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TMI Blog2017 (5) TMI 1400X X X X Extracts X X X X X X X X Extracts X X X X ..... ntical facts & circumstances the Hon’ble ITAT decided the issue in favor of assessee by allowing the compensation on account of power generation loss is entitled for deduction u/s. 80-IA of the Act in the case of Lahoti Overseas Ltd. Vs Dy. Commissioner of Income Tax [2016 (4) TMI 591 - ITAT MUMBAI] DR before us has alleged that the impugned compensation is in the nature of incentive which in our considered view is not true. It is because of the fact that it was given due to non-generation of units as guaranteed by the SEL. Thus by no stretch of imagination the compensation can be equated with the incentive. Thus we deleted the addition - Decided in favour of assessee. - ITA No.1100/Kol/2014 - - - Dated:- 26-5-2017 - Shri Waseem Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated facts are that assessee in the present case is a limited company and engaged in manufacturing and trading in iron and steel products, share trading and wind power generation. The assessee in the year under consideration claimed deduction u/s. 80-IA of the Act for ₹1,23,29,042/-. The Assessing Officer during the course of assessment proceedings observed that the aforesaid deduction u/s. 80-IA of the Act was claimed by assessee after considering the receipt of ₹ 87 lacs on account of compensation awarded by M/s Suzlon Energy Ltd. (SEL for short) due to nongeneration of guaranteed electricity units. The aforesaid compensation was pertaining to the period beginning from June 2006 to May 2008. On question by the AO about the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for deduction u/s. 80IA on the compensation received by it from Suzlon Energy Ltd. therefore, accordingly the disallowance made by the AO of ₹ 87,00,000/- is confirmed. Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us on the following grounds:- 1. Because that the ld. Commissioner of Income Tax (Appeals) was erred in law as well as in facts in upholding the disallowance made by the ld. A.O on account of deduction u/s. 80-IA on a sum of ₹ 87 lacs, on the alleged ground that the deduction on the said sum was not eligible for deduction u/s. 80-IA. 2. Because that the ld. Commissioner of Income Tax (Appeals), was erred in law as well as in facts in holding that, the sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneration business. Thus it can be inferred that the impugned compensation has direct nexus with the business operations of the assessee and accordingly eligible for deduction under section 80IA of the Act. We also find that in the identical facts circumstances the Hon ble ITAT decided the issue in favor of assessee by allowing the compensation on account of power generation loss is entitled for deduction u/s. 80-IA of the Act in the case of Lahoti Overseas Ltd. Vs Dy. Commissioner of Income Tax in ITA No.3821/Mum/2012 vide order dated 30-3-2016 for the A.Y. 2008-09. The relevant extract of the order is reproduced below:- In the instant case the amount is paid by Suzlon India Limited towards specific performance due to short gene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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