2024 (12) TMI 1542 - HC - Income Tax

Allowance of only 1/10th u/s 35E as against the claim u/s 37 -entitlement to deduction of expenses claimed wrongly described as Prospecting Expenses - whether Tribunal is right in holding that the appellant is entitled to get relief only under Section 35E of the Act in respect of expenditure in question - Appellant entitlement to relief u/s 80IA in respect of 650 TPD Kiln? - Tribunal held that the appellant is not entitled to get relief u/s 80IA even though the new kiln is independent and a viable unit HELD THAT - The aforesaid questions would have to be answered against the assessee as the same issues had arisen from the order of the Tribunal for AY.1996-97 and the assessee/appellant has accepted the order of the Income Tax Appellate Tribunal. In view of the aforesaid position the assessee does not seriously pursue these appeals.

Summary

**Summary of Judgment:****Court:** Madras High Court **Judges:** Hon'ble Dr. Justice Anita Sumanth and Hon'ble Mr. Justice G. Arul Murugan **Appellant's Counsel:** Mr. P.J. Rishikesh **Respondent's Counsel:** M/s. J. Narayanasamy **Order Overview:**The court addressed an error in the previous order dated 24.10.2024 regarding the tax impact exceeding the threshold as per Circular No.9 of 2024. Consequently, the order was recalled, and the following legal questions were considered:1. **Section 35E vs. Section 37:** Whether the Tribunal was justified in allowing only 1/10th under Section 35E instead of the claim under Section 37.2. **Prospecting Expenses Deduction:** Whether the Assessee was entitled to a deduction of Rs 23,03,670/- for the A.Y 2000-2001, labeled as "Prospecting Expenses."3. **Application of Section 35E(5):** Whether the Tribunal was justified in its application of Section 35E(5) regarding prospecting expenses.4. **Commercial Production and Section 35E:** Whether Section 35E applies when commercial production has commenced.5. **Relief under Section 801A:** Whether the Appellant is entitled to relief under Section 801A for a 650 TPD Kiln.6. **New Kiln as a Viable Unit:** Whether the Tribunal was correct in denying relief under Section 80IA despite the new kiln being independent and viable.**Outcome:**The court noted that similar issues had been resolved against the assessee in a prior order dated 26.12.2002 for the assessment year 1996-97, which the assessee had accepted. Consequently, the assessee did not actively pursue these appeals. Both tax case appeals were dismissed without costs.