2005 (9) TMI 238

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....e assessee under s. 80-IA of the IT Act, 1961. The assessee had constructed wind mill electric generators at Pazhavoor village, Tirunelveli District in Tamil Nadu at a cost of 430.20 lakhs in the previous year 1995-96 relevant to the asst. yr. 1996-97. The generators were erected for generation of electricity through wind mill which was sold to Tamil Nadu State Electricