MDS WIND FRMS PRIVATE LIMITED,POLLACHI vs. ITO CORPORATE WARD 2, COIMBATORE

Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of the order of learned Commissioner of Income Tax (Appeals)-1, Coimbatore [CIT(A)] dated 07-12-2017 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 15-02-2016. The Ld. AR submitted that the main issue is denial of deduction u/s 80-IA. It was submitted that the erstwhile firm Meenakshi Distribution Service got converted into a corporate entity and it was not a case of splitting-up or reconstruction of business as wrongly understood by lower authorities. In the said background, Ld. AR pleaded to restore the matter back to the file of Ld. AO for fresh consideration on the ground that no independent findings have been rendered in the impugned order. To support the argument, Ld. AR placed on record the details of partnership and company as under: - DETAILS OF PARTNERSHIP / COMPANY Date Name of PAN No. Partners / Nature of Remarks the Firm / Shareholders Business Company 29.09.2007 Meenakshi AAOFM6571E V. Ramanathan 1. Pharmaceutical Refer Page 2 Distribution C. Kannathal Retailing Service N. Bhuvaneswari 2. Windmill T. Kalyani 11.03.2012 Deed of AAOFM6571E V.Ramanathan 1. Pharmaceutical Reconstitution of V.Narayanan Reconstituti Retailing (included existing firm with on of old V.Chinniah in objects but never admission of T.Kalyani firm and carried on) new partners and name RM.Vasanthi 2. Windmill change of name. change as N.Bhuvaneswari MDS Wind C.Kannathal (Refer pages 11 Farms and 15) (Formerly known as Meenakshi Distribution Service with PAN: AAOFM657 1E) 23.03.2012 MDS Wind AAHCM8744M V.Ramanathan Wind Energy MOA refers to the V.Narayanan Farms Pvt. Generation and partnership deed Ltd. V.Chinniah Sale dated 29.09.2007 T.Kalyani [Conversion and the deed of MDS RM.Vasanthi dated 11.03.2012 Wind N.Bhuvaneswari for change in name Farms C.Kannathal and admission of under Part partners IX of (Refer pages 19 the and 20) Companies Act, 1956] The Ld. Sr. DR submitted that the relevant facts are not available on record. Having gone through the orders of lower authorities, our adjudication would be as under.

The assessee being resident corporate entity was assessed u/s 143(3) on 15.02.2016. The assessee was engaged in the business of wind energy generation and sale. The assessee company was formed on 23.03.2012 and it claimed deduction u/s 80-IA for Rs.57.55 Lacs. However, Ld. AO denied the same on the allegation that the assessee did not fulfil the conditions of Sec.80-IA(3) as well as Sec.80-IA(5). Another issue that cropped up was claim of higher depreciation while computing Book Profit u/s 115JB. The Ld. AO denied the same. Though the assessee preferred further appeal before first appellate authority, however, the Ld. CIT(A) merely endorsed the stand of Ld. AO in paras 5 & 6 of the impugned order and dismissed the appeal. Aggrieved, the assessee is in further appeal before us, 3. After going through the impugned order, we find that Ld. CIT(A) has not rendered any independent findings and merely endorsed the view of Ld. AO. Keeping in view the submissions made before us, we deem it fit to set aside the impugned order and restore both the issues back to the file of Ld. AO for fresh consideration. The assessee is directed to demonstrate that it was entitled for deduction u/s 80-IA and also justify claim of higher depreciation u/s 115JB. Needless to add that adequate opportunity of hearing shall be granted to the assessee.

The appeal stand allowed for statistical purposes.