TMI Blog2022 (8) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... d losses and unabsorbed depreciation of earlier year is not NIL. CIT(A) also held that after adjusting the losses of windmill units 7 to 9 against the profit of hotel, the profit was Rs. 6.292 crores. The profit from windmill No. 1 to 6 was Rs. 2.369 crore and the resultant income is worked out at Rs. 2.708 crore. Against which the assessee has claimed deduction to the extent of Rs. 1.068 crore, thus the claim of assessee is in accordance with ratio laid down in the case of Sintex Industries Ltd. [ 2013 (7) TMI 979 - GUJARAT HIGH COURT ] CIT(A) after referring the decision in Eastern Medikit Ltd., Jindal Aluminum, Meera Cotton and Synthetics Mills P Ltd. and Dewan Kraft Systems [ 2007 (2) TMI 149 - DELHI HIGH COURT ] concluded that in the said cases, it has been held that the primary step for considering the grant of deduction under Chapter VIA is to be determine the gross total income which in turn is computed by aggregating the total income from all sources in the year after aggregating the income. There is no question of adjusting loss of any other business against the business income of eligible undertaking for deduction under Chapter VIA and the deduction under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remained for allowing the deduction u/s 80IA. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in allowing 80IA claim of the assessee without appreciating the fact that assessee company had installed 9 windmills, out of these 9 windmills in the six windmills assessee company had earned profit of Rs. 2,36,96,214/- which was claimed u/s 80IA of the Act whereas in the remaining three windmills assessee company had incurred loss to the turn of Rs. 5,95,39,450/- which was set off against the income of Hotel Business. Thus, overall effect in the eligible was loss of Rs. 3,58,43,236/-. Since the assessee company had not earned any income from the eligible business. Hence, benefit of deduction u/s 80IA should not be given to the assessee. 4. On the facts and circumstances of the case, the ld. CIT(A) ought to have upheld the order of the assessing officer. 5. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of assessing officer may be restored to the above extent. 2. The assessee in its CO has raised solitary grounds of appeal, which reads as under: 1. On the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was disposed of vide speaking order dated 31/08/2015. After disposing objection, the assessing officer proceeded for assessment. During the reassessment proceedings, the Assessing Officer noted that the assessee has incurred losses from the eligible business of generation of power. The assessee claimed deduction under Section 80IA(iv) of Rs. 1,06,84,759/-. The Assessing Officer was of the view that deduction under Section 80IA is allowable only when income is earned (profit is shown) from eligible business. The assessee has nine wind mills, out of which, in six wind mills, the assessee has shown profit of Rs. 2.369 crore, however, in the remaining three wind mills, the assessee company had incurred losses of Rs. 5.953 crores. Thus, overall effect in the eligible business loss of Rs. 3.58 crore as the assessee has not earned any income from eligible business, therefore, not eligible for deduction under Section 80IA of the Act. The Assessing Officer was of the view that the deduction claimed by assessee of Rs. 1,06,84,579/- is not allowable and accordingly issued a show cause notice to the assessee. The assessee filed his reply on 10/10/2016. The contents of reply by assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate and independent books of account was maintained by the assessee for each and every wind mill, hence, the profit/loss of each wind mill cannot be ascertained from the incomplete record, therefore, deduction under Section 80IA of Rs. 1.068 crore was disallowed. 6. On appeal before the ld. CIT(A), the assessee challenged the validity of disallowance of deduction under Section 80IA only. The assessee filed detailed written submission as recorded in para 8 of order of ld. CIT(A). In the submission, the assessee furnished following details about the installation of various wing mills undertaking. Before assessing officer, the details of the year of installation of various unit, location and the profit or the loss earned by individual unit was furnished by the assessee, the details are scanned below; 7. The assessee further stated that from the aforesaid details, the gross total income of assessee is positive. Profit from wind mill undertaking are included in the gross total income. The conclusion of Assessing Officer in clubbing all the undertaking is ill founded for the reasons that Section 80IA stipulated that every undertaking is different undertaking and every undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Chapter VIA of the Act would be available only if the computation of gross total income as per the provisions of the Act after setting of different carries forward losses and unabsorbed depreciation of earlier year is not NIL. The ld. CIT(A) also noted that after adjusting the losses of Rs. 5.953 crores of windmill units 7 to 9 against the profit of hotel, profit was Rs. 6.292 crores and profit from windmill NO. 1 to 6 was Rs. 2.369 crore and the resultant income is worked out at Rs. 2.708 crore. Against which the assessee has claimed deduction to the extent of Rs. 1.068 crore, thus the claim of assessee is in accordance with ratio laid down in the case of Sintex Industries Ltd. Vs. ACIT 37 taxmann.com 217 (Guj). The ld. CIT(A) after referring the decision in Eastern Medikit Ltd., Jindal Aluminum, Meera Cotton and Synthetics Mills P Ltd. (supra) and Dewan Kraft Systems 297 ITR 305 (Del) concluded that in the said case, it has been held that the primary step for considering the grant of deduction under Chapter VIA is to be determine the gross total income which in turn is computed by aggregating the total income from all sources in the year after aggregating the income. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Rajasthan and Maharashtra. All undertakings were installed on different points of time, hence loss inter se on certain undertaking were adjusted against the profit of certain undertaking and thus, relief under Section 80IA was restricted to the extent of Rs. 1.068 crore. Before the ld. CIT(A), the assessee furnished detailed written submissions, copy of which has been placed before the Tribunal. The assessee before the ld. CIT(A) submitted that the gross total business income of assessee is positive. The profit from all windmills undertaking are included in the gross total income. The assessee has installed various windmill undertakings on different locations at different point of time. The claim under Section 80IA is claimed from different period. The assessee is eligible to claim deduction in respect of every undertaking for a consecutive period of 10 years out of the Act 15 years. Section 80IA itself is a clear as to claim the relief under the said Section for each undertaking independently and that too profit of every undertaking will have different years of reliefs. The conclusion drawn by the Assessing Officer in clubbing all the undertakings as one business is not in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an undisputed fact that separate accounts are maintained for each windmill undertaking. Thus, the deduction is to be computed with respect to each unit independently taking into consideration the profit of each unit without clubbing loss of others. The ld. CIT(A) by referring the decision of Hon'ble Supreme Court in the case of Synco Industries Ltd. Vs ITO (supra) held that deduction under Chapter VIA of the Act would be available, only if the computation of gross total income as per the provisions of the Act after setting of different carries forward losses and unabsorbed depreciation of earlier year is not NIL. The ld. CIT(A) also held that after adjusting the losses of Rs. 5.953 crores of windmill units 7 to 9 against the profit of hotel, the profit was Rs. 6.292 crores. The profit from windmill No. 1 to 6 was Rs. 2.369 crore and the resultant income is worked out at Rs. 2.708 crore. Against which the assessee has claimed deduction to the extent of Rs. 1.068 crore, thus the claim of assessee is in accordance with ratio laid down in the case of Sintex Industries Ltd. Vs. ACIT 37 (supra). 13. We find that the ld. CIT(A) after referring the decision in Eastern Medikit Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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