TMI Blog2022 (3) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... Manufacturing Co. Ltd. [ 2017 (5) TMI 403 - SUPREME COURT ] which was followed by this Tribunal in the case of Caggemini Technology Services India Ltd. [ 2019 (3) TMI 1135 - ITAT PUNE] for A.Y. 2011-12. Thus, the arguments of ld. AR in respect of satisfaction by the AO are rejected. Thus, the order of CIT(A) is justified and the ground No. 1 raised by the assessee is dismissed. Disallowance of valid claim u/s. 80IA - AO denied the claim u/s. 80IA(4) of the Act considering each of the unit as a separate business on stand-alone basis which did not have any profit entitled for the said deduction in the year under consideration - HELD THAT:- As explained by the assessee that all the units have huge brought forward losses as on 01-04-2009 and if profit and loss of each windmill should not be considered on stand-alone basis otherwise windmill business has no positive income entitled to deduction u/s. 80IA of the Act. The AO rejected the said explanation and by considering each windmill as a separate unit and deduction for the year under consideration was denied. CIT(A) following earlier year confirmed the disallowance made by the AO. A similar issue came up before the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively. 2. Since, the issues raised in all the four appeals are similar basing on the same identical facts. Therefore, with the consent of both the parties, we proceed to hear all the four appeals together and to pass a consolidated order for the sake of convenience. 3. First, we shall take up appeal in ITA No.787/PUN/2017 for A.Y. 2011-12. 4. The ground No. 1 raised by the assessee challenging the action of CIT(A) in confirming the disallowance made Rule 8D r.w.s. 14A of the Act in the facts and circumstances of the case. 5. Heard both the parties and perused the material available on record. We note that the assessee is a company engaged in the business of generation of power from non-conventional resources including wind power. During the year under consideration, the assessee earned dividend income of ₹ 21,45,22,509/- and claimed the same as exempt u/s. 10(34) of the Act. The assessee on its own disallowed expenses of ₹ 1,18,53,570/- relating to earning of the above said exempt income. The AO asked the assessee to explain why a part of administrative expenses should not be held to be incurred for earning the said exempt income. The assessee explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any satisfaction by the AO is not maintainable. The ld. AR further referred to Para Nos. 37 and 38 of the decision of Hon‟ble Supreme Court and argued that the disallowance made by the AO as confirmed by the CIT(A) is bad under law. The AO discussed the issue at Para No. 3 of the assessment order, on perusal of which we note that the AO asked the assessee to explain why a part of administrative expenses should not be held to be incurred for earning this exempt income u/s. 14A r.w. Rule 8D. In response to which the assessee filed submission vide letter dated 06-03-2014. The AO extracted the relevant query relating to disallowance u/s. 14A in its order in Para No. 3.2. We note that it was explained the assessee has disallowed ₹ 1,18,53,570/- u/s. 14A which is considered to be reasonable. The disallowance is worked out on the basis of ratio of exempt income to total income. The Company contends that most of the investments have been held for the considerable period of time and the expenses have been worked out on sound and reasonable basis. Considering the same the AO recorded as the method of working out the disallowance on the basis of ratio of exempt income held to tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in the hands of the assessee for earlier year i.e. in A.Y. 2010-11 also. It was explained by the assessee that all the units have huge brought forward losses as on 01-04-2009 and if profit and loss of each windmill should not be considered on stand-alone basis otherwise windmill business has no positive income entitled to deduction u/s. 80IA of the Act. The AO rejected the said explanation and by considering each windmill as a separate unit and deduction for the year under consideration was denied. The CIT(A) following earlier year confirmed the disallowance made by the AO. A similar issue came up before the Tribunal in assessee‟s own case for A.Y. 2010-11 in ITA No. 1722/PUN/2016 vide its order dated 30-01-2019 remanded the issue to the file of AO to decide the issue in terms of the ratio laid down by the Hon‟ble High Court of Bombay in the case of CIT Vs. Hercules Hoists Ltd. The relevant portion of the Tribunal‟s order in assessee‟s own case for A.Y. 2010-11 is reproduced here-in-below for ready reference : 8. We have heard the rival contentions and perused the orders of the authorities below on this solitary issue of deduction u/s.80IA. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. Therefore, there is requirement of basic details on the said issue qua the figures of losses and profits over the years of the undertaking. Further, we find the law is more or less settled on this issue on the issue of manner of set off of notional losses of earlier assessment years which was already set off against the profits of the other undertakings. The judgmental law does not permit the set off of notional losses by the AO for eating away the eligible profits for the year under consideration. Apart from others, the jurisdictional High Court judgment in the case of CIT Vs. Hercules Hoists Ltd. (supra) is one such judgment which is required to be regarded and applied to the facts of the present case. In our considered opinion, this issue required fresh consideration at the level of CIT(A) for applying the binding judgments on the issue. Ld. Counsel for the assessee is also directed to supply necessary judgments on the specific issue of the manner of computation of deduction u/s.80IA(4) of the Act in the second year of the block of assessment years specified in the law. With these directions, we allow Ground No.3 for statistical purposes. 9. In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from other sources. The assessee did not give any bifurcation in respect of receipt with reference to ancillary services provided and expenditure required to be made with actual services furnished documentary evidences. The CIT(A) held the contention of the assessee that lease rental received is composite compensation as the license fees and security and garden maintenance services are not supported with documentary evidences. We note that in the absence of such evidences as required the CIT(A) proceeded to confirm the order of AO by holding no separate deduction is allowable from house property income. The ld. AR referred to Page No. 27 of the paper book and pointed at Clause (3) in Page No. 28 of the paper book and submitted that the licensee (assessee) shall pay to the licensor a license fee of ₹ 1,50,00,000/- per month for the use and occupation of the scheduled property and submitted that it is a composite license fee and for calculation of annual letting value the security charges and gardening charges ought to be deduction to arrive at the annual value. We note that the said leave and license agreement dated 30-03-2010 at Page No. 27 of the paper book entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 787/PUN/2017 is partly allowed for statistical purpose. ITA Nos. 1383/PUN/2017 (A.Y. 2012-13) 13. Both sides are unanimous in stating that the issue raised in the appeal and the facts in ITA No. 1383/PUN/2017 are identical to ITA No. 787/PUN/2017 except the variance in amount. Since, the facts in ITA No. 1383/PUN/2017 are similar to ITA No. 787/PUN/2017, the findings given by us while deciding the ground Nos. 1 to 3 of the appeal of assessee in ITA No. 787/PUN/2017 would mutatis mutandis apply to ITA No. 1383/PUN/2017, as well. The appeal of assessee is partly allowed for statistical purpose, accordingly. ITA Nos. 267/PUN/2018 (A.Y. 2013-14) 14. Both sides are unanimous in stating that the issue raised in the appeal and the facts in ITA No.267/PUN/2018 are identical to ITA No. 787/PUN/2017 except the variance in amount. Since, the facts in ITA No. 267/PUN/2018 are similar to ITA No. 787/PUN/2017, the findings given by us while deciding the ground Nos. 1 and 3 of the appeal of assessee in ITA No. 787/PUN/2017 would mutatis mutandis apply to ITA No. 267/PUN/2018, as well. The appeal of assessee is dismissed, accordingly. ITA Nos. 268/PUN/2018 (A.Y. 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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