TMI Blog2011 (4) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Assessee had three windmill units, one at Muppandal, one at Palladam and one at Sangneri. Assessee had claimed such deduction considering each of the windmill to be a separate undertaking. However, AO was of the opinion that the term used in Sec.80IA was any business and hence, the three windmills had to be considered in a combined manner and only combined net income would be eligible for calculating deduction under sec. 80IA of the Act. Though assessee pleaded that each windmill had to be considered as a separate undertaking, it was not accepted. However, the AO was of the opinion that windmill itself was not a separate undertaking and for taking this view he relied on the decision of a coordinate Bench of this Tribunal in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.A No.68-70 of 2010 dated 07-06-2010 was clearly in its favour. Per contra, ld. DR strongly supported the orders of the authorities below. 4. We have perused the orders and heard the rival contentions. Insofar as the issue whether deduction under sec. 80IA of the Act could be claimed for power produced and captively consumed, in our opinion, decision of Hon ble jurisdictional High Court in Thiagajar Mills Ltd s case (supra) clearly goes in favour of the assessee. Relevant paras 8 and 9 of the order of the Hon ble jurisdictional High Court is reproduced hereunder: 8. The contention that only whatever power generated from the sale to an outsider of the electricity board, and the profit or gain derived by such sale alone can be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng something from a specified source . In Sec.80IA(1) also no restriction has been imposed as regards the deriving of profit or gain in order to state that such profit or gain derived only through an outside source alone would make eligible for the benefits provided in the said Section. 9. Therefore, there is no difficulty in holding that captive consumption of the power generated by the assessee4 from its own poer plants would enable the respondent/assessee to derive profit and gains by working out the cost of such consumption of power inasmuch as the assessee is able to save to that extent which would certainly be covered by Sec.80IA(1). When such will be the outcome of own consumption of the power generated and gained by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. The assessee had claimed deduction on the four units and computed the deduction on the basis of the profits of the four units without setting off of loss of three units. However, the AO, relying on the decision of Hon ble Supreme Court in the case of IPCA Laboratory Ltd. v.DCIT (266 ITR 521)=(2004-TIOL-26-SC-IT), computed the deduction after setting off of the loss of three units from the profit of four units. On an appeal, the CIT(A0, relying on the findings of the Hon ble Apex Court in the cases of IPCA Laboratory Ltd, referred supra and also in CIT vs. B.Mohanachandran Nair reported in 285 ITR 226= (2005-TIOL-1181-SC-IT), upheld the action of the AO. 6.2 The issue was brought before the Hon ble Tribunal for further adjudication. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat section would be computed with reference to profits of the eligible unit, unaffected by loses suffered ion other units; (b) in case of loss suffered by the eligible unit, such loss would not be set off against profits of other units/other business/other incomes in the initial year of the assessment or subsequent years of eligible years of assessment; (c) where losses of the eligible unit remained to be adjusted against that very source, they are to be carried forward to subsequent year(s) and set off in the succeeding year(s) and on the balance profit alone the deduction admissible would be computed; (d) where there are no losses of the eligible unit carried forward (in view of set off against p4rofits of that very source ..... X X X X Extracts X X X X X X X X Extracts X X X X
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