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TMI Blog2019 (4) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the Ld.CIT(A) was right in allowing the benefit of deduction u/s 80IA in respect of each unit without setting off of loss incurred by other eligible units. Hence, we are inclined to uphold the findings of CIT(A) and dismiss appeal filed by the revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ring submissions of the assessee held that deduction provided u/s 80IA shall be allowed to each unit without considering profit or loss of other eligible units. The Ld.CIT(A) further observed that if both sub sections of section 80IA are read together, it is very clear that once other conditions of section 80IA are fulfilled, the profit is to be computed undertaking-wise and not for business as a whole. Since the AO has not doubted the eligibility of deduction with respect to different windmills, he found that for the purpose of determining the quantum of deduction u/s 80IA for each undertaking, the computation has to be made as if such eligible business were the only source of income to the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including the assessnment year for which the determination has to be made. The relevant observations of the Ld.CIT(A) are as under:- "19. I have carefully considered the above submissions of the appellant and the impugned assessment order on this issue, My observations are as under- 19.1 During the appellate proceedings, the appellate has submitted the details regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment and including the assessment year for which the determination is to be made. In the instant case, for WTG 1, WTG 2 and WTG 3, the initial assessment years for the purpose of deduction u/s 80IA are A.Y.s 2011-12. 2011-12 and A.Y. 2012-13 respectively. There are positive profit for all the three Wind Mills in these years. For WTG 4 and WTG 5, the appellant has chosen initial assessment years being A.Y. 2013-14 and A.Y. 2015-16 respectively, since the provisions of IT. Act give an opportunity to the assessee to select any ten consecutive years out of 15 years for availing the benefits of deduction u/s 80IA. Availing this opportunity, the appellant has selected F.Y.s relevant to A.Y. 2013-14 and A.Y. 2015-16 as initial assessment year for the Wind Mills WTG4 and WTG5 respectively. No doubt, once initial assessment year is selected, the benefits have to be availed for ten consecutive years irrespective of whether there is a profit or loss from such undertaking. 19.4 In view of the above facts, in my considered opinion, once t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute with regard to the fact that the assessee is eligible for deduction u/s 80IA in respect of five windmills. The only dispute is with regard to whether each windmill constitute a separate undertaking and the profit or loss of that undertaking alone will be considered for the purpose of deduction u/s 80IA or the sum of profit or loss of all five undertakings together is eligible for deduction u/s 80IA. The co-ordinate bench of ITAT, Mumbai Bench "C" in the case of Punit Construction Co vs JCIT (supra) has considered an identical issue in light of number of windmills and after considering relevant provisions of the Act, including sub section (5) of section 80IA, held that deduction has to be given unit-wise without considering profit or loss of other eligible units. The relevant observations of the Tribunal are as under:- "10. We have heard both the parties, perused the material available on record and gone through the orders of authorities below. We have also carefully considered provisions of section 80IA and case laws relied upon by both parties. The facts with regard to eligibility for claiming deduction under section 80IA has not been disputed by the lower authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is having power generation segment through windmills. The assessee has set up five windmills. All the five units are part of power generation segment. Now the question is whether deduction provided under section 80IA shall be given on profits and gains derived from power segment business as the only eligible business or profits and gains derived from each windmills as an eligible business without considering profit or loss of other windmills. There is no dispute with regard to deduction to be given under chapter VIA against gross total income computed from all source of income. Even various decisions of the Hon'ble Supreme Court, including in the case of CIT vs. Liberty India I T A No . 63 37 & 6 9 80 / M u m/ 2 01 4 (supra) have clearly held that special deduction under chapter VIA has to be computed on the gross total income and such gross total income has to be computed segment wise business after allowing all the deduction allowable under section 32 to 43D. The Hon'ble Bombay High Court in the case of Plastiblends India Ltd. Vs. ACIT (2009) 185 Taxman 187 after considering the ratio of Hon'ble Supreme Court in the case of Liberty India (supra) held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow both units are eligible units. The period of deduction specified under the act is 10 years for eligible units. Unit one is claiming deduction from initial assessment year and it may end up in some period. Unit two is claiming deduction from next year and it may end up in different year. If one takes initial assessment year from which unit one claims deduction for ten years, the assessee may loose benefit of deduction for one year for unit two, because it has commenced deduction from next year. If you take initial year of claim from the date on which unit two starts claiming deduction, then the assessee may get the benefit for more than 10 years for unit one, if you consider both units as one eligible business and profit or loss of both units is consolidated. This may not be the true intention of the legislature and for that reason the legislature consciously used the word undertaking or unit so as to give a deduction towards eligible units, in a situation where, the assessee is having more than one units in different locations, out of which one unit may be an eligible unit and another unit may not be eligible unit and also one unit may get deduction for different period and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with said provisions and as such there was no 10. In this view of the matter and being consistent with the view taken by the co-ordinate bench, which is further supported by the decision of Hon'ble Delhi High Court in the case ofCIT vs Dewan Kraft Systems Pvt Ltd (supra), we are of the considered view that the Ld.CIT(A) was right in allowing the benefit of deduction u/s 80IA in respect of each unit without setting off of loss incurred by other eligible units. Hence, we are inclined to uphold the findings of Ld.CIT(A) and dismiss appeal filed by the revenue. ITAs No.6968 & 6969/Mum/2017 11. The facts and issue involved in these two appeals are identical to the facts and issue we have already considered in ITA No.6967/Mum/2017 for AY 2012-13. The reasons given therein by us in the preceding paragraphs shall mutatis mutandis apply to this appeal also. Therefore, for the detailed reasons recorded in the preceding paragraph, we are of the considered view that there is no error in the findings recorded by the CIT(A) in directing AO to allow deduction u/s 80IA, unit-wise without setting off of loss of other units. Hence, we are inclined to uphold the order of Ld.CIT(A) and dismiss a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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