TaxTMI 
TaxTMI 
2013 (12) TMI 192
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....r himself has mentioned the assets were originally purchased by the industrial undertaking and hence the subsection 3(ii) of Section 80IA will not apply to the assessee. 4, 5 & 6. xxxxxxxxx xxxxxxxxxxxxx 7. The learned Commissioner of Income Tax (Appeals) has erred in not considering the fact that, only the rate at which amount is credited by the Tamilnadu Electricity Board in the assessee's electricity bill towards the windmill generation of the assessee has been adopted by the assessee as the income of windmill and the assessing officer cannot adopt a notional rate in arriving the total receipts of the assessee in this case. Further, the learned CIT(Appeals) has not considered the decision of ITAT, Chennai in the case of M/s. Velayuthasamy Spinning Mills (P) Ltd. (ITA No. 850 (Mds)/2011) allowing the assessee to consider the buying rate from TNEB as the income of the undertaking." 3. In support of the grounds raised, the AR has vehemently argued that the CIT(A) has erred in upholding the findings of the Assessing Officer that assessee's claim of deduction is barred by section 80IA(3) of the "Act". Therefore, by referring ....
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....ed by the assessee instead of that charged by the TNEB from its consumers. Accordingly, the Assessing Officer computed assessee's income as Rs. 29,72,938/-. 7. Aggrieved, the assessee carried the matter in appeal. The CIT(A) has also affirmed the findings of the Assessing Officer on maintainability of the claim of deduction in assessee's case by relying on section 80IA(3) clauses (i) & (ii) of the "Act". It is in this backdrop that the assessee is in appeal before us. 8. After perusing the findings of the Assessing Officer and the CIT(A), it is evident to us that the assessee had earlier purchased the windmill in question, generated wind energy, sold the windmill to its sister concern and got the same leased back and raised claim of deduction in hand. The moot question before us is as to whether the said course of action adopted by the assessee is hit by section 80IA(3) or not. At this stage, we deem it appropriate to reproduce the said provision, which reads as under: (3) This section applies to an undertaking referred to in clause (ii) or clause (iv) or clause (vi) of sub-section (4) which fulfils all the following con....
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....business of its sister concern, the condition above said would come to play in these circumstances. The legislature in its wisdom has deliberately laid emphasis in using the word "any purpose", which is of widest possible amplitude being inclusive in nature covering the facts of the instant case. So far as case law (supra) cited by the assessee is concerned, we are of the view that the same is not applicable qua the peculiar facts and circumstances of the case. In the said case, the assessee's claim of deduction had satisfied the condition enshrined in section 80IA(3) of the "Act". In view of the said factual position, their Lordships have upheld the concerned assessee's claim. We also deem it appropriate to reproduce the relevant portion herein below: "10. There is no dispute with regard to the fact that Clause (ii) of the Section 80IA (4) was inserted in Section 80IA(3) by the Finance Act II of 2004 with effect from 1.4.2005 and that this was not with retrospective effect. It became applicable only after its insertion with effect from 1.4.2005. The Circular issued by DBDT explaining the provisions of Finance Act II of 2004 testifies the fact that this ....
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....A. Since the provisions of 80IA(3) are not applicable to the present assessee, it having commenced its business much prior to 1.4.2005, Section 80IA(3) would not disentitle it from claiming deduction under Section 80IA on its income from internet services and internet telephony services. 12. In our view, the Tribunal was right in holding that the assessee could not be said to have been formed by splitting up or reconstruction of the business already in existence as its business had commenced after 1.4.1995 and before 31.3.2005 and the assessee had started its business of fax and email services right from the financial year 2003 and 2005 and it continued to carry on the business of internet telephony. 13. Insofar as the objection of the revenue that there had been change in the name of pattern of shareholding it does not make any difference as it is a well settled rule of law that benefit under Section 80IA of the Act is available to an undertaking and not to the assessee since the undertaking continues to carrying on its business without any reconstruction of business already in existence. 14. Even ....