TMI Blog2019 (4) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by other eligible units. Hence, we are inclined to uphold the findings of CIT(A) and dismiss appeal filed by the revenue. - ITA No.6967/Mum/2017, ITA No.6968/Mum/2017, ITA No.6969/Mum/2017 - - - Dated:- 27-3-2019 - Shri G Manjunatha (Accountant Member) And Shri Ravish Sood (Judicial Member) For the Appellant : Shri D.G. Pansari For the Respondent : Shri Vimal Punmiya ORDER PER G MANJUNATHA, AM : These three appeals filed by the revenue are directed against common order of the CIT(A)-33, Mumbai dated 13-09-2017 for the assessment years, 2012-13, 2013-14 2014-15. Since facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposed of by this consolidated order. 2. The revenue has raised more or less common grounds of appeal for all assessment years. Therefore, for the sake of brevity, grounds of appeal taken for AY 2012-13 in ITA No.6967/Mum/2017 are reproduced hereunder:- 1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in holding that the assessee is eligible for deduction u/s.80IA of the Income-tax Act, 1961 to the tune of ₹ 1,42,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s 80IA shall be allowed to each unit without considering profit or loss of other eligible units. The Ld.CIT(A) further observed that if both sub sections of section 80IA are read together, it is very clear that once other conditions of section 80IA are fulfilled, the profit is to be computed undertaking-wise and not for business as a whole. Since the AO has not doubted the eligibility of deduction with respect to different windmills, he found that for the purpose of determining the quantum of deduction u/s 80IA for each undertaking, the computation has to be made as if such eligible business were the only source of income to the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including the assessnment year for which the determination has to be made. The relevant observations of the Ld.CIT(A) are as under:- 19. I have carefully considered the above submissions of the appellant and the impugned assessment order on this issue, My observations are as under- 19.1 During the appellate proceedings, the appellate has submitted the details regarding set up, location and the date of commencement of each Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80lA are read together, it is clear that, once other conditions of section 80IA are fulfilled, the profits are to be computed Undertaking-wise and not for business as a whole. Since the AO has not doubted the eligibility of deduction u/s 80IA with respect to different Wind Mills, it is found that for the purpose of determining the quantum of deduction u/s 80IA for each undertaking, the computation is to be made as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment and including the assessment year for which the determination is to be made. In the instant case, for WTG 1, WTG 2 and WTG 3, the initial assessment years for the purpose of deduction u/s 80IA are A.Y.s 2011-12. 2011-12 and A.Y. 2012-13 respectively. There are positive profit for all the three Wind Mills in these years. For WTG 4 and WTG 5, the appellant has chosen initial assessment years being A.Y. 2013-14 and A.Y. 2015-16 respectively, since the provisions of IT. Act give an opportunity to the assessee to select any ten consecutive years out of 15 years for availing the benefits of deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of other eligible units. The Ld.CIT(A), After considering relevant provisions of the Act, has rightly directed the AO to allow the benefit of deduction unit-wise without setting off of loss / profit of other eligible units. Therefore, there is no reason to interfere with the order of the Ld.CIT(A). 8. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. There is no dispute with regard to the fact that the assessee is eligible for deduction u/s 80IA in respect of five windmills. The only dispute is with regard to whether each windmill constitute a separate undertaking and the profit or loss of that undertaking alone will be considered for the purpose of deduction u/s 80IA or the sum of profit or loss of all five undertakings together is eligible for deduction u/s 80IA. The co-ordinate bench of ITAT, Mumbai Bench C in the case of Punit Construction Co vs JCIT (supra) has considered an identical issue in light of number of windmills and after considering relevant provisions of the Act, including sub section (5) of section 80IA, held that deduction has to be given unit-wise without considering profit or lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome separately. In this case admittedly, the assessee does not have any other head of income except income from Business or Profession. The assessee have only two segment of business income i.e. construction business and power generation business. Admittedly, construction business is not eligible business for claiming deduction under section 80IA, therefore, there is controversy about consolidation of profit from construction business activity. The assessee is having power generation segment through windmills. The assessee has set up five windmills. All the five units are part of power generation segment. Now the question is whether deduction provided under section 80IA shall be given on profits and gains derived from power segment business as the only eligible business or profits and gains derived from each windmills as an eligible business without considering profit or loss of other windmills. There is no dispute with regard to deduction to be given under chapter VIA against gross total income computed from all source of income. Even various decisions of the Hon'ble Supreme Court, including in the case of CIT vs. Liberty India I T A No . 63 37 6 9 80 / M u m/ 2 01 4 (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ample. The assessee is in to the business of manufacturing products from different units located at different places. Meantime, the Govt. has announced incentives for setting up units in some places and within such period. The assessee has set up one eligible unit and starts claiming deduction under that provision. Next year, the assessee has set up one more eligible unit at different place and starts claiming deduction from that year and so on. Now both units are eligible units. The period of deduction specified under the act is 10 years for eligible units. Unit one is claiming deduction from initial assessment year and it may end up in some period. Unit two is claiming deduction from next year and it may end up in different year. If one takes initial assessment year from which unit one claims deduction for ten years, the assessee may loose benefit of deduction for one year for unit two, because it has commenced deduction from next year. If you take initial year of claim from the date on which unit two starts claiming deduction, then the assessee may get the benefit for more than 10 years for unit one, if you consider both units as one eligible business and profit or loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done by him in total disregard of the provisions of subsection (7) of section 80-IA. [Para 14J Thus, the Kalamh unit, being the only unit of the assessee eligible for deduction under section 80-IA, was to be treated as an independent unit and the same was to be treated as the only source of income for the assessee for the purpose of computing deduction under section 80- IA. The deduction claimed by the assessee under section 80-IA, thus, was in accordance with said provisions and as such there was no 10. In this view of the matter and being consistent with the view taken by the co-ordinate bench, which is further supported by the decision of Hon ble Delhi High Court in the case ofCIT vs Dewan Kraft Systems Pvt Ltd (supra), we are of the considered view that the Ld.CIT(A) was right in allowing the benefit of deduction u/s 80IA in respect of each unit without setting off of loss incurred by other eligible units. Hence, we are inclined to uphold the findings of Ld.CIT(A) and dismiss appeal filed by the revenue. ITAs No.6968 6969/Mum/2017 11. The facts and issue involved in these two appeals are identical to the facts and issue we have already considered in ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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