AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 1655
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....under Sec. 263 of the Income tax 1961, (for short 'Act') for A.Y 2011-12 and A.Y 2012-13, dated 21.03.2017 and 23.03.2017, respectively, which in itself arises from the respective assessment orders passed by the Dy. Commissioner of Income tax, Central Circle- 3(1), Mumbai u/s. 153A r.w.s. 143(3) of the 'Act', each dated 30.03.2015, in the case of Wind World Wind Resources Development Pvt. Ltd., Mumbai, which had been assailed before us as I.T.A. No(s).2371-2372/Mum/2017; AND the order passed by the Principal Commissioner of Income tax, Central-2, Mumbai under Sec. 263 of the Income tax 1961, which in itself arises from the order passed by the Dy. Commissioner of Income tax, Central Circle-3(1), Mumbai u/s. 153A r.w.s. 143(3) of the 'Act', dated 24.03.2015, in the case of J.N Investment & Trading Co. Pvt. Ltd., Mumbai, which had been assailed before us as I.T.A. No.2373/Mum/2017. That as certain common issues are involved in the aforesaid appeals, therefore, they are taken up and being disposed of by way of a consolidate order. We first take up the appeal for A.Y. 2007-08 in I.T.A. No.2370/Mum/2017. The assessee assailing the order passed by the Principal Com....
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....er proceeded with and framed assessment u/s. 153A r.w.s. 143(3) at the returned loss of Rs. 9,53,44,278/-. 4. The Principal Commissioner of Income tax, Central-2, Mumbai deliberated on the assessment records of the assessee for the year under consideration, viz. A.Y. 2007-08, and observed that the assessee during the year under consideration had reflected 'business operating income' at Rs. Nil. That it was noticed by the Principal CIT that the assessee in its 'Profit & loss a/c' for the year under consideration, viz. AY: 2007-08, had after debiting operating and other expenses of Rs. 2,40,70,708/- and depreciation of Rs. 1,03,03,651/-, shown a 'business loss' of Rs. 3,43,74,359/-. The A.O further observed that the assessee in its 'Computation of income' after claiming 'depreciation' of Rs. 7,14,98,291/ on the 'fixed assets' as per the provisions of the Income-tax Act, had computed the 'business loss' at Rs. 9,53,44,278/- , which was carried forward by it for further adjustment/set off in the subsequent years. The Principal CIT on the perusal of the records noticed that though the assessee company had not carried out/commenc....
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....ed by the assessee that as on the date of initiation of the Search & Seizure proceedings under Sec. 132 in its case, no proceedings for the year under consideration, viz. AY: 2007-08 were pending, therefore, in the absence of any incriminating evidence found during the course of the search & seizure proceedings, no addition/disallowance was permissible in respect of the unabated assessment of the assessee for the year under consideration. The assessee in support of its contention relied on the following judgments/orders of the Hon'ble High Court of Bombay and the 'Special Bench' of ITAT, Mumbai:- (i) CIT v. Murli Agro Product [2014] 49 taxmann.com 172 (Bom.) (ii) CIT v. Continental Warehousing Corpn. (Nhava Sheva) Ltd. [2015] 374 ITR 645 (Bom.) (iii) All Cargo Global Logistics Ltd. v. Dy. CIT [2012] 137 ITD 287 (Mum.). (iv) Asstt. CIT v. Pratibha Industries Ltd. [2013] 141 ITD 151 (Mum.). 7. The Principal CIT after deliberating on the aforesaid contentions of the assessee, though did not deny the factual position that no incriminating material was found during the course of the Search & Seizure proceedings conducted on the assessee....
