2013 (11) TMI 1675 - AT - Income Tax

Deduction 80IA - Held that - valid reason to interfere with the findings and decision of the Commissioner of Income Tax (Appeals) as the Commissioner of Income Tax (Appeals) followed the decision of the jurisdictional High Court in the case of Velayudha Spinning Mills Ltd. (2010 (3) TMI 860 - Madras High Court ) while allowing the claim of the assessee under section 80IA of the Act on windmill. Therefore we sustain the orders of the Commissioner of Income Tax (Appeals) in both the cases.

Summary

Issues:
- Delay in filing appeals by the Revenue
- Claim of deduction u/s. 80IA on windmills
- Consideration of set off of brought forward losses
- Application of relevant case law in decision-making

Delay in filing appeals by the Revenue:
The Revenue filed two appeals against the orders of the Commissioner of Income Tax (Appeals) with a delay of nine days. Separate affidavits were submitted explaining the reasons for the delay. The Appellate Tribunal found a reasonable cause for the delay and decided to condone it in the interest of justice. Consequently, the appeals were admitted for disposal.

Claim of deduction u/s. 80IA on windmills:
The common grounds raised by the Revenue in both appeals revolved around the claim of deduction u/s. 80IA on windmills. The Revenue contended that the Commissioner of Income Tax (Appeals) erred in allowing the deduction without considering the set off of brought forward losses of earlier years. The Revenue argued that, as per section 80IA(5), profits and gains should be calculated considering the brought forward losses, even if they have been set off against profits. The Revenue also challenged the decision of the Commissioner of Income Tax (Appeals) based on a case law from the Madras High Court.

Consideration of set off of brought forward losses:
During the hearing, the counsel for the assessee argued that the issue was covered by a decision of the jurisdictional High Court. The Departmental Representative acknowledged that the issue was indeed covered by the High Court decision. After hearing both sides and reviewing the lower authorities' orders and relevant case law, the Appellate Tribunal found no valid reason to interfere with the Commissioner of Income Tax (Appeals)'s decision. The Commissioner had followed the jurisdictional High Court's decision in allowing the deduction under section 80IA, leading to the rejection of the Revenue's grounds.

Application of relevant case law in decision-making:
The Commissioner of Income Tax (Appeals) had allowed the appeal of the assessee based on the decision of the jurisdictional High Court in a specific case. The Appellate Tribunal upheld this decision, stating that there was no reason to interfere with the Commissioner's findings. Consequently, both appeals by the Revenue were dismissed, and the orders of the Commissioner of Income Tax (Appeals) were sustained based on the application of the relevant case law.

This comprehensive analysis of the judgment highlights the issues of delay in filing appeals, the claim of deduction u/s. 80IA on windmills, the consideration of set off of brought forward losses, and the application of relevant case law in decision-making, providing a detailed overview of the legal proceedings and outcomes.