TMI Blog2017 (2) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... only in order to reimburse wholly or partially costs actually incurred by the assesse in the manufacturing and selling of its products. Since the aforesaid decision of the honourable Apex Court was not available before the AO and the CIT appeal, we deem it appropriate to set aside the impugned order of CIT (appeal) and restore the matter back to the file of the assessing officer to consider assessee’s claim of deduction u/s 80 IA (4) in the light of the ratio laid down in the decision of the honourable Supreme Court referred to above. We may further observe, the assessing officer must also consider assessee’s claim on the quantum of subsidy actually received from the MSED - ITA no.204/Mum./2011, ITA no.6656/Mum./2011, ITA no.4977/Mum./ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement right of ₹ 14,95,000. The assessing officer after examining the details furnished and submissions made by assessee was of the view that Sales Tax incentive and subsidy by MEDA were for encouraging installation of wind energy generation unit in Maharashtra. Referring to the provisions of Section 80 IA and 80 IB the assessing officer observed that the deduction under the said provisions is allowable on the profits derived from the industrial undertaking and it is not sufficient if a commercial connection is established between the profits earned and the industrial undertaking. According to him profits derived from the business of an industrial undertaking would mean, immediate and effective source of income eligible for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restricted to ₹ 10 lakh and not 20 lakh. 6. The Ld. DR on the other hand relied upon the reasoning of the assessing officer of CIT(Appeals). 7. We have heard the parties and perused the materials on record. Undisputedly, the assesee has set up wind mills for generation of power. As per Section 80 IA (4) (iv) an undertaking set up in any part of India for generation or generation and distribution of power within the specified date will be eligible for deduction as provided in the said provision. In fact, the departmental authorities do not also dispute the eligibility of the assesse to claim deduction u/s 80 IA as far as profit derived from the wind mill. However, the dispute is restricted to the amount received by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment that immediate source of subsidy is the Government and not the business of assesse, the honourable Supreme Court observed, while considering applicability of the provisions contained u/s 80 IB and 80 IC it is to be seen whether the profits and gains are derived from the business. The honourable Supreme Court observed, so long as profits and gains emanate directly from the business itself, the fact that the immediate source of the subsidies is the Government would make no difference, as it cannot be disputed that the subsidies are only in order to reimburse wholly or partially costs actually incurred by the assesse in the manufacturing and selling of its products. It is pertinent to mention here; in the aforesaid judgment the honorable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which go to reimbursement of cost in the production of goods of a particular business would also have to be included under the head profits and gains of business or profession , and not under the head income from other sources . 8. The ratio laid down as aforesaid was followed by the honourable Apex Court in case of CIT Vs M/S Sri Balaji Alloys civil appeal no. 10061 of 2011. In our considered opinion the assessee s claim of deduction u/s 80 IA (4) qua the amounts received towards Sales Tax incentive and subsidy has to be considered in the light of the ratio laid down by the honourable Supreme Court in case of CIT Vs. M/S Meghalaya Steels Ltd. (supra). Since the aforesaid decision of the honourable Apex Court was not available befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 10 lakh. The Ld. AR also agreed to the aforesaid submission of the Ld. DR. Having heard the parties and perused the materials on record we have noticed that the quantum of dispute in the present appeal of the department is ₹ 22,01,897, thereby indicating that the tax effect of such disputed amount is less than the monetary limit of ₹ 10 lakh fixed by the CBDT circular no. 21/2015 dt. 10.12.2015 as far as it relates to filing ofappeal before the Tribunal. In view of the aforesaid, the appeal filed by the department being not maintainable is hereby dismissed. ITA no.4977/Mum./2011 Assessee s Appeal for A.Y. 2008 09 12. In this appeal the only issue raised by the assesse is in relation to disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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