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....ed order of the A.O. The ld. A.R deliberating on the nature of business of the assessee company, therein submitted that it was engaged in the business of setting of infrastructure facilities for evacuation of power generator through wind power projects. The ld. A.R submitted that during the year under consideration the assessee company had installed a Sub-station at a cost of Rs. 75,95,76,905/-, and to fortify his said contention took us through the 'Schedule' of 'Fixed assets' forming part of the 'balance sheet' of the assessee company for the year under consideration (Page 10 of 'APB'). It was averred by the ld. A.R that though the aforesaid sub-station was put to use during the year under consideration, however, the assessee had started billing the parties in the next year. The ld. A.R in order to drive home his contention that the installation of the sub-station had taken place during the year under consideration, drew our attention to a 'Provisional certificate' issued by the Dy. Chief Electrical Inspector (Rajkot), wherein the latter had verified that the inspection of the electrical installations of the transformer of M/s. Enercon (Ind....
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....reliance was placed on the aforementioned orders of the Tribunal (Page 16-18) of 'APB'. It was thus averred by the ld. A.R that the A.O after deliberating on the facts of the case in light of the aforesaid settled position of law, had thus taken a plausible view and concluded that in the absence of any incriminating material having been found during the course of the Search & seizure proceedings conducted on the assessee u/s 132(1), no other addition could be made in respect of the unabated assessment of the assessee for the year under consideration. It was thus submitted by the ld. A.R that the said plausible view of the A.O which was backed by the order of the 'Special bench' of the jurisdictional Tribunal, which was specifically relied upon by the assessee during the course of the assessment proceedings, thus, could not be characterized as an erroneous view. The ld. A.R further submitted that the issue that in case of an unabated assessment no addition in the absence of any incriminating material emerging during the course of the Search & seizure proceedings conducted u/s 132(1) can be made in the hands of an assessee, is no more res integra in light of the judgm....
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....O u/s 153A r.w.s. 143(3) was a 'first time' assessment framed as per the provisions of section 153A. The ld. D.R had tried to impress upon us that despite absence of any pending assessment or reassessment proceedings, in a case where earlier no assessment or reassessment had been framed prior to the Search & seizure proceedings conducted on the assessee u/s 132(1), but the same is preceded by a mere processing of the 'return of income' by way of an intimation u/s. 143(1), there would thus be no occasion to characterise the same as an unabated assessment. It was thus submitted by the ld. D.R that in a case where the 'return of income' of the assessee had merely undergone a summary acceptance u/s 143(1), then in the backdrop of the absence of any assessment earlier having been framed, the entire assessment in the case of the assessee would be qua open before the A.O. Thus, it was the case of the Ld. D.R. that in the absence of an assessment in a case where the 'return of income' had been summarily processed u/s. 143(1), the same despite absence of any pending assessment or reassessment proceedings in the hands of the assessee cannot be characterised as....
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....assessment framed by the A.O u/s 153A r.w.s. 143(3) would be a 'first time' assessment framed as per the provisions of section 153A. The ld. D.R submitted that in the case of 'first time' assessment framed by the A.O as per the provisions of section 153A, the entire assessment for the year under consideration would be qua open before the A.O. The ld. D.R thus submitted that the appeal of the assessee was devoid of any force, both on merits and on law. The ld. D.R averred that the Principal CIT after duly appreciating that the A.O in the absence of the necessary verifications had failed to disallow expenses and had wrongly allowed depreciation as claimed by the assessee, had thus rightly held the assessment order as erroneous and prejudicial to the interest of revenue and revised the same u/s. 263 of the 'Act'. 10. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and find that the fact that no incriminating material was found during the course of search and seizure action conducted u/s. 132(1)....
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....evant assessment year or years] referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. Provided also that the Central government may by rules made by it and published in the official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has been abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissione....
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....t is pending on the date of search, the issue of abatement cannot arise at all. We thus are of the considered view that in a case where no assessment or reassessment respect of a year is pending in the hands of the assessee on the date of initiation of the Search & seizure proceedings, then, irrespective of the fact that the return of income of the assessee had only been summarily processed under Sec. 143(1), the proceedings for the said year can safely be held to be unabated. 13. We find that our aforesaid view also stands fortified from the very fact that sub-section (2) of Section 153A further contemplates that where any order of assessment or reassessment made u/s. 153A(1) is annulled on a further appeal or any other legal proceedings, then, notwithstanding anything contained in Sec.153A(1) or section 153, the assessment or reassessment relating to any assessment order which had earlier abated under the second proviso of sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner of Income tax or Commissioner of Income tax. We are of the considered view that a revival of an assessment or reassessment ....
