. ACIT, CHENNAI

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER) ..... C.O. NO. 104 / MDS/2007 (IN I.T.A. NO. 1801/MDS/2007) ASSESSMENT YEAR : 2002-03 M/S THIAGARAJAR MILLS LTD. KAPPALUR MADURAI 625 008. PAN : AAACT4304R (CROSS OBJECTOR) V. THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE I MADURAI. (RESPONDENT) CROSS OBJECTOR BY : SHRI R. S RINIVASAN RESPONDENT BY : SHRI P.B. SEKARAN O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : THIS IS A RECALLED MATTER. THIS TRIBUNAL VIDE OR DER DATED 18.6.2010 IN M.P. NO. 91/MDS/2010 HAD RECALLED ITS ORDER IN C.O. NO. 104/MDS/2007 FOR THE PURPOSE OF ADJUDICATING GROUND S NO.12 AND 13 RAISED BY THE ASSESSEE IN THE SAID C.O. GROUNDS NO .12 AND 13 RAISED BY THE ASSESSEE ARE REPRODUCED HEREUNDER:- 12. THE COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE REDUCTION OF DEDUCTION UNDER SECTION 80HHC BY DEDUC TION ELIGIBLE UNDER SECTION 80-IA WHEN THERE IS NO PROVI SION TO SUPPORT SUCH A PROCEDURE. C.O. NO. 104/MDS/07 2 13. THE COMMISSIONER (APPEALS) ERRED IN HOLDING LEVY OF INTEREST UNDER SECTION 234D AS CONSEQUENTIAL WHEN T HE LEVY DOES NOT APPLY TO THIS ASSESSMENT YEAR AT ALL SINCE THE AMENDMENT CAME INTO FORCE ONLY ON 1.06.2003 [97 TTJ 108 (DEL)] 2. AS CLEAR FROM GROUND NO.12 GRIEVANCE OF THE ASS ESSEE IS THAT DEDUCTION UNDER SECTION 80HHC OF INCOME-TAX ACT 19 61 (HEREINAFTER CALLED AS THE ACT) WAS GIVEN TO IT AFTER DEDUCTIN G ITS CLAIM UNDER SECTION 80-IA OF THE ACT. LEARNED COUNSEL FOR THE CROSS OBJECTOR SUBMITTED THAT IN VIEW OF THE DECISION OF HON'BLE JU RISDICTIONAL HIGH COURT IN THE CASE OF SCM CREATIONS V. ACIT (2008) 3 04 ITR 319 (MAD) CLAIM OF THE ASSESSEE UNDER SECTION 80-IA COU LD NOT BE REDUCED WHILE WORKING OUT THE DEDUCTION UNDER SECTI ON 80HHC OF THE ACT. WE FIND THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. MRF LTD. (TCA NO.1020 OF 2009 DATED 27.10.2009) HELD AFTER CONSIDERING DECISION OF THIS TRIBUNAL IN THE CASE O F ACIT V. ROGINI GARMENTS (2007) 294 ITR (AT) 15 (CHENNAI) (SB) AND PLETHORA OF HIGH COURT AND APEX COURT DECISIONS THAT THE LAW L AID DOWN BY JURISDICTIONAL HIGH COURT IN THE CASE OF SCM CREATI ONS COULD BE TAKEN AS VIEW ACCEPTED BY THE DEPARTMENT. WE FIND THAT T HE JURISDICTIONAL HIGH COURT IN THE CASE OF DCIT V. CHOLA TEXTILES LT D. (2008) 304 ITR 256 (MAD) HAS AGAIN TAKEN A SIMILAR VIEW. NOTABLY ASSESSMENT YEAR C.O. NO. 104/MDS/07 3 INVOLVED IN THE CASE OF MRF LTD. (SUPRA) WAS 2004-0 5. WE ARE THEREFORE OF THE OPINION THAT THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80HHC OUGHT TO HAVE BEEN WORKED OUT WITHOUT REDUCING ITS ELIGIBLE DEDUCTION UNDER SECTION 80-IA OF THE ACT. GROUND NO.12 OF THE CROSS OBJECTION OF THE ASSESSEE THEREFORE STA NDS ALLOWED. 3. IN ITS GROUND NO.13 GRIEVANCE OF THE ASSESSEE I S THAT LEVY OF INTEREST UNDER SECTION 234B OF THE ACT DID NOT APPL Y TO THE RELEVANT ASSESSMENT YEAR SINCE THE AMENDMENT CAME IN FORCE O NLY ON 1.6.2003. 4. THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE O F ITO V. EKTA PROMOTERS (P) LTD. (2008) 117 TTJ (DEL)(SB) 289 HEL D THAT SECTION 234D WAS ONLY APPLICABLE FROM ASSESSMENT YEAR 2004- 05. THOUGH THE LEARNED D.R. WAS AT PAINS TO POINT OUT THAT THE RE WAS A THERE WAS A KERALA HIGH COURT DECISION IN FAVOUR OF REVENUE O N THIS MATTER WE FIND THAT THE DECISION OF SPECIAL BENCH IN THE CASE OF EKTA PROMOTERS (P) LTD. (SUPRA) WAS APPROVED BY THE HON'BLE DELHI H IGH COURT IN THE CASE OF DIT V. JACABS CIVIL INCORPORATED (2010) 235 CTR (DEL) 123. THEREFORE WE PREFER TO GO BY THE DECISION OF SPECI AL BENCH CITED SUPRA. ACCORDINGLY ASSESSEE COULD NOT HAVE BEEN F ASTENED WITH LEVY C.O. NO. 104/MDS/07 4 OF INTEREST UNDER SECTION 234D FOR THE IMPUGNED ASS ESSMENT YEAR. SUCH LEVY OF INTEREST SANDS DELETED. GROUND NO.13 IS THUS ALLOWED. 5. IN THE RESULT THE CROSS OBJECTION FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 11 TH FEBRUARY 2011. SD/- SD/- (GEORGE MATHAN) (ABRAH AM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 11 TH FEBRUARY 2011. KRI. COPY TO: (1) CROSS OBJECTOR (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE