2018 (10) TMI 1186 - HC - Income Tax

Entitlement to deduction u/s 80IA in respect of windmill unit - Held that - Substantial Questions of Law were considered by the Division Bench of this Court in the assessee s own case for the earlier Assessment Year in Prasad Productions P.Ltd. vs. Deputy Commissioner of Income Tax 2015 (3) TMI 158 - MADRAS HIGH COURT as held having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act - decided in favour of the assessee.

Summary

Issues:
- Appeal against order of Income Tax Appellate Tribunal regarding deduction under Section 80IA for windmill unit
- Interpretation of Section 80IA for computing profits and losses of windmill unit

Analysis:

1. The appellant filed an appeal against the Income Tax Appellate Tribunal's order for the Assessment year 2002-03 regarding the entitlement to deduction under Section 80IA of the Income Tax Act for a windmill unit. The substantial questions of law raised included the correctness of the Tribunal's decision on the deduction and the computation of profits for the windmill unit as the sole source of income for the assessee.

2. The Division Bench of the Madras High Court considered similar issues in the assessee's previous case and ruled in favor of the assessee. The court noted that the business undertakings were all windmills, and the assessee had claimed the benefit of deduction under Section 80IA. The court referred to previous decisions and held that when losses had already been set off against other income of the business enterprise, the assessee was eligible for the deduction under Section 80IA.

3. Citing relevant precedents, the court emphasized that the facts of the present case were similar to previous decisions where the court had ruled in favor of the assessee. The court highlighted that following the precedent set in earlier cases, the appeal was allowed, and the order of the Tribunal was set aside. The court concluded that the substantial questions of law were answered in favor of the assessee, leading to the allowance of the appeal with no costs.

4. In light of the court's decision and the interpretation of Section 80IA, the appellant's appeal was allowed, and the substantial questions of law were resolved in favor of the assessee. The court's decision was based on the application of relevant legal principles and precedents in determining the eligibility of the assessee for the deduction under Section 80IA for the windmill unit.