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.... anywhere in the aforesaid scheme, therefore, on the said basis too our aforesaid view that a processing of a 'return of income' u/s. 143(1), in the absence of any pending assessment or reassessment proceedings on the date of initiation of the search & seizure action, cannot be held to have been abated, stands fortified. 14. We further find that our aforesaid view that in a case where on the date on which Search & seizure proceedings had been initiated no assessment or reassessment is pending, then without prejudice to the fact that prior to the date of Search & seizure proceedings, the income of the assessee for the year under consideration was only processed under Sec. 143(1) and no assessment or reassessment had earlier been framed, the assessment under Sec. 153A for the said year can only be proceeded with on the basis of the incriminating material found during the course of the said Search & seizure proceedings, is squarely covered by the order of a coordinate bench of ITAT, Mumbai in the case of Anil Mahavir Gupta v. Asstt. CIT [2017] 82 taxmann.com 122 (Mum. - Trib.), wherein it was observed as under: "7.12 Before parting, we may refer to the argument set....
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....ssessment no addition in the absence of any incriminating material emerging during the course of the Search & seizure proceedings conducted u/s 132(1) can be made in the hands of an assessee, had been approved by the Hon'ble Jurisdictional High Court and the issue is no more res integra in light of the judgments delivered in the case of (i) Murli Agro Products Ltd. (supra); (ii) Continental Warehousing Corpn. (supra); and (iii) Continental Warehousing Corpn. (Nhava Sheva) Ltd. (supra). We have deliberated on the facts r.w the settled position of law and are of the considered view that as the A.O remaining within the four parameters of law had passed the assessment order u/s. 153A r.w.s 143(3), dated, 27.03.2015, therefore, the said assessment cannot be faulted with and held to be "erroneous". We thus are of the considered view that now when the assessment order passed by the A.O is not found to be "erroneous", therefore, the Principal CIT had wrongly assumed jurisdiction and revised the order in exercise of the powers vested with him u/s 263 of the 'Act'. We thus set aside the order passed by the Principal CIT under Sec. 263 of the 'Act' and restore the order pa....
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....er by wind farms and generation of power. Search and seizure action u/s. 132 of the 'Act' was carried out on 14.03.2013 at the premises of M/s. Enercon India Ltd. (EIL) and its groups companies. The assessee company being one of the group company of M/s. Enercon India Ltd. [now known as M/s. Wind World (India) Ltd.] was covered in the aforesaid search proceedings. 19. The assessee had filed its original 'return of income' for A.Y. 2011-12 on 29.09.2011, declaring an income of Rs. 8,82,69,613/- under normal provisions and 'Book profit' of Rs. 17,54,27,378/- u/s 115JB of the 'Act'. That subsequent to the aforesaid search and seizure proceedings the assessee filed its 'return of income' u/s 153A of the 'Act' on 28.02.2014, declaring an income of Rs. 8,82,69,613/- under the normal provisions and 'Book profit' of Rs. 17,54,27,378/- u/s 115JB as per the MAT provisions. The assessment in the case of the assessee was framed by the AO vide order dated 30.03.2015 passed u/s 153A r.w.s. 143(3) of the 'Act' and the income of the assessee was assessed at Rs. Nil under the normal provisions, while for the 'book profit' u/....
