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2020 (8) TMI 443 - HC - Income TaxDeduction u/s 80 IA - Exclusion of profits/income derived from wind energy generated and distributed through TNEB in the computation of taxable total income - HELD THAT - Tribunal in the impugned order discussed the assessee's appeal following the decision of the Special Bench of the Tribunal in the case of ACIT vs. Goldmine Shares and Finance Pvt. Ltd. 2008 (4) TMI 405 - ITAT AHMEDABAD . It cannot be disputed that the decision in the case of Goldmine Shares and Finance Pvt. Ltd. is no longer good law in the light of the decision of the Division Bench of this Court in the case of Velayudhaswamy Spinning Mills (P) LTD. vs. Assistant Commissioner of Income Tax 2010 (3) TMI 860 - MADRAS HIGH COURT which has been confirmed by the Hon'ble Supreme Court 2016 (11) TMI 373 - SC ORDER . Therefore, the Substantial Questions of law have to be answered in favour of the assessee. We do not think that a remand is required in the matter, more particularly, when the assessment is of the year 2006. However, when the Assessing Officer gives effect to the decision of this Court answering the Substantial Questions of law in favour of the assessee, it will be well open to him to proceed in accordance with law. - Decided in favour of assessee.
Issues:
1. Rejection of claim for deduction under Section 80 IA of the Income Tax Act on wind energy profits. 2. Interpretation of provisions in sub section (5) of Section 80 IA. 3. Control of Section 80 IA by Section 80 AB. 4. Envisaging carried forward and set off of unabsorbed losses/depreciation in wind energy unit profits. 5. Ex parte order by the Appellate Tribunal without opportunity for hearing. Analysis: Issue 1: The appeal challenged the rejection of the claim for deduction under Section 80 IA of the Income Tax Act on the profits derived from wind energy generated and distributed through TNEB in the computation of taxable total income for the assessment year 2004-2005. Issue 2: The Appellate Tribunal's interpretation of the provisions in sub section (5) to Section 80 IA was questioned, particularly regarding the rejection of the claim of deduction on the basis of this interpretation and its impact on the purpose of granting the deduction to entities involved in developing wind energy farms. Issue 3: The legal position regarding the control of Section 80 IA by Section 80 AB was raised, emphasizing that the provisions of Section 80 IA should not be controlled by Section 80 AB, especially in the context of sub section 5 of Section 80 IA. Issue 4: The Tribunal's conclusion regarding the carried forward and set off of unabsorbed losses/depreciation and interest of prior years in the profits of the eligible wind energy unit for quantifying the deduction from the total taxable income for the assessment year was challenged. The absence of explicit or implicit provision for such carried forward and set off in sub section 5 of Section 80 IA was highlighted. Issue 5: The Appellate Tribunal's decision to pass an ex parte order without providing an opportunity for hearing and rejecting the prayer for adjournment without reason was contested. The lack of procedural fairness in the conduct of the Tribunal was a significant concern raised in this issue. The judgment delivered by the High Court of Madras, with Honourable Mr. Justice T.S. Sivagnanam and Honourable Mrs. Justice V. Bhavani Subbaroyan, addressed the substantial questions of law raised by the appellant. The Court considered the impact of previous decisions, notably the case of Velayudhaswamy Spinning Mills (P) LTD. vs. Assistant Commissioner of Income Tax, which had been confirmed by the Hon'ble Supreme Court. The Court held that the decision in the case of Goldmine Shares and Finance Pvt. Ltd. was no longer valid law. Consequently, the Substantial Questions of law were answered in favor of the assessee, leading to the allowance of the appeal, setting aside of the impugned order, and a ruling in favor of the assessee. The Court declined the need for a remand, especially considering the assessment year of 2006, but allowed the Assessing Officer to proceed in accordance with the law once the decision of the Court was implemented.
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