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2020 (2) TMI 830 - AT - Income TaxNotice u/s. 143(2) - Non issuing mandatory notice u/s 143(2) on the second revised return of income - HELD THAT:- AO has assumed valid jurisdiction in this case by issue of proper notice u/s. 143(2) of the Act within the time contemplated by law. The original return u/s. 139(1) of the Act has not been treated as non est and the revised return is only for the purpose of certain errors and mistakes in the original return. In such circumstances, there is no requirement of law to issue a notice u/s. 143(2) of the Act with reference to revised return. We derive support for the aforesaid conclusions from the decision of Vinod Kumar Khatri v. DCIT [2015 (11) TMI 1140 - DELHI HIGH COURT] . We are therefore of the view that there is no merit in grounds No.1 & 2 raised by the assessee and accordingly the said grounds are dismissed. Nature of receipt - subsidy grant from the State Govt. - revenue or capital receipt - HELD THAT:- The admitted factual position as it emanates from the order of AO and the CIT(Appeals) is that the assessee did not file a copy of the scheme under which subsidy was received by assessee. In the absence of details of the scheme, it is not possible to decide the question, whether the subsidy is capital or revenue in nature. Since the burden was on the assessee to show that the subsidy received was capital receipt not chargeable to tax and since the assessee failed to do so, we uphold the order of CIT(Appeals) on this issue and dismiss grounds 4 & 5. Rejection of the claim of assessee for grant of weighted deduction u/s. 35(2AB) - HELD THAT:- As we have already mentioned that the approval for grant of recognition to the prescribed authority was made by the assessee only on 12.5.2011 and not at any time during the relevant previous year. We are of the view that the order of CIT(Appeals) should be upheld on this basis. We may also mention a similar claim has been made by the assessee in AY 2011- 12 which is also being decided in this common order and in that year the assessee would be entitled to the benefit of deduction u/s. 35(2AB) as the approval was received on 12.5.2011 during the previous year relevant to AY 2011-12. We will discuss this issue while deciding the relevant ground of appeal for AY 2011-12. As far as AY 2010-11 is concerned, we are of the view that there is no merit in grounds No.6 to 10 and consequently they are dismissed. Deduction u/s. 80IA of the Act in respect of income derived from power generation out of 4 windmill units - allocation of proportionate expenses relating to windmills on the basis of turnover, particularly when the assessee had not maintained separate books of accounts in respect of windmills - HELD THAT:- Revenue has not disputed the fact that neither the operating & maintenance expenses, employee cost and other finance & administrative expenses nor the claim of depreciation, is attributable to the windmill unit and this finding of fact remains uncontroverted. The question of allocation of expenses therefore will not arise for consideration at all. We therefore find no merit in ground No.1. Higher depreciation on internal road laid for approach to windmills - HELD THAT:- These grounds are related to the profits of the windmill unit for which deduction u/s. 80IA was claimed by assessee. It is not in dispute before us that identical issue was raised by revenue in assessee’s own case for AYs 2008-09 & 2009-10 find that the road in question are not the proper roads constructed for the purpose of transportation or any other use, but these are operating condition for generation of power. Accordingly, when the roads in question are integral part of the installation work of the wind-mill, the same is eligible for depreciation applicable on the wind-mill. In view of the above facts and circumstances of the case, we do not find any reason to interfere with the impugned order of the CIT(A) Brought forward (notionally) the losses of the earlier years in respect of the eligible business to set it off against the income of the current year in terms of the provisions of Section 80IA(5) - HELD THAT:- It is not in dispute before us that in AY 2008-09 in assessee’s own case similar issue had come up for consideration and this Tribunal held that the brought forward losses of the earlier years need not be set off against the income of the current year on which deduction u/s. 80IA of the Act was to be allowed to the assessee. Addition made towards notional interest on interest free loan given to the Associated Enterprise - HELD THAT:- Special Bench of ITAT Kolkata in the case of Instrumentariam Corporation Ltd. v. ADIT (IT) [2016 (7) TMI 760 - ITAT KOLKATA] held that interest-free loans are subject to the provisions of section 92 of the Act and the ALP of such transaction have to be determined. We are of the view that the conclusion of the CIT(Appeals) that the provisions of section 92 of the Act were not attracted, cannot be sustained. We, however, remand the question of determination of ALP to the AO/TPO, who shall in accordance with the provisions of section 92 refer the question of determination of ALP interest to the TPO, only with regard to rate of interest to be adopted in adopted in determining the ALP of the interest payment. Claim for deduction u/s. 10B - HELD THAT:- Assessee’s declaration for opting out of provisions of section 10B for AYs 2008-09, 2009-10 & 2010-11 was not mentioned in Form 3CD filed before the AO. In our view, this is purely a technical objection. The Assessee has given declaration opting out of the provisions of Sec.10B of the Act for the relevant AYs and copies of those declarations are placed relating to appeal for AY 2011-12. Once the assessee opts out of provisions of section 10B for a particular year, then the losses/unabsorbed depreciation in that year will not be considered while allowing deduction u/s. 10B of the Act for the eligible period when deduction is claimed in a subsequent AY. In view of the above legal position, we find no merit in the ground No.8 raised by the revenue. Accordingly the same is dismissed.
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