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....llowing of additional depreciation of Rs. 1,74,56,805/- by the A.O in the assessment order passed u/s 143(3) r.w.s. 153A had rendered the order as erroneous and prejudicial to the interest of the revenue, therefore, invoked his re visional jurisdictional u/s 263 of the 'Act'. 22. The Principal CIT vide his notice u/s 263 of the 'Act', therein called upon the assessee to show cause as to why the assessment framed u/s 153A r.w.s. 143(3) may not be revised in order to withdraw the additional depreciation of Rs. 1,74,56,805/-, which as per him was wrongly allowed by the A.O while framing the assessment. The assessee in his reply filed before the Principal CIT, taking support of various judicial pronouncements, submitted that as electric energy had all trappings of an article or thing, therefore, the process of its generation was also akin to manufacture or production of articles or things. The assessee thus tried to impress upon the Principal CIT that the wind turbine generators were used for generation of electricity, which is akin to manufacturing of an article or thing as the electricity is intangible and its effect can be seen and felt, transferred, delivered, st....
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....ile concluding as hereinabove, also took support of the Explanation 2 of Sec. 263 of the 'Act'. The Principal CIT on the basis of his aforesaid observations, holding the order passed by the A.O u/s 153A r.w.s 143(3) as erroneous to the extent prejudicial to the interest of the revenue, therefore, set aside the assessment order to the file of the A.O, with the direction to examine the claim of the assessee towards additional depreciation afresh and complete the assessment, as per law. 23. The assessee being aggrieved with the order passed by the Principal CIT under Section 263, had carried the matter in appeal before us. That the Ld. Authorized representative (for short 'A.R') for the assessee assailing the order of the Principal CIT, therein averred that as the assessee was engaged in the business of generation of electricity by harnessing wind energy and the electricity so generated was an "article or thing" within the meaning of Sec. 32(1)(iia), therefore, its claim for additional depreciation was rightly allowed by the A.O while framing the assessment. It was thus submitted by the Ld. A.R that now when the electricity generated by the assessee is an "article o....
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....nvolved in the present appeal is as to whether the assessee which is engaged in the business of generation of electricity by harnessing wind energy would be entitled to claim additional depreciation u/s 32(1)(iia) on new plant and machinery, viz. Wind Turbine Generator purchased and installed by it for generation of electricity, prior to 01.04.2013, or not. We have deliberated on the scope and gamut of Sec. 32(1)(iia) as was available on the statute prior to 01.04.2013. We find that as per the pre- amended Sec. 32(1)(iia), the additional depreciation of a further sum equal to twenty percent of the actual cost of such machinery and plant was available in the case of any new machinery or plant (other than ships and aircrafts) which had been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing. We are of the considered view that for adjudicating as to whether the assessee would be entitled to claim additional depreciation in A.Y 2011-12, our focus has to be confined to the conditions contemplated in the said statutory provision, viz. Sec. 32(1)(iia), as was available on the statute at the ....
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....nufacture and production of an article or a thing. The Assessing Officer further held that the production of electricity through windmill was not production of an article or thing. Aggrieved by the same, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who, by following the decisions of this Court in the case of CIT v. VTM Ltd. and CIT v. Hi Tech Arai Ltd., allowed the appeal. As against the same, the Revenue preferred an appeal before the Income Tax Appellate Tribunal, which dismissed the appeal following the decision of this Court in the case of CIT v. VTM Ltd. It is stated by the Tribunal that as against the said decision of this Court, the Revenue preferred an appeal before the Supreme Court and the Supreme Court dismissed the same in the SLP stage itself. Hence, the Tribunal held that no material has been brought on record to show that the said decision of this Court in the case of CIT v. VTM Ltd. has been either modified or reversed by the Supreme Court. 3. Aggrieved by the said order of the Tribunal, the Revenue is before this Court. 4. Heard learned Standing Counsel appearing for the Revenue and perused the materials ....
