KAILASH WINDFARMS,TIRUPUR vs. INCOME TAX OFFICER WARD 1 (1), TIRUPUR

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ITA 425/CHNY/2018Status: DisposedITAT Chennai09 August 2018AY 2014-153 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee purchased the windmill undertaking as a going concern, and this was not disputed by the Revenue, the assessee is eligible for the deduction under Section 80-IA.

What were the facts?

The assessee claimed a deduction under Section 80-IA for purchasing a windmill as a going concern. The Assessing Officer disallowed the claim, stating the windmill machinery was previously used by another company.

What were the issues?

Whether the purchase of a windmill as a going concern, where the machinery was previously used by another entity, disqualifies the assessee from claiming deduction under Section 80-IA.

Which sections of the Income-tax Act were involved?

Section 80-IA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ A’ SMC BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A.MOHAN ALANKAMONY

आदेश / O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER

1.

This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-3, Coimbatore, dated 28.11.2017 for the assessment year 2014-15.

2.

Shri S.Sridhar, the ld. Counsel for the assessee submitted that the only issue arises for consideration is disallowance of claim of assessee u/s.80-IA of the Act. According to the ld.A.R, the assessee claimed deduction of `26,31,820/- u/s.80(IA) of the Act. According to ld. Counsel for the assessee, the assessee purchased the windmill as a going concern. The ld. Assessing Officer disallowed the claim of assessee on the ground that the windmill undertaking was formed by transfer of machinery, which was earlier used by other company.

Further, the ld.A.R clarified that the windmill was purchased by the assessee as a going concern; therefore, it is not a case of formation of undertaking by using the machinery, which was used by the other company. Hence, the assessee is eligible for deduction u/s.80-IA of the Act for the remaining period.

3.

On the contrary, Mr.B.Sagadevan, ld. Departmental Representative submitted that for the purpose of claiming deduction u/s.80-IA of the Act, the assessee is to fulfill the conditions provided u/s.80-IA(3) of the Act. The ld.D.R submitted that the first condition is that the machinery shall not be transferred from other unit or plant. In other words, the machinery shall not be used by another undertaking.

In this case, admittedly, the machinery namely windmill was used by the other company. Therefore, the assessee is not eligible for deduction u/s.80-IA(3) of the Act.

4.

We have considered the rival submissions on either side and perused the relevant material available on record. The only dispute between the assessee and the Revenue, is that the machinery, namely windmill, was earlier used by other company. The assessee claims that the wind mill was purchased by the assessee as a going concern and does not form new undertaking. This fact is not disputed by the Revenue. In other words, the purchase of the wind mill undertaking as a going concern by the assessee is not disputed by the Revenue.

Therefore, this Tribunal is of the considered opinion that the assessee is eligible for deduction u/s.80-IA of the Act in respect of remaining period. Hence, orders of both the authorities below are set aside and the ld. Assessing Officer is directed to allow the claim of deduction made u/s.80-IA of the Act.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced on 09th August, 2018, at Chennai.

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