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2020 (7) TMI 436 - AT - Income TaxSlump sale of windmills - capital gains as a slump sale u/s 50B (2) - windmill as separate undertaking - assessee is engaged in the business of aqua culture, export of frozen shrimp, sale of hatchery seed and wind power generation - Eligibility to deduction u/s 80IA - HELD THAT:- In the instant case, there is no dispute that the assessee has sold the wind mills and claimed it as a separate undertaking. Separate undertaking is one which can be separated from the business unit and both the business units of the assessee should be run separately, independent of each and they should not be dependent on each other. The definition of undertaking is given in 2(42C) and section 2(19) wherein undertaking is defined as any part of an undertaking or unit or division of an undertaking or a business activity taken as a whole, but does not include individual assets or liabilities or any combination thereof not constituting the business activity. From the definition of Income Tax Act, the windmills satisfy all the conditions for treating it as a separate undertaking as discussed by the Ld.CIT(A) in para No.6.3 of the order. Since the assessee has sold the windmills along with assets and all the liabilities, it also falls in the definition of slump sale u/s 2(42C) of the Act. Though the assessee has not separately maintained the books of accounts, separate ledger accounts are maintained and claiming deduction u/s 80IA separately for the income generated from the individual units each year. As per the Profit & Loss account, we observe that the assessee is computing profits separately, from wind mills and in a position to ascertain the income and expenditure separately for the windmills as well as for the assessee’s business. As argued assessee, the Hon’ble Andhra Pradesh High Curt in the case of CIT Vs. Abhirami Cotton Mills (P) Ltd. [1995 (7) TMI 14 - ANDHRA PRADESH HIGH COURT] held that non maintenance of separate books of accounts does not make the assessee disentitled for deduction u/s 80J(4). In the case of Ajanta (P) Ltd. [2016 (12) TMI 1557 - GUJARAT HIGH COURT] held that the deduction u/s 80IA cannot be denied solely on the ground that separate Profit & Loss account and balance sheet are not produced. As decided in M/S. SARGAM RETAILS PVT. LTD. [2017 (12) TMI 1257 - ITAT PUNE] windmill is a separate undertaking. We hold that wind mills constitute separate undertaking and the Ld.CIT(A) has rightly directed the AO to compute the capital gains as a slump sale u/s 50B (2) and no interference is called for. Accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue.
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