TMI Blog2017 (10) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year - HELD THAT:- he initial assessment year for the assessee for claiming deduction u/s.80IA (4) r.w.s (5) is the issue adjudicated by the Tribunal in favour of the assessee. While granting relief in para 65 of the Tribunal order, the Tribunal relied on the decision of Coordinate Bench of the Tribunal in the case of Poonawala Estate Stud Agro Farm Pvt. Ltd. [ 2010 (9) TMI 1080 - ITAT PUNE] and also Velayudhaswamy Spinning Mills Pvt. Ltd [ 2010 (3) TMI 860 - MADRAS HIGH COURT] . As such, Ld. DR could not bring any contrary decision on the issue under consideration. Thus, the initial assessment year constitutes the assessment year in which the deduction u/s.80IA of the Act is first claimed by the assessee after exercising his option as per the provisions of Section 80IA(2) of the Act. Therefore, we are of the opinion that the relief granted by the CIT(A) on this issue does not require any interference. Accordingly, ground No.3 raised by the Revenue is dismissed. Rate of depreciation applicable to the electricity fittings of the windmill - HELD THAT:- This is a case where the Assessing Officer allowed depreciation at the rate of 10% on electricity fittings used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- 1) The learned CIT(A) erred in allowing the claim of the assessee for a deduction of ₹ 11,09,92,227/- for A.Y. 2011-12 and ₹ 13,55,53,877 for A.Y.2012-13 u/s. 80IA (6) of the Income tax Act. 2) a) The Ld. CIT(A) erred in treating the windmills set up at different placed in different year as separate undertaking and that such windmill do not constitute as single business undertaking for the purpose of deduction u/s.80IA. 2. b) The Ld. CIT(A) erred in holding that deduction u/s. 80IA should be allowed by treating each windmill as independent undertaking instead of allowing the deduction on consolidated basis as held by the AO. 3) The Ld. CIT(A) erred in deciding that selection of initial assessment year u/s. 80IA is at the option of the assessee and not the year in which year business activity of eligible undertaking/units starts? 4) The Ld. CIT(A) erred in deciding that assessee is eligible to claim depreciation @ 80% on electrical fittings used for windmill, although depreciation on electrical fittings is allowable 15% only as per IT Rules 1962. 5) The appellant prays that the order of Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the Tribunal in the case of J. Sons Foundry Pvt. Ltd. Vs. DCIT and vice versa vide consolidated order dated 30.01.2013 for A.Y.2007-08 and 2008-09 he submitted that the Tribunal in the said decision held that each windmill is to be considerate as a separate undertaking. 56. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). 57. After hearing both the sides, we find the Coordinate Bench of the Tribunal in the case of J. Sons Foundry Pvt. Ltd. (supra) while dismissing the grounds raised by the Revenue on this issue has observed as under : 15. Against the decision of the Ld. CIT(A), the Revenue is in appeal before us. We have heard the rival submissions of the parties and perused the record. Admittedly, the assessee is power general through the wind mills at 3 different locations i.e. in Tamilnadu, Panchgani and Satara. The wind mills are commissioned and erected in different assessment years as noted by the authorities below. Assessee is maintaining separate books of accounts in respect of 3 wind mills and working out the profit or losses. Though the first wind mill was erected and commissioned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taken by the revenue are dismissed. 58. Respectfully following the decision of the Coordinate Bench of the Tribunal cited (supra.) and in absence of any contrary material brought to our notice we hold that each phase of windmill has to be considered as separate undertaking eligible for deduction u/s.80IA and therefore deduction u/s.80IA(4) should have been computed independently for each phase and not on consolidated basis. The ground raised by the assessee on this issue is accordingly allowed. 7. Considering the above facts, it is evident that the Tribunal relied on the decision of Coordinate Bench of the Tribunal in the case of J-Sons Foundry Pvt. Ltd Vs. DCIT (supra.) for A.Yrs. 2007-08 and 2008-09 order dated 30.01.2013 while granting relief to the assessee in appeal for the A.Yrs. 2007-08 to 2010-11. It is now a settled legal proposition that every unit constitute a separate undertaking engaged in the eligible business and losses from one unit cannot be set off against the profit of another unit engaged in the same business for the purpose of computing the deduction u/s 80IA. Therefore, we are of the opinion that order of the CIT(A) on this issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills Pvt. Ltd reported in 340 ITR 477. As such, Ld. DR could not bring any contrary decision on the issue under consideration. Thus, the initial assessment year constitutes the assessment year in which the deduction u/s.80IA of the Act is first claimed by the assessee after exercising his option as per the provisions of Section 80IA(2) of the Act. Therefore, we are of the opinion that the relief granted by the CIT(A) on this issue does not require any interference. Accordingly, ground No.3 raised by the Revenue is dismissed. 