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TMI Blog2016 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... including civil work, expenses of erection and commissioning work, etc. - Held that:- The capital expenditure incidental to the windmill has to be tested on the touchstone of the functional test and the assessee will be entitled to higher rate of depreciation on such incidental expenditure, if it has no other use except for power generation done by the windmill. Accordingly, we hold that the Revenue is misdirected itself in law in making the impugned disallowance of depreciation. - Decided in favour of assessee Disallowance of foreign tour and travelling expenses - Held that:- As find that the CIT(A) has confirmed the estimation of disallowance on the ground that the reply is general and business purpose has not been substantiated in respect of certain visits noted above. In the absence of specific details, we decline to interfere with the orders of the CIT(A). - Decided against assessee - ITA Nos.1893, 1894/PN/2013, ITA Nos.2078, 2079/PN/2013, ITA No.213/PN/2014 - - - Dated:- 20-1-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Assessee : Smt. Deepa Khare For The Department : Shri Santosh Kumar ORDER PER PRADIP KUMAR KEDIA, AM : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of generating electricity. [3] On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax [Appeals], Kolhapur erred in not following the decision of Hon'ble High Court of Gujarat in the case if Sintex Industries Ltd. Vs. A.C.I.T. 37 taxman 217(Guj.) wherein the Hon'ble Gujarat High Court held that deduction is not allowable, involving identical facts. [4] The order of the Ld. Commissioner of Income Tax [Appeals], Kolhapur be vacated and that of the Assessing Officer be restored. [5] The appellant craves leave to add, alter, amend or modify or delete any of the grounds of appeal at the time of hearing. 5. In essence, the only issue raised by these grounds are pertaining to eligibility of deduction under section 80IA(5) of the Act on profits earned from generation and sale of electricity without setting-off the losses of other units engaged in the same business. 6. The relevant facts concerning the issue are that the assessee company filed its return of income for the assessment year 2008-09 under section 139(1) declaring total income of ₹ 7,23,87,710/-. From the computation of total income filed, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant for the purposes of section 80IA(5) of the Act. He, accordingly, reversed the order of the Assessing Officer and held that the assessee is entitled to deduction under section 80IA of the Act as claimed. 8. The Revenue is in appeal against the order of the CIT(A). 9. The only issue for our consideration is whether the assessee is entitled to claim deduction under section 80IA(5) in respect of profits of eligible undertaking (Satara unit) without set-off the losses of other undertakings of the assessee engaged in same line of business or not. We find that the issue is no longer res integra. It is evident from the facts of the record that the assessee has positive Gross Total Income to the tune of ₹ 7.58 crore. There is no dispute that the assessee has earned income from ₹ 33,14,205/- windmill situated at Satara unit which is an eligible undertaking with reference to section 80IA(5) of the Act.. Therefore, profit from Satara unit is available to the assessee for deduction under section 80IA(5) of the Act. We observe that the assessee is also having positive Gross Total Income after setting-off of brought forward losses and unabsorbed depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, we decline to interfere with the order of the CIT(A). 11. In the result, the appeal of the Revenue in ITA No.2078/PN/2013 relating to assessment year 2008-09 is dismissed. ITA No.2079/PN/2013, A.Y. 2009-10 (Revenue s Appeal): ITA No.213/PN/2014, A.Y. 2010-11 (Revenue s Appeal): 12. Above captioned appeals filed by the Revenue are against the respective orders of CIT(A), Kolhapur, dated 24.09.2013 and 20.11.2013 relating to assessment years 2009-10 and 2010-11 passed under section 143(3) of the Act. 13. In these appeals for subsequent years also, the Grounds of Appeal raised by the Revenue are identical to the appeal of the Revenue in ITA No.2078/PN/2013 relating to assessment year 2008-09 except for the amount of claim of deduction under section 80IA of the Act. For the parity of reasoning, these appeals of the Revenue in ITA No.2079/PN/2013 and ITA No.213/PN/2014 relating to assessment years 2009-10 and 2010-11 respectively are also dismissed. ITA No.1893/PN/2013, A.Y. 2008-09 (Assessee s Appeal): 14. The above captioned appeal filed by the assessee is against the order of CIT(A), Kolhapur, dated 03.09.2013 relating to assessment year 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow and submissions made on behalf of the revenue. The only issue for adjudication before us is allowability of similar depreciation rate as applicable to windmills, also to the foundation civil work and erection commissioning work executed for these windmills. It is the case of the assessee before the Assessing Officer as well as before the CIT(A) that entire expenditure together with cost of windmill is entitled to same rate of depreciation at 80% as the other expenditure incurred towards foundation civil work and erection commissioning work , etc. are integral part of windmills and are directly attributable to installation and operational functioning of wind turbine. Since the civil work and erection commissioning expenses incurred are in relation to installation of windmill, depreciation on the same should be provided at the rate applicable to windmill. We find that the aforesaid assertions made on behalf of the assessee before the Revenue remains uncontroverted. Accordingly, We are of the firm view that the expenses incurred on erection commissioning, civil work, etc. being necessary adjunct to the windmill and is not meant for any other purposes other than f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative for the Revenue relied upon the orders of the authorities below. 23. We find that the CIT(A) has confirmed the estimation of disallowance on the ground that the reply is general and business purpose has not been substantiated in respect of certain visits noted above. In the absence of specific details, we decline to interfere with the orders of the CIT(A). 24. In the result, the Ground No.2 is dismissed. 25. Ground No.3 is dismissed as not pressed. 26. In the result, the appeal of the assessee in ITA No.1893/PN/2013 relating to assessment year 2008-09 is partly allowed. ITA No.1894/PN/2013, A.Y. 2009-10 (Assessee s Appeal): 27. The above captioned appeal filed by the assessee is against the order of CIT(A), Kolhapur, dated 24.09.2013 relating to assessment year 2009-10 passed under section 143(3) of the Act. 28. In this appeal, the Grounds No.1 and 2 are identical to the appeal of the assessee in ITA No.1893/PN/2013 relating to assessment year 2008-09. For the parity of reasoning, our decision in ITA No.1893/PN/2013 relating to assessment year 2008-09 shall apply mutatis-mutandis to this appeal of the assessee in ITA No.1894/PN/2013 relating to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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