Commissioner of Income Tax Vs. Vtm Limited - Court Judgment

Excerpt:
- t.n. estates (abolition & conversion into ryotwari) act, 1948 [act no. 26/1948]. sections 5(2) & 67; [a.p. shah, cj, mrs. prabha sridevan & p. jyothimani, jj] suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. -- t.n. estates (abolition & conversion into ryotwari) act, 1948. sections 5(2) & 67; suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. f.m. ibrahim kalifulla, j.1. the revenue has come forward with this appeal, raising the following substantial questions of law:(i) whether on the facts and circumstances of the case, the tribunal was right in allowing the claim of additional depreciation on windmill under section 32(1)(iia)?(ii) whether on the facts and circumstances of the case, the tribunal was right in holding that generation of power by windmill would amount to manufacture or production of any article or thing?2. we heard ms. pushya sitaraman, learned standing counsel appearing for the appellant. the learned counsel in his submissions contended that the tribunal under similar circumstances earlier disallowed the additional depreciation claimed under section 32(1)(iia) of the income tax act, whereas by the impugned order, the tribunal has taken a diplomatic opposite view and on this ground itself the order is liable to be set aside. the learned counsel then contended that the additional depreciation was claimed on the setting up of wind mills for generation of power and inasmuch as the assessee is only engaged in the manufacture of textile goods, the setting up of a wind mill has absolutely no connection for the manufacture of textile goods, which is the power industry and therefore, the assessee was not entitled to claim the additional depreciation as allowed under section 32(1)(iia) of the act.3. we are not in a position to appreciate either of the contentions of the learned counsel for the petitioner. as far as the first contention is concerned, when the tribunal by the impugned order has applied section 32(1)(iia) of the act, to the facts involved in the case of the assessee and has found that the assessee is entitled for the additional depreciation claimed under the said provision, it cannot be held that simply because co-ordinate bench of the tribunal had earlier taken a different view, the tribunal on this occasion also ought to have followed the same. when we find that the tribunal has applied the law correctly in the impugned order, there is no gain saying that there was an earlier order by the co-ordinate bench and therefore, for that reason, this time also the tribunal should have blindly followed its own earlier decision even if such earlier decision did not reflect the correct position of the law.4. as far as the contention based on section 32(1)(iia) of the act, is concerned, the assessment year pertains to 2005-2006. the provision, which is relevant for our purpose, reads as under:(iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of march, 2002, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii):provided that such further deduction of fifteen per cent shall be allowed to:(a) a new industrial undertaking during any previous year in which such undertaking begins to manufacture or produce any article or thing on or after the 1st day of april 2002; or(b) any industrial undertaking existing before the 1st day of april 2002, during any previous year in which it achieves the substantial expansion by way of increase in installed capacity by not less than ten per cent.5. in the case on hand, the assessee is stated to have set up a wind mill at a cost of rs. 5,85,60,000/- it is true that the assessee is a company engaged in the business of manufacture of textile goods. as far as application of section 32(1)(iia) of the act, is concerned, what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plant should have been acquired and installed after 31st march 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. the said provision does not state that the setting up of a new machinery or plant, which was acquired and installed upto 31.03.2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. therefore, the contention that the setting up of a wind mill has nothing to do with the power industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in section 32(1)(iia) of the act.6. in such circumstances, we are not able to appreciate the contention of the learned standing counsel for the appellant on the ground that the order of the commissioner of income-tax (appeals) as confirmed by the tribunal should be interfered with. it cannot also be said that setting up of a wind mill will not fall within the expression setting up of a new machinery or plant. we do not find any error in the conclusion of the tribunal in confirming the order of the commissioner of income-tax (appeals). we, therefore, do not find any question of law much less substantial question of law to entertain this appeal. the appeal fails and the same is dismissed. no costs.