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....iation has to be seen in the context of generation of power through windmill only and the production of textiles and its export has nothing to do with the generation of power for the purpose of considering additional depreciation. Further as rightly held by the Tribunal, the Revenue has not brought in any new or contra material to differ from the view of this Court in the decision reported in [2010] 321 ITR 477 (Mad) (COMMISSIONER OF INCOME-TAX v. HI TECH ARAI LTD.).' In this regard it would be relevant and pertinent to point out that the Hon'ble High Court of Madras had earlier in the case of CIT v. VTM Ltd. [2009] 319 ITR 336/[2010] 187 Taxman 319, had upheld the order of the Tribunal and therein concluded that as the business of generation of electricity by wind mill amounts to production of an article or thing, therefore, the assessee would be entitled to additional depreciation u/s 32(1)(iia). The revenue being aggrieved with the order of the Hon'ble High Court had preferred a 'Special Leave Petition' (SLP), which was dismissed by the Hon'ble Apex Court. That still further the Hon'ble High Court of Madras in the case of Pr. CIT v. Kanishk Steel I....
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....g as under: "9. We have heard the submissions made by the respective parties and have also examined the judgements orders relied on by the A.R. of the assessee. A perusal of the judgements clearly show that generation of electricity is akin to manufacturing of a new product. In the instant case, electricity which may not be seen with the eyes, however, its effect can be seen and felt. The electricity can be transmitted, transferred, delivered, stored, possessed etc. The Hon'ble Supreme Court in the case of the CST v. Madhya Pradesh Electricity Board (supra) has held that electricity falls within the definition of goods under the provisions of Sale of Goods Act, 1930. The Delhi Bench of the Tribunal in the case of NTPC Ltd. (supra) after a detailed examination of several judgements, Acts, Constitution of India, has concluded that the process of generation of electricity is akin to manufacture of an article or thing. 10. In view of the above, we are of the considered opinion that generation of electricity is a manufacturing activity. The assessee is involved in the manufacturing activity and fulfills the conditions as laid down under section 32(1)(iia). The Gove....
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.... We have given a thoughtful consideration to the issue before us and are of the considered view that production of electricity by harnessing wind energy by the assessee can safely be held to be manufacturing or production of an article or thing. We though are not oblivious of the fact that the business of generation or generation and distribution of power had specifically been brought within the sweep of Sec. 32(1)(iia) w.e.f. 01.04.2013, vide the Finance Act, 2012, but then the entitlement of the assessee at the relevant point of time, viz. A.Y. 2011-12, has to be adjudicated by strictly confining ourselves to the conditions contemplated under the aforesaid statutory provisions, viz. Sec. 32(1)(iia), which as observed by us at length hereinabove, had duly been satisfied by the assessee. We are of the considered view that now when the generation of electricity by harnessing wind energy by the assessee can safely and rather inescapably be characterized as manufacturing or production of any article or thing, therefore, there is no reason for us to hold that the assessee despite having satisfied all the requisite conditions contemplated in Sec. 32(1)(iia), would however still stand di....
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....#39;. 28. We have given a thoughtful consideration to the facts of the case and after perusing the show cause notice dated 02.03.2017 issued by the Principal CIT (Page 1-2 of 'APB'), therein find ourselves to be in agreement with the contention of the Ld. A.R. that the Principal CIT had at no stage sought to revise the order passed by the A.O u/s 153A r.w.s. 143(3), for the reason that the latter had failed to verify the claim raised by the assessee in respect of initial depreciation on the fixed assets of Rs. 13,09,26,042/- and 4,36,42,014/-, which were claimed by the assessee to have been put to use on 26.03.2011 and 30.03.2011, respectively. We are of the considered view that now when the assessee had never been put to notice in respect of the revision of the order on the aforesaid ground, therefore, the latter had no occasion to put forth an explanation before the Principal CIT in context of the issue under consideration. We thus being of the considered view that a revision of an order passed by an A.O cannot be carried out in respect of an issue without putting the assessee to notice as regards the seeking of revision and affording an opportunity of being heard to h....
