COMMISSIONER OF INCOME TAX Vs. CHESLIND TEXTILES LTD

JUDGEMENT

(1.) The Revenue has preferred this appeal against the order passed by the Income Tax Appellate Tribunal holding that while ascertaining the profit and accounts of an undertaking, the unabsorbed depreciation of other undertaking cannot be set-off for computing deduction under Section 10B of the Act as held by the Assessing Officer and such an order could not have been interfered with by the Commissioner under Section 263 of the Act.

(2.) The Assessing Authority allowed deduction under Section 10B amounting to Rs.4,75,30,724/- on the business income of Rs.5,36,70,676/- without setting-off unabsorbed depreciation amount of Rs.4,26,23,711/-. The Commissioner of Income tax in his jurisdiction under Section 263 of the Income Tax Act was of the view that the same resulted in excess deduction allowed under Section 10B of the Act and incorrect determination of loss was carried forward.

(3.) The Tribunal held that Assessing Officer had adopted one of the permissible views and such an order cannot be said to be erroneous in view of the decision of the Apex Court in the case of Malabar Industrial Company Ltd., V/s. CIT, 2000 243 ITR 83 in which it has been held that an order is erroneous insofar as it is prejudicial to the interest of revenue if the view of the Assessing Officer is unsustainable in law and therefore, it held that the Revisional Authority was not justified in modifying the order of the Assessing Officer when the Assessing Officer has taken a view which is permissible in law. In fact the said question arose for consideration before this Court in the case of the Commissioner of Income Tax, LTU, V/s. M/s. Yokogawa India Ltd., in ITA No.78/2011 and connected appeals disposed of on 9th August 2011.