Tribunal Upholds Assessee's Deductions and Liability Decisions

The Tribunal dismissed both appeals for A.Y. 2012-13 and A.Y. 2013-14, upholding decisions in favor of the assessee regarding deduction u/s.80IA and liability on account of revised wages under the Wage Board recommendations for both assessment years. The Tribunal ruled that losses from prior years cannot offset income from the windmill unit in subsequent years and supported the assessee's claim for deduction under the mercantile system of accounting despite payments being made in later years.

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Issues:
1. Disallowance of deduction u/s.80IA for A.Y. 2012-13.
2. Deletion of addition made by AO relating to liability on account of revised wages for A.Y. 2012-13.
3. Disallowance of claim u/s.80IA for A.Y. 2013-14.
4. Deletion of addition on account of liability for payment of wages under Wage Board recommendations for A.Y. 2013-14.

Analysis:

A.Y. 2012-13:
1. The first issue pertains to the disallowance of deduction u/s.80IA. The AO disallowed the deduction as the assessee had suffered losses in the eligible wind mill unit in earlier years, exceeding the claim for the current year. However, the CIT(A) reversed this decision. The Tribunal noted that losses from years prior to the initial year cannot be set off against income from the wind mill after the initial year. Referring to a previous Tribunal order in favor of the assessee, the Tribunal upheld the CIT(A)'s decision on this issue.

2. The second issue concerns the deletion of the addition related to liability on account of revised wages. The assessee claimed a deduction for Wage Board Revision, which the AO disallowed citing no corresponding payment in the relevant year. The Tribunal observed that the assessee revised wages following a Central Government notification and claimed the deduction under the mercantile system of accounting. Despite the payment being made in subsequent years, the Tribunal upheld the deletion of the liability on account of revised wages for the year under consideration.

A.Y. 2013-14:
3. The first issue raised for this assessment year is the disallowance of a claim u/s.80IA. The Tribunal, following the decision for the previous year, upheld the deletion of the claim.

4. The second issue relates to the deletion of an addition on account of liability for payment of wages under Wage Board recommendations. Similar to the previous year, the Tribunal upheld the deletion of the disallowance towards additional liability for payment of wages for the relevant year.

In conclusion, the Tribunal dismissed both appeals for A.Y. 2012-13 and A.Y. 2013-14, maintaining the decisions in favor of the assessee on the issues of deduction u/s.80IA and liability on account of revised wages under the Wage Board recommendations for both assessment years.

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