DCIT, MADURAI vs. VTM LIMITED, VIRUDHUNAGAR

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -1, Madurai, dated 16.10.2015 and pertains to assessment year 2011-12.

We have heard Shri Supriyo Pal, the Ld. Departmental Representative and Shri R. Srinivasan, the Ld.counsel for the assessee. The only issue arises for consideration is deduction claimed by the assessee under Section 80-IA of the Income-tax Act, 1961 (in short 'the Act'). The Assessing Officer disallowed the claim of the assessee under Section 80-IA of the Act in respect of windmill on the ground that the assessee excluded loss from the eligible business. The assessee has also used the electricity generated by windmill for captive consumption. On appeal by the assessee, the CIT(Appeals) allowed the claim of the assessee by placing reliance on the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (340 ITR 477).

We have carefully gone through the orders of both the authorities below and the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). This Tribunal is of the considered opinion that even though the electricity is used for captive consumption, the assessee is eligible for deduction under Section 80-IA of the Act. Moreover, the loss suffered cannot be excluded in view of the judgment of Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. (supra). Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

In the result, the appeal filed by the Revenue is dismissed.