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Deduction for Wind Power Generation Allowed Under Section 80IA The Tribunal upheld the allowance of deduction under section 80IA of the Income Tax Act undertaking wise, rejecting the Revenue's appeal. It determined ...
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Deduction for Wind Power Generation Allowed Under Section 80IA
The Tribunal upheld the allowance of deduction under section 80IA of the Income Tax Act undertaking wise, rejecting the Revenue's appeal. It determined that each windmill constituted a separate undertaking eligible for deduction, not to be offset by losses from other units. The decision aligned with previous cases and distinguished a Gujarat High Court ruling where income was Nil post-loss adjustment. Therefore, the deduction for profit earned from wind power generation was upheld on an undertaking-wise basis for the assessment year 2011-12.
Issues: - Allowance of deduction under section 80IA of the Income Tax Act undertaking wise and not on a consolidated basis.
Analysis: 1. The Revenue appealed against the CIT(A)'s order regarding the allowance of deduction under section 80IA of the Act undertaking wise and not on a consolidated basis for the assessment year 2011-12.
2. The assessee claimed deduction under section 80IA(4)(iv)(a) for profit earned from wind power generation from its windmills. The Assessing Officer questioned the claim being undertaking wise and not business wise. The assessee argued each unit was a separate undertaking eligible for deduction for 10 out of 15 years. The Assessing Officer disagreed, curtailing the deduction to &8377; 1,69,30,553 based on the previous year's issue.
3. The CIT(A) upheld the deduction being allowed undertaking wise, citing precedents. The Revenue contested this decision.
4. The Revenue relied on legal judgments emphasizing adjusting losses against profits for deduction calculations. The assessee cited Tribunal decisions supporting separate windmills as distinct undertakings for deduction purposes.
5. The Tribunal noted each windmill was treated as a separate undertaking, as established in previous cases. The assessee's profits from one windmill were not to be offset by losses from others, in line with the Tribunal's interpretation.
6. The Tribunal differentiated the present case from a Gujarat High Court ruling where income after loss adjustment was Nil, unlike the assessee's situation. Therefore, the deduction under section 80IA(4) was upheld undertaking wise, dismissing the Revenue's appeal.
7. The Tribunal dismissed the Revenue's appeal, affirming the allowance of deduction under section 80IA of the Act undertaking wise.
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