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....erial found during the course of search and seizure proceedings. We are of the considered view that though the fact that no assessment or reassessment proceedings were pending in the case of the assessee at the time when Search & seizure proceedings were conducted against the assessee, had been conceded by the ld. D.R before us, but then, the fact as to whether or not any incriminating material for the year under consideration, viz. A.Y. 2011-12 was found during the course of the Search & seizure proceedings, is not borne from the records. We thus in the backdrop of the aforesaid facts, are unable to persuade ourselves to accept the aforesaid contention of the assessee on the very face of it. We are of the considered view that as the order passed by the Principal CIT under section 263 of the 'Act' had already been set aside and the order passed by the A.O under Sec. 153A r.w.s 143(3) had been restored by us on merits while disposing of the Grounds of Appeal No. 1 & 2 raised by the assessee before us, therefore, in the absence of complete set of facts required for adjudicating the Ground of Appeal No. 4 raised by the assessee before us, which we are of the considered view is....
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....observed that the A.O had allowed total depreciation of Rs. 48,76,67,650/- (including additional depreciation of Rs. 8,35,66,916/- on Wind Energy Converters), as claimed by the assessee. It was observed by the Principal CIT that the assessee had made addition of "Wind Energy Converters" of a value aggregating to Rs. 48,65,32,759/- (Rs. 34,91,36,408/- + Rs. 13,73,96,351/-) which was put to use by the assessee on 03.10.2011 and 31.03.2011, respectively. That it was observed by the Principal CIT that as the additions of the respective assets was made in the second half and put to use subsequently, therefore, the assessee had failed to examine the admissibility of the claim of the assessee in respect of 100% depreciation on the said fixed assets. The Principal CIT further observed that as per the provisions of Sec. 32(1)(iia), additional deprecation @20% of actual cost of plant and machinery acquired and installed after 31.03.2005, was only allowable to an assessee who was engaged in the business of manufacture or production of any article or thing. That in the backdrop of the aforesaid observations the Principal CIT held a conviction that as per Sec. 32(1)(iia) the additional deprecia....
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....y not be held to be incorrect. The assessee in his reply, taking support of various judicial pronouncements, submitted before the Principal CIT that as electric energy has all trappings of an article or thing, therefore, the process of its generation was also akin to manufacture or production of articles or things. The assessee thus tried to impress upon the Principal CIT that as per the settled position of law the wind energy convertors were used for generation of electricity which is akin to manufacturing of a product, as the electricity is intangible and its effect can be seen and felt, transferred, delivered, stored, processed etc., therefore, the assessee was entitled towards the claim of additional depreciation in respect of the new plant and machinery purchased and installed by it for generation of electricity. It was averred by the assessee that though the amendment to include the business of generation or generation and distribution of power was applicable w.e.f. 01.04.2013, the basic concept for claim of additional depreciation remained the same, and thus now when the assessee duly satisfied all the requisite conditions entitling it to claim additional depreciation, there....
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.... issue involved in the present appeal boils down to the entitlement of the assessee which is engaged in the business of generating electricity by harnessing wind energy, in respect of additional depreciation contemplated u/s 32(1)(iia) of the 'Act'. We are of the considered view that as the said issue had already been adjudicated by us while disposing of the appeal filed by the assessee for A.Y. 2011-12, marked as ITA No. 2371/Mum/2017, wherein we had after deliberating at length on the issue under consideration in the backdrop of the judicial pronouncements of different Hon'ble Courts and coordinate benches of the Tribunal, had concluded that as the assessee who was engaged in the business of generating electricity by harnessing wind energy, duly satisfied the requisite conditions contemplated u/s 32(1)(iia) (as was then so available on the statute), was thus entitled for claim of additional depreciation under the said statutory provision. That as facts and the issue involved in the present appeal are the same as were there before us in the appeal of the assessee for A.Y. 2011-12, in ITA No. 2371/Mum/2017, therefore, our order passed in respect of the issue under consi....
