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2016 (3) TMI 589 - ITAT PUNE

2016 (3) TMI 589 - ITAT PUNE - TMI - Denial of deduction u/s.80IA on the profits from the windmills - claim for initial assessment year - that:- Recently, the Coordinate Bench of the Tribunal in the case of D.J. Malpani [2015 (12) TMI 896 - ITAT PUNE] has reiterated the position with regard to the ‘initial assessment year’. Accordingly, we are of the considered view that the assessee is eligible to claim deduction u/s.80IA on the profits from the windmill for the impugned assessment year.
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s High Court ) - Decided in favour of the assessee. - ITA No.1462/PN/2014 - Dated:- 10-2-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee by : Shri Nikhil Pathak For The Revenue : Shri Hitendra Ninawe ORDER PER VIKAS AWASTHY, JM : The appeal of the assessee is directed against the order of CIT(A)-I, Pune dated 28-02-2014 for the Assessment Year 2006-07. 2. The solitary issue raised in the appeal filed by the assessee is against denial of deduction u/s.80IA on the profits fr .....

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ting initial assessment year . Aggrieved by the assessment order dated 24-12-2008 the assessee preferred an appeal before the CIT(A). The CIT(A) upholding the finding of the AO observed, that the initial assessment year in which the generation of power from windmills began is A.Y. 2002-03 and not the first year of claiming deduction, i.e. A.Y. 2004-05. Against the order of CIT(A) the assessee is in second appeal before the Tribunal. 4. Shri Nikhil Pathak appearing on behalf of the assessee submi .....

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ed Representative submitted that the issue regarding eligibility of assessee to claim deduction u/s.80IA, vis-àvis initial assessment year has been decided in favour of the assessee by the Coordinate Bench of the Tribunal in assessee s own case for A.Y. 2004-05 in ITA No.92/PN/2008 reported as 136 TTJ 236. The Pune Bench of the Tribunal has been consistently holding that the initial assessment year is the first year of any 10 consecutive assessment years out of the 15 years in which deduc .....

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ave claimed deduction. The Ld. Departmental Representative in support of the findings of CIT(A) placed reliance on the decision rendered in the case of Khinvasara Investment Pvt. Ltd. Vs. JCIT reported as 110 ITD 198 (Pune). The Ld. Departmental Representative prayed for dismissing the appeal of the assessee. 7. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. We have also considered the decisions on which both the .....

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laiming deduction u/s.80IA in the A.Y.2004-05. The dispute travelled upto the Tribunal. The Tribunal decided the issue in favour of the assessee. The Tribunal held that initial assessment year for the purpose of claiming deduction u/s.80IA would be the first year in which the assessee has claimed deduction. The relevant extract of the findings of the Tribunal are reproduced herein below : 13. We have heard both the parties and perused the factual matrix of the case and orders of the Revenue and .....

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rprise referred to in sub-s. (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to hundred per cent of profits and gains derived from such business for the first five assessment years commencing at any time during the periods as specified in sub-s. (2) and thereafter, twenty-fi .....

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d begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or generates power or commences transmission or distribution of power : Provided that where the assessee begins operating and maintaining any infrastructure facility referred to in cl. (b) of Explanation to cl. (i) of subs. (4), the provisions of this sub-section shall have effect as if for the words fifteen years , the words twenty years had been substituted.............. .....

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, we find no fault with the assessee in selecting the asst. yr. 2004-05 as the initial assessment year . In this regard i.e., on the issue of assessee s option to select the initial assessment year , we have perused the citations relied upon by the assessee s counsel. The conclusion by the Tribunal Mumbai Bench decision in ITA No. 4620/Mum/2007 (asst. yr. 2004-05) in the case of Dy. CIT vs. Ushdev International Ltd., is straight on this issue of initial assessment year and the option to the asse .....

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the years there were profits till asst. yr. 2004-05. It is not clear whether the assessee has claimed any deduction in earlier years under s. 80-IA. This being the 8th year of starting the project, assessee would be left with only another 7 years of claim out of the 10 years available to the assessee. Considering this we are of the opinion that the initial assessment year is to be determined on the basis of the year the assessee choose to claim the deduction for the first time........" 15. .....

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n holding that the initial assessment year for the purposes of s. 80-IA(2) r/w s. 80-IA(5) was the year in which the assessee started generating the electricity. Therefore, the order of the CIT(A) has to be reversed on this issue. It is clear that the initial assessment year for the above purposes was the first year in which the assessee claimed the deduction under s. 80-IA(1) after exercising his option as per the provisions of s. 80-IA(2) of the Act. Consequently, the assessee is entitled to c .....

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