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Income Tax Appellate Tribunal, “B ” BENCH, CHENNAI
Before: SHRI A.MOHAN ALANKAMONY & SHRI S.S. GODARA
आदेश / O R D E R
PER S.S. GODARA, JUDICIAL MEMBER This Revenue’s appeal for assessment year 2010-11; emanates from order dated 08.08.2014 passed by the Commissioner of Income Tax (Appeals)-II, Madurai in allowing I.T.A.No.2832/Mds/2014 :- 2 -: section 80IA deduction of �2,13,77,557/-, in proceedings under section 143(3) of the Income Tax Act, 1961 [in short the “Act”].
The assessee/company is engaged in textile business. It had filed its ‘return’ on 22.09.2010 stating income of �5,20,99,116/-. The same was ‘summarily’ processed.
The Assessing Officer took up ‘scrutiny’. He inter-alia noticed the assessee claiming section 80IA deduction of �2,13,77,557/- for its three windmills. Two of them were installed in assessment year 2005-06. The third one in assessment year 2006-2007. It had chosen the impugned assessment year as ‘initial assessment year’ for claiming the said deduction. The case law of M/s. Velayutha Swamy Spinning Mills vs. ACIT, 340 ITR 477 was also quoted. The Assessing Officer in assessment order 22.03.2013 referred to section 80IA (5) of the Act and observed that wind mills treated as separate units did not give rise to any positive income after setting off unabsorbed depreciation from the years of installation. He observed that the Revenue’s special leave petition is pending before the hon’ble Apex court. The assessee’s alternative plea of segregating windmills as per respective years of I.T.A.No.2832/Mds/2014 :- 3 -: installation also stood declined. This resulted in the impugned disallowance of �2,13,77,557/-.
The assessee preferred an appeal. The CIT(A) has followed the aforesaid case law and his orders in preceding assessment years for treating the assessee eligible for section 80IA deduction. Therefore, the Revenue is in appeal.
We have heard both sides and perused the Revenue’s findings.
There is no dispute on facts. The assessee has not claimed section 80IA deduction in the years of installation (supra) of the windmills.
The impugned assessment year has been treated as ‘initial assessment year’ for claiming section 80IA relief. The Revenue seeks to set off unabsorbed depreciation from the years of installation onwards against the profits of the ‘initial assessment year’ i.e. the impugned assessment year. We find that the hon’ble jurisdictional high court has decided the very substantial question of law in the assessee’s favour. The same view is reiterated in a recent decision (2015) 371 ITR 1 (Madras) CIT vs. Eastern Exports Global Clothing Private Limited.
We draw support therefrom and uphold the order under challenge. The Revenue’s ground is rejected. I.T.A.No.2832/Mds/2014 :- 4 -:
The Revenue’s appeal is dismissed.
Order pronounced on Friday, the 27th of February, 2015, at Chennai.