9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 804 - AT - Income TaxClaim of deduction u/s 80IA - Manufacture of Glaze Frit and generation of wind power energy Held that - Losses incurred by the assessee were already set off and adjusted against the profits of the earlier years - During the AY 2010-11, the assessee exercised the option u/s 80(IA) During the relevant period, there were no unabsorbed depreciation or loss of the eligible undertakings and it were already absorbed in the earlier years - There is a positive profit during the year - there is no question of setting off notionally carried forward unabsorbed depreciation or loss against the profits of the unit and the assessee is entitled to claim deduction u/s 80IA on the current assessment year on the current year profit the AO is not justified in disallowing the claim of deduction u/s 80IA in respect of company s Jaisalmer wind power unit and the disallowance of claim u/s 80IA is deleted. Higher depreciation in respect of wind mill installed at Coimbatore and Sadiya Held that - The contention of the is accepted and the AO is not justified in disallowing the total depreciation disallowed which is liable to be deleted as it has already been held in assessee s own case for the earlier assessment year - depreciation on foundation work and transformer plinth and depreciation on installation and electrical lines etc. is held to be allowable at which rate depreciation is allowable on wind mill Decided against Revenue.
Issues Involved:
1. Claim of deduction under Section 80IA of the Income-tax Act, 1961. 2. Disallowance of higher depreciation for windmills installed at Coimbatore and Sadiya. Issue-wise Detailed Analysis: 1. Claim of Deduction under Section 80IA: The first ground pertains to the claim of deduction under Section 80IA of the Income-tax Act, 1961, amounting to Rs. 52,86,966. The assessee-company, engaged in manufacturing Glaze Frit and generating wind-power-energy, filed its return for the Assessment Year (A.Y.) 2010-11, claiming the deduction for a windmill installed at Jaisalmer. The Assessing Officer (A.O.) denied this deduction, but the Commissioner of Income Tax (Appeals) [CIT(A)] allowed it. The CIT(A) noted that the assessee had installed the windmill during the Financial Year (F.Y.) 2004-05 and opted for A.Y. 2010-11 as the initial year for claiming the deduction under Section 80IA. The relevant provision allows a deduction of 100% of the profits and gains derived from the eligible business for ten consecutive assessment years. The CIT(A) emphasized that once losses incurred in earlier years were set off against other income, they could not be notionally brought forward for set-off against the current year's profits. This interpretation aligns with the judgments in cases such as Velayudhaswamy Spinning Mills Pvt. Ltd. vs. ACIT and CIT vs. Mewar Oil & General Mills Ltd., which support the assessee's claim. The CIT(A) also referenced the case of Madhav Marble & Granites Ltd., where similar deductions were allowed, and the decision was upheld by the ITAT. Consequently, the CIT(A) deleted the disallowance of Rs. 52,86,966, allowing the assessee's claim under Section 80IA. 2. Disallowance of Higher Depreciation for Windmills: The second and third grounds pertain to the disallowance of higher depreciation for windmills installed at Coimbatore and Sadiya. The A.O. disallowed Rs. 31,64,509 for the Coimbatore windmill and Rs. 2,03,297 for the Sadiya windmill, based on the assessment order for A.Y. 2009-10. The A.O. allowed depreciation at 10% and 15% for foundation work and electrical items, respectively, against the assessee's claim of 80%. The CIT(A) observed that similar disallowances were addressed in the assessee's case for A.Y. 2008-09, where depreciation on foundation work and electrical installations was allowed at the rate applicable to windmills. This decision was upheld by the ITAT. The CIT(A) reiterated that the facts and circumstances of the current case were identical to those of the previous years, and there was no reason to deviate from the earlier decisions. Therefore, the CIT(A) deleted the total disallowance of Rs. 33,68,166 for both windmills. Conclusion: The Tribunal agreed with the CIT(A)'s findings on both issues. The Tribunal confirmed that the issues were covered by earlier decisions in favor of the assessee and upheld the deletion of disallowances. Consequently, the appeal of the revenue was dismissed. Order: The appeal of the revenue in ITA No. 288/JU/2014 stands dismissed. Order pronounced in the Court on 12th August, 2014.
|
