Madras High Court
M/S.Sabari Industries Ltd vs The Assistant Commissioner Of Income ... on 13 August, 2024
Bench: R.Suresh Kumar, C.Saravanan
T.C.A.No.455 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 13.08.2024
CORAM
THE HON'BLE MR.JUSTICE R.SURESH KUMAR
AND
THE HON'BLE MR.JUSTICE C.SARAVANAN
Tax Case Appeal No.455 of 2015
M/s.Sabari Industries Ltd.,
37A, Laxmanampatti, Nallur P.O
Kulathur Taluk, Pudukkottai District 622 504. ... Appellant
Vs.
The Assistant Commissioner of Income Tax
Company Circle I, Trichy. ... Respondent
Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961
against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench,
Chennai, dated 19.12.2014 made in I.T.A.No.1828/Mds/2013.
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For Appellant : Mr.A.S.Sriraman
for M/s.S.Sridhar
For Respondent : Mr.S.Rajesh, Junior Standing Counsel
for Mr.J.Narayanaswamy
Senior Standing Counsel
JUDGMENT
(Delivered by R.SURESH KUMAR, J.)
The substantial questions of law raised in this appeal have already been
considered by a Division Bench of this Court in T.C.A.No.551 of 2013 in the
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matter of M/s.Brakes India Limited -vs- The Deputy Commissioner of
Income Tax, Chennai dated 14.03.2017.
2. The Division Bench in the said judgment, has passed the following
order.
" 5.In order to appreciate the aforesaid submissions, the
following facts are required to be noticed:
5.1.The Assessee had claimed additional depreciation under
Section 32(1)(iia) amounting to Rs.1,89,67,159/- during the relevant
assessment year, i.e., AY 2006-07.
5.2.The additional depreciation was claimed at the rate of
7.5% being 50% of the prescribed rate, which was 15%.
5.3.The depreciation was claimed at the said rate as the
subject asset was used for less than 180 days.
5.4.The said depreciation was claimed in the preceding
assessment year, i.e., AY 2005-06, which is, when the asset was
installed and put to use.
5.5.In the relevant assessment year i.e., AY 2006-07, the
Assessee sought to claim the balance depreciation equivalent to 7.5%.
The Assessing Officer, however, rejected the claim made by the
Assessee qua the balance additional depreciation.
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5.6.Being aggrieved, the Assessee carried the matter in appeal
to the Commissioner of Income Tax (Appeals) [in short, CIT(A)]. The
CIT(A) sustained the order of the Assessing Officer. The Tribunal, did
likewise and therefore, the Assessee, is in appeal, before us.
6.As indicated right at the outset, the issue is covered in favour
of the Assessee, by virtue of our judgment in the matter of
Commissioner of Income Tax, Madurai Vs. M/s.Shri T.P.Textiles
Private Limited. As noticed above, the Karnataka High Court in CIT
V. Rittal India (P.) Ltd., [2016] 66 taxmann.com 4 (Karnataka), has
also taken the same view.
6.1.We are informed that the Revenue has not assailed the
judgment of the Karnataka High Court.
6.2.In our judgment in the matter of Commissioner of Income
Tax, Madurai Vs. M/s.Shri T.P.Textiles Private Limited, we have
noticed the aforementioned judgment of the Karnataka High Court.
7.In so far as the first submission advanced by Mr.Ravi is
concerned, according to us, the same is completely untenable.
7.1.The judgment of the Division Bench of this Court in
M.M.Forgings Limited Vs. Additional Commissioner of Income Tax,
did not deal the issue, which is at hand.
7.2.The issue, in hand, is as to whether balance additional
depreciation could be carried forward to the year, following the
previous year, in which, additional depreciation was claimed.
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7.3.The Division Bench in M.M.Forgings case the said case
was not concerned with the issue, with which, we are faced, that is, the
right to carry forward the balance additional depreciation. Therefore,
the judgment is completely distinguishable.
8.The second submission of Mr.Ravi, that Circular no.8 of
2002 dated 27.08.2002 and Circular no.281 dated 29.11.1979, have
not been taken note of, in our judgment rendered in
Commissioner of Income Tax, Madurai Vs. M/s.Shri T.P.Textiles
Private Limited, according to us, will not impact, either the reasoning
or the conclusion reached by us, in the said matter.
8.1.It is pertinent to note that the Circular no.281 dated
29.11.1979, pre-dates the insertion of the relevant provision, i.e.,
second clause to Section 32 (1) (iia). The said clause (iia), admittedly,
was inserted by virtue of the Finance (No.2) Act, 2002, with effect
from 01.04.2003.
8.2.In so far as the second Circular is concerned, i.e, Circular
no.8 of 2002 dated 27.08.2002, in our view, in no way, helps the case
of the Revenue. The Circular does not dwell on the point which we
are confronted with.
8.3.In any case, according to us, the Circulars are not binding
on the Court, though, they may be binding on the Revenue. [See CIT
V. Hero Cycles Pvt. Ltd., (1997) 228 ITR 463 (SC)].
9.The last submission that Mr.Ravi advanced, was, in fact,
predicated on the reasoning given by the Assessing Officer, which,
according to us, is misconceived, as the manner of calculation of
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depreciation, cannot, to our minds, impede the claim of the Assessee
for balance additional depreciation, in the year following the previous
year, in which, the said asset is installed and put to use.
10.Therefore, for the aforesaid reasons, we find no merit in the
submissions advanced by the Revenue. "
3. The said order of the Division Bench has also been upheld by the
Hon'ble Supreme Court in Commissioner of Income Tax, Chennai -vs- Aztec
Auto (P) Ltd., [2020] 119 taxmann.com 215 (Madras) , which was also
dismissed by the Supreme Court by order dated 24.09.2018.
4. When that being the position, the questions of law already being
answered in favour of the assessee and against the revenue, the issue raised
in this appeal is covered by the said decision, we are inclined to follow the
same. Accordingly, this appeal is allowed in favour of the assessee and against
the Revenue. No costs.
(R.S.K.,J.) (C.S.N.,J.)
13.08.2024
NCS : Yes/No
Index : Yes/No
KST
To
The Income Tax Appellate Tribunal
'C' Bench, Chennai.
R.SURESH KUMAR, J.
https://www.mhc.tn.gov.in/judis
AND
C.SARAVANAN, J.
KST
13.08.2024
https://www.mhc.tn.gov.in/judis