11. Ground No. 4 of the Revenue s appeal relates to the rate of depreciation applicable to the electricity fittings of the windmill. At the outset, Ld. Counsel for the assessee brought out attention to the relevant paragraph in the order of Tribunal in the assessee s own case (supra.) and submitted that the similar issue came up for adjudication before Tribunal in those assessment years. Hon'ble Tribunal decided the issue as per discussion given in para No. 76 to 80 of the order of Tribunal, the copy of which is placed at page No. 19 and 20 of the paper book. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct matter of litigation for the A.Yrs. 2006-07 to 201011. The matter reached up to the Tribunal and the same was decided in favour of the assessee by the Tribunal in ITA Nos. 1150 1184/PUN/2013 dated 30.10.2015. The contents of para Nos. 29 to 35, available at page No. 7 and 8 are relevant in this regard. 16. After hearing both the parties on this issue, we reproduce the said paragraph for the sake of completeness of the order and the same reads as under : 33. After hearing both the sides, we find the claim of the assessee regarding additional depreciation was allowed by the AO in the assessment made u/s. 143(3) on 29.12.2008 which is prior to the date of search on 06.10.2009. The disallowance of additional depreciation by the AO is not based on any incriminating material found during the course of search or post search enquiry. Therefore, in view of the decision of Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (supra) the Ld. CIT(A) was justified in deleting the disallowance made by the AO. We accordingly, uphold the order of the CIT(A) and the grounds raised by the Revenue are dismissed. 34. Even on merit also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh Electricity Board (Supra.) and the decision of Delhi Bench of the Tribunal in the case of NTPC Ltd. reported in 2002 (4)(TM) 694(SC), it was held that generation of electricity is a manufacturing activity and the assessee is eligible for additional depreciation u/s.32(1) (iia) of the Act. The assessee also relied on the Third Member decision in the case of M/s. Giriraj Enterprises cited as ITA Nos. 1384 1385/PUN/2015 dated 23.02.2017 which is relevant for the proposition that generation of electricity by windmill amounts to production of article or a thing and consequently holding that the assessee is entitled for additional depreciation as per section 32(1) (iia) of the Act. Relevant para Nos. 6 to 8 from the order of Third Member Bench are extracted as under: 6. The question before the Hon'ble Court was- whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the generation of electricity by windmill amounts to production of article or a thing and consequently holding that the assessee is entitled for additional depreciation as per section 32(1) (iia) of the Act? 7. The learned Departmental Representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gher rate of depreciation in respect of cost of electrical fencing and temporary approach road. 67. The Ld. Counsel for the assessee at the outset submitted that the issue stands decided against the assessee by the decision of the Pune Bench of the Tribunal in the case of Poonawala Finvest and Agro Pvt. Ltd. (Supra.). In view of the above, grounds of appeal No. 9 and 9.1 by the assessee are dismissed. 22. It is the finding of the Tribunal in assessee s own case(supra.) that 10% is the depreciation rate applicable to the electrical fittings. Considering the above settled nature of the issue at the level of the Tribunal as informed by the Ld. Counsel for the assessee, we are of the view that the ground No. 4 raised by the assessee is to be dismissed. 23. Ground No. 5 is general in nature and therefore, the same is dismissed. 24. In the result, appeal of the assessee is partly allowed. ITA No. 1468/PUN/2015 (By Revenue A.Y. 2012-13) : Now we are taking cross appeals for assessment year 2012-13 for adjudication. 25. Both the Counsels submitted the issues raised in this appeal i.e (1) whether wind mill ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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