High Court Of Madras
Madurantakam Co-Operative Sugar Mills Ltd. vs. DCIT
Section 80J(2), 80J(3), Proviso
Asst. Year 1987-88 & 1988-89
A.S. Venkatachalamoorthy & C. Nagappan, JJ.
Tax Case Appeal Nos. 84 & 85 of 2002
6th April, 2004
Counsel Appeared :
Subbaraya Aiyar, for the Appellant : J. Narayanasamy, for the Respondent
JUDGMENT
A.S. venkatachalamoorthy, J. :
The tax case appeals have been filed against the common order passed by the Tribunal in ITA Nos. 1189 and 1190 of 1992, pertaining to the asst. yrs. 1987-88 and 1988-89.
The appellant, viz., the Madurantakam Co-operative Sugar Mills Ltd., Padalam, is engaged in the business of manufacture of sugar. While computing the total income for the asst. yrs. 1987-88 and 1988-89, the AO allowed the assessee’s claim for setting off the relief under s. 80J, brought forward from the asst. yrs. 1979-80 to 1984-85.
For the asst. yr. 1987-88, the assessment order was passed under s. 143(3) of the IT Act, 1961 on 28th Feb., 1990, and for the asst. yr. 1988-89 on 24th Oct., 1990. The CIT, who examined the matter, noticed that the initial assessment year for which the assessee had become entitled to the deduction under s. 80J was the asst. yr. 1978-79 and so as per the provisions of sub-s. (2) of s. 80J, the assessee being a co-operative society could carry forward and set off the deduction under s. 80J against the income up to the asst. yr. 1984-85 only. The CIT also took the view that the deduction allowed under s. 80P(2)(a)(i) and under s. 80P (2)(a)(iii) was not in order as the assessee was a co-operative society engaged in the manufacture of sugar and not one engaged in the business of banking or providing credit facilities for its members. As the CIT felt that the assessments for both the years required to be revised, he issued a notice under s. 263 of the IT Act to the assessee. By a common order, the CIT directed the AO to revise and modify the assessments by withdrawing the deduction allowed under s. 80J so also to revise and modify the assessments by disallowing the deductions under s. 80P(2)(a). Being aggrieved by the said order, the assessee filed ITA Nos. 1189 and 1190 of 1992 before the Tribunal, “B” Bench, Madras. The Tribunal, after elaborately considering the matter, upheld the order of the CIT only in regard to the deduction allowable under s. 80J. The assessee, being aggrieved by the said common order passed in those two appeals, has preferred these two tax case appeals.
A reading of s. 80J(2) of the IT Act would show that the deduction specified in sub-s. (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles and each of the four assessment years immediately succeeding the initial assessment year. In the case of the assessee, the initial assessment year was 1978-79. The assessee being a co-operative society, the provisions of the sub-s. (2) will have effect as if for the words “four assessment years”, the words “six assessment years” had been substituted. If the six year period is reckoned from the asst. yr. 1978-79, it would expire with the asst. yr. 1984-85. Rightly the Tribunal rejected the plea of the assessee that six year period will have to be considered from the asst. yr. 1984-85 and not from the initial asst. yr. 1978-79. In fact, the proviso after sub-s. (3) clarifies the position beyond any doubt. The order of the Tribunal is perfectly right and does not call for any interference.
5. In the result, the appeals are dismissed.
[Citation : 274 ITR 452]
