2022 (8) TMI 783

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.... respect of each wind mills. In absence of which report submitted u/s 80IA(7) in form no. 10CCB cannot prepaid and relied. Hence, in absence of separate books of accounts actual profit/loss from the each windmill unit cannot be ascertained. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in allowing 80IA claim of the assessee without appreciating the fact that if all windmills were considered as one undertaking and profit & loss of all windmills are worked out after adjusting the losses from the profit of the units, then net result came to loss. Hence, no income remained for allowing the deduction u/s 80IA. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in allowing 80IA claim of the assessee without appreciating the fact that assessee company had installed 9 windmills, out of these 9 windmills in the six windmills assessee company had earned profit of Rs. 2,36,96,214/- which was claimed u/s 80IA of the Act whereas in the remaining three windmills assessee company had incurred loss to the turn of Rs. 5,95,39,450/- which was set off against the income of Hotel Business. Th....

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....25/02/2013 determining total income at Rs. 1,59,68,950/-. Subsequently, the case of assessee was reopened under Section 147 of the Act. Notice under Section 148 was issued to the assessee on 23/03/2015. In response to notice under Section 148, the assessee filed its reply dated 13/04/2015 stating that the return of income filed on 15/10/2010 be treated as return in report to notice under Section 148 of the Act. The assessee also requested for copy of reasons recorded. Copy of reasons recorded were provided to the assessee. The assessee filed objection against the reopening and notice under Section 148 of the Act. The objection of assessee was disposed of vide speaking order dated 31/08/2015. After disposing objection, the assessing officer proceeded for assessment. During the reassessment proceedings, the Assessing Officer noted that the assessee has incurred losses from the eligible business of generation of power. The assessee claimed deduction under Section 80IA(iv) of Rs. 1,06,84,759/-. The Assessing Officer was of the view that deduction under Section 80IA is allowable only when income is earned (profit is shown) from eligible business. The assessee has nine wind mills, out of....

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.... of assessee specified in Section 80IA(1). The assessee claimed deduction of profit in respect of every undertaking for a consecutive period of ten years out of the fifteen years. Section 80IA itself is clear as to the treatment of each undertaking independently and that too profit of every undertaking will have different years of relief. Thus, the approach of clubbing all the undertakings as one business is not in accordance with law. 5. The reply of assessee was considered and not accepted by the Assessing Officer. The Assessing Officer held that the assessee maintained consolidated figure of power generation units and no separate and independent books of account was maintained by the assessee for each and every wind mill, hence, the profit/loss of each wind mill cannot be ascertained from the incomplete record, therefore, deduction under Section 80IA of Rs. 1.068 crore was disallowed. 6. On appeal before the ld. CIT(A), the assessee challenged the validity of disallowance of deduction under Section 80IA only. The assessee filed detailed written submission as recorded in para 8 of order of ld. CIT(A). In the submission, the assessee furnished following details about the ins....

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....n-obstante clause also says to treat each undertaking as independent undertaking and nowhere it has been provided that profit or loss of under undertaking is to be merged or aggregated. The ld. CIT(A) specifically held that this is undisputed fact that separate accounts are maintained for each windmill undertaking. Thus, the deduction is to be computed with respect to each unit independently taking into consideration the profit of each unit without clubbing loss of others. The ld. CIT(A) by referring the decision of Hon'ble Supreme Court in the case of Synco Industries Ltd. Vs ITO (2008) 299 ITR 444 (SC) held that deduction under Chapter VIA of the Act would be available only if the computation of gross total income as per the provisions of the Act after setting of different carries forward losses and unabsorbed depreciation of earlier year is not NIL. The ld. CIT(A) also noted that after adjusting the losses of Rs. 5.953 crores of windmill units 7 to 9 against the profit of hotel, profit was Rs. 6.292 crores and profit from windmill NO. 1 to 6 was Rs. 2.369 crore and the resultant income is worked out at Rs. 2.708 crore. Against which the assessee has claimed deduction to the ....

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.... be separately considered on the basis of decision of Delhi Tribunal in DCIT Vs Eastern Medikit Ltd. 100 TTJ 383. The said decision is not applicable on the facts of the present case as in the said case, separate and independent books for each unit were maintained. The ld. Sr. DR for revenue prayed for reversing the order of ld. CIT(A) and to restore the order of the Assessing Officer. 11. On the other hand, the ld. AR of the assessee has supported the order of ld. CIT(A). The ld. AR submits that the Assessing officer had considered all nine different windmill as separate undertakings which are spread across the States of Gujarat, Rajasthan and Maharashtra. All undertakings were installed on different points of time, hence loss inter se on certain undertaking were adjusted against the profit of certain undertaking and thus, relief under Section 80IA was restricted to the extent of Rs. 1.068 crore. Before the ld. CIT(A), the assessee furnished detailed written submissions, copy of which has been placed before the Tribunal. The assessee before the ld. CIT(A) submitted that the gross total business income of assessee is positive. The profit from all windmills undertaking are includ....

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....e assessee company had incurred losses of Rs. 5.953 crores. Thus, overall effect in the eligible business loss of Rs. 3.58 crore. As the assessee has not earned any income from eligible business, therefore, not eligible for deduction under Section 80IA of the Act. The Assessing Officer held that the assessee maintained consolidated figure of power generation unit and no separate and independent books of account was maintained by the assessee for each and every wind mill, hence, the profit/loss of each wind mill cannot be ascertained from the incomplete record, therefore, deduction under Section 80IA of Rs. 1.068 crore was disallowed. We find that the ld. CIT(A) while granting relief to the assessee has held that this is an undisputed fact that separate accounts are maintained for each windmill undertaking. Thus, the deduction is to be computed with respect to each unit independently taking into consideration the profit of each unit without clubbing loss of others. The ld. CIT(A) by referring the decision of Hon'ble Supreme Court in the case of Synco Industries Ltd. Vs ITO (supra) held that deduction under Chapter VIA of the Act would be available, only if the computation of gro....