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.... of search. 5. The appellant craves leave to add to, alter, amend and/or delete all or any of the foregoing grounds of appeal. The appellant prays this Hon'ble Tribunal to quash the impugned order passed by the Ld. Principal CIT by invoking the provisions of section 263 of the Income Tax Act, 1961. 41. Briefly stated, the facts of the case are that the assessee company in compliance to notice u/s 153A had filed its 'return of income' on 27.02.2014, declaring a total loss of Rs. (-) 2,82,47,480/- under the normal provisions and 'Book profit' of Rs. 18,62,53,115/- u/s 115JB as per the MAT provisions. The assessment in the case of the assessee was framed by the A.O vide order dated 24.03.2015, passed u/s 153A r.w.s. 143(3) of the 'Act', assessing the total income as declared in the return of income filed by the assessee. 42. The Principal Commissioner of Income tax, Central-2, Mumbai deliberated on the assessment records of the assessee for the year under consideration, viz. A.Y. 2011-12, and observed that the A.O had allowed total depreciation of Rs. 17,60,29,601/- on Wind Turbine Generator (including additional depreciation of Rs. 3,52,0....
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....llowed additional depreciation of Rs. 3,52,00,000/- on the "Wind Turbine Generator" while framing the assessment u/s 143(3) r.w.s. 153A. The Principal CIT thus being of the view that for the aforesaid reasons the order passed by the A.O was rendered as erroneous and prejudicial to the interest of the revenue, therefore, invoked his revisional jurisdictional u/s 263 of the 'Act'. 44. The Principal CIT vide his notice u/s 263 of the 'Act' called upon the assessee to show cause as to why the assessment framed u/s 153A r.w.s. 143(3) may not be revised in order to withdraw the additional depreciation of Rs. 3,52,00,000/- which was wrongly allowed by the A.O while framing the aforesaid assessment. The assessee in his reply, taking support of various judicial pronouncements, submitted before the Principal CIT that as electric energy had all trappings of an article or thing, therefore, the process of its generation was also akin to manufacture or production of articles or things. The assessee thus tried to impress upon the Principal CIT that as per the settled position of law, the wind turbine generator were used for generation of electricity, which is akin to manufactur....
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....153A was erroneous and prejudicial to the interest of the revenue. The Principal CIT while concluding as hereinabove, also took support of the Explanation 2 of Sec. 263 of the 'Act'. The Principal CIT on the basis of his aforesaid observations therein set aside the assessment order to the file of the A.O with the direction to examine the claim of the assessee towards additional depreciation afresh and complete the assessment, as per law. 45. The assessee being aggrieved with the order passed by the Principal CIT under Section 263, had carried the matter in appeal before us. We find that the primary issue involved in the present appeal boils down to the entitlement of the assessee which is engaged in the business of generating electricity by harnessing wind energy in respect of additional depreciation contemplated u/s 32(1)(iia) of the 'Act'. We are of the considered view that as the said issue had already been adjudicated by us while disposing of the appeal filed by the 'sister concern' of the assessee, viz. Wind World Infrastructure India Pvt. Ltd. for A.Y. 2011-12, marked as ITA No. 2371/Mum/2017, wherein we had after deliberating at length on the issue....
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....ed on the order passed by the Principal CIT and submitted that the latter had rightly revised the order passed by the AO under Sec. 153A r.w.s. 143(3) of the 'Act'. 47. We have given a thoughtful consideration to the facts of the case and after perusing the show cause notice dated 02.03.2017 issued by the Principal CIT (Page 1-2 of 'APB'), therein find ourselves to be in agreement with the contention of the Ld. A.R. that the Principal CIT had at no stage sought to revise the order passed by the A.O u/s 153A r.w.s. 143(3), for the reason that the latter had failed to verify the claim raised by the assessee in respect of initial depreciation on fixed assets of Rs. 17,60,00,000/-, in the backdrop of the period for which the said assets were put to use by the assessee during the year. We are of the considered view that now when the assessee had never been put to notice in respect of the revision of the order on the aforesaid ground, therefore, the latter had no occasion to put forth an explanation before the Principal CIT in context of the issue under consideration. We thus being of the considered view that a revision of an order passed by an A.O in respect of an iss....