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2022 (6) TMI 1315 - AT - Income TaxDeduction u/s 80IA for its unit at Silvassa - 10th year of commercial production - Addition on the ground that AY 2008-09 is the eleventh (11th) year of such a claim, whereas according to assessee AY 2008-09 is the tenth (10th) year of claim u/s 80IA of the Act and therefore it is a legitimate claim - HELD THAT:- We note that as per Section 80IA of the Act, for the first five years, the assessee was entitled to claim 100% deduction and for the rest of the five years, the assessee can claim deduction only 30% of the profits from the eligible unit. Thus since the assessee’s first year of claim was in A.Y.1999-2000, the assessee got upto A.Y.2003-04 (five years from AY.1999-2000) 100% deduction (refer page no. 102 of the P.B) and thereafter the assessee received only 30% deduction from AY. 2004-05 deduction u/s 80IA of the Act for Silvassa Unit was granted by the AO at 30% to the tune of Rs.48,31,672/-. And for A.Y.2007-08 i.e. 9th year, the assessee received 30% deduction which is evident from the page 106 of the paper book. We find that 10th consecutive year as per the assessment years framed by AO’s as referred to (supra) is A.Y.2008-09, since the first year of deduction u/s 80IA of the Act in respect of profits for Silvassa Unit was for A.Y.1999-2000 and ten (10) year has to be reckoned from that year, so AY 2008-09 is the tenth year and therefore, the AO erred in holding that the assessee is not entitled for deduction u/s 80IA of the Act because AY 2008-09 is the 11th years. We find that the AO had erred in denying the claim of deduction u/s 80IA of the Act for A.Y.2008-09 and likewise the Ld. CIT(A) also erred in denying the claim of the assessee. Therefore, we are inclined to allow the claim of the assessee u/s 80IA of the Act and direct the AO to allow the claim. Ground no. 1 is allowed. Recomputation of the profits of the eligible unit at Silvassa at the reduced amount - reallocation of various expenses on turnover basis (as against on actual basis and partly on turnover basis) - HELD THAT:- As shown by the Ld. AR that the allocation was based on turnover of the lubes sales of respective plants. Thus, we note that the AO was wrong to observe that the expenses were allocated more to the non-eligible unit at Thane and expenses were lesser allocated to the eligible unit (Silvassa Unit) which occasioned the AO to allocate more expenses to Silvassa Unit. We note that the total expenses were to the tune of Rs.9,645.84 crores out of which Rs.5,237.93 crores pertained to the non 80IA Unit (Thane) and Rs.4,264.70 crores pertained to the 80IA Unit at Silvassa. Thus, it is seen that the expenses incurred by the assessee for Thane unit was 54.3% and 44% to the Silvassa Unit. Therefore, we are of the considered opinion that the AO erred in re-allocating the expenses and thus reducing the 80IA of the Act profits shown for the unit at Silvassa. Therefore, on the facts and circumstances we direct the AO to accept the computation of profit of the eligible unit at Silvassa as made by assessee and allow deduction accordingly. Disallowance of the claim of deduction u/s 80-IA in respect of windmills installed at different locations - HELD THAT:- As relying on HERCULES HOISTS LTD. [2015 (5) TMI 825 - BOMBAY HIGH COURT] since the earlier year losses of the windmills were absorbed during those years and no losses were carried forward, for the initial year, the AO/Ld. CIT(A) erred in denying the claim. Therefore, we hold that the profits earned during the A.Y.2008-09 from the four (4) windmills would be entitled for deduction and the AO is directed to allow it as per law.
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