TMI Blog2015 (5) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt. See CIT vs Shamlal Bansal [2011 (1) TMI 409 - PUNJAB AND HARYANA HIGH COURT] Generation loss compensation receipt is eligible for deduction under section 80IA of the Act Aas relyin on Magnum Power Generation Ltd. vs DCIT [2010 (5) TMI 605 - ITAT DELHI]. Entitlement to claim deduction under Section 80-IA - Held that:- The business undertaking of the assessee is wind mill power generation/hosiery goods, etc., and it has claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment year in question and for the subsequent years as well. Having exercised its option and its losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are earned from sources removed from the first degree. 4. The appellant submits that, as held by the Gauhati High Court in the case of CIT Vs Meghalaya Steels Ltd., (2013) 356 ITR 235 (Gau), when a subsidy is granted by the Government, is operational in nature, which helps in generation of profits for any industrial undertaking, such a profit is, indeed, covered by the provisions embodied in Section 80 IB/80IC of the Act, and that it is eligible for deduction under the said provisions, a principle which is equally applicable to deduction under section 80lA of the Act. 5. The Commissioner (Appeals) erred in not accepting the alternate claim that the receipts on sale of carbon credit being capital receipts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as per the provisions of the section-80IA(5) the eligible undertaking should be treated as only source of income for computing the quantum of deduction allowable u/s- 801A. 4. The learned CIT (Appeals)-II, Coimbatore, should have taken note of the fact that the Sec-80lA(5) begins with a non-obstante clause; and, therefore, the restriction therein, shall prevail in computing and allowing the deduction u/s-80IA. 4. The assessee-company manufactures and sells yarn and also generates wind energy. It had filed its return on 14.10.2010 disclosing total income of ₹ 37,50,800/-. The same was summarily processed. 5. The Assessing Officer took up scrutiny . The assessee had claimed section 80IA deduction of `99,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee s appeal I.T.A.No.746/Mds/2014. Its first ground is that the Assessing Officer and CIT(A) have wrongly treated its carbon credit receipts as revenue receipts. The assessee itself seems to have included this sum of ₹ 13,44,581/- as revenue receipts for claiming section 80IA deduction. The Assessing Officer referred to derived expression (supra). The assessee raised an alternative plea in lower appellate proceedings based on the case law of My Home Power Ltd vs DCIT (2013) 21 ITR (Trib) 186 (Hyd) upheld by the hon'ble A.P high court in Income Tax Appellate Tribunal Appeal No.60 of 2014 in order dated 19.2.2014 that these receipts are not revenue but capital in nature. The CIT(A) turns down this alternative plea as well. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital receipt in consequential computation. 9. The assessee s last ground pertains to generation loss compensation receipt of ₹ 10,00,569/- from its supplier for loss of wind power production. The Revenue s objections are based on the word derived (supra). The assessee s windmill supplier has paid the aforesaid amount in lieu of assured power generation failure at a rate fixed very well in advance. In identical circumstances, we find that in case law [2011] 16 taxmann.com 75(Delhi) Magnum Power Generation Ltd. vs DCIT holds that such a receipt arising from compensation is entitled for section 80IA deduction. The Revenue does not cite any judicial precedence in its favour. Thus, we adopt the same view and allow the assessee s cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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