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Issues:
1. Allowance of deduction under section 80-IA of the IT Act, 1961 despite no profits from wind power generation. 2. Acceptance of linkage between consultancy, sale, and marketing business with wind power generation business without fresh evidence. 3. Interpretation of deduction availability under section 80-IA for profits from industrial undertakings and composite businesses. 4. Dispute over the mode of computing profits for deduction under section 80-IA. Analysis: Issue 1: The appeal concerned the Revenue's challenge against the CIT(A)'s decision to allow deduction under section 80-IA despite the absence of profits from wind power generation. The assessee, a private limited company, derived income from supplying electricity and providing consultancy services related to wind energy. The primary contention was the computation of profits and gains from power generation and consultancy services. Issue 2: The dispute revolved around the relationship between the consultancy, sale, and marketing business with the wind power generation business. The assessee claimed that the primary motive was consultancy, while power generation was incidental. The AO disagreed, asserting that deduction under section 80-IA should only apply to power generation income after setting off depreciation on wind turbines solely against power generation income. Issue 3: The interpretation of deduction availability under section 80-IA for profits from industrial undertakings and composite businesses was a key point of contention. The AO's computation method differed from the assessee's approach, leading to conflicting views on the applicability of the deduction based on the nature of income sources. Issue 4: The mode of computing profits for deduction under section 80-IA was a central issue. The CIT(A) supported the assessee's computation method, prompting the Revenue's appeal. The debate focused on whether the deduction should be allowed on consultancy income in addition to power generation income, considering the primary purpose of wind turbines and the specific provisions of the IT Act. The Tribunal analyzed the provisions of section 80-IA and emphasized that the deduction should be based on profits derived from the eligible business, i.e., power generation. The Tribunal rejected the assessee's argument that consultancy income should also qualify for the deduction, highlighting the primary purpose of the wind turbines in power generation. The decision aligned with the Supreme Court's ruling in Pandian Chemicals and other relevant case laws. In conclusion, the Tribunal allowed the Revenue's appeal, reversing the CIT(A)'s decision. The judgment clarified the computation method for deduction under section 80-IA, emphasizing the need to align with the specific provisions of the Act and the primary source of income for eligibility.
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