2025 (8) TMI 949

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....CIT(A) erred in allowing the claim u/s.80IA of the IT without appreciating that the power distribution is not the main business of the assessee and hence the conditions for claiming of deduction u/s.80IA have not been met? 2. Whether on the facts and in the circumstances of the case and in law, the LD.CIT(A) erred in ignoring the ratio of Supreme Court judgements in in the case of Sterling Foods 237 ITR 53(SC) and in the case of Cambay Electrical Supply Company Ltd. 113 ITR 84 wherein it is held that the income incidental to the main business of the assessee and there is no direct nexus between the income and the industrial undertaking is not direct but incidental only? 3. Whether on the facts and in the circumstances of the case and ....

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....further submitted that the generation and sale of power through Windmill is a separate undertaking eligible for deduction under section 80IA and the deduction is claimed accordingly. The AO held that the assessee is in the business of manufacturing of fertilizers, chemicals, paints and therefore the Windmill installed by the assessee to be used for its own business is incidental to the main business of the assessee. The AO further held that there is no nexus between the main business of the assessee and the generation of power through Windmill. The AO accordingly held that the assessee is not entitled to the deduction under section 80IA by placing reliance on the decision of the Hon'ble Supreme Court in the case of Sterling Foods [237 I....

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....ling Foods and in the case of Cambay Electrical Supply Company Ltd., wherein it is held that to qualify for a deduction, the income has to be directly relatable to the industrial undertaking of the assessee and not incidental. The assessee is in the primary business of making edible acids and other chemicals. However, the windmills operation is a separate industrial undertaking, which started operating on 27/12/2007. In this case, the windmills operations itself, is an industrial undertaking of the assessee and it works as a profit centre for the assessee. The income of the unit is included in the P/L account of the assessee and therefore, it cannot be held that the income of the industrial undertaking, being the windmills, is a mere incide....