2009 (9) TMI 948 - AT - Income Tax

Summary

Issues involved: Denial of deduction u/s 80-IA and disallowance of provision for leave encashment.

Denial of deduction u/s 80-IA:
The appellant, engaged in aluminum extrusions and wind energy generation, claimed 100% deduction u/s 80IA for profit earned by one unit, but AO treated all power generation units as a single 'eligible business' resulting in a negative profit. CIT(A) upheld AO's decision citing Supreme Court precedents emphasizing sec.80AB overriding effect. Appellant contended each power generation unit should be considered independently for deduction u/s 80IA. ITAT referred to a similar case where deduction was allowed on a unit-wise basis, not offsetting losses from other units. Thus, ITAT directed AO to allow deduction u/s 80IA on an undertaking-wise basis.

Disallowance of provision for leave encashment:
AO did not address this issue, and ITAT advised the appellant to approach the assessing authority for redressal. ITAT directed AO to review the grievance if within the stipulated time frame, dismissing the ground as premature.

In conclusion, the appellant's appeal was partly allowed by ITAT on September 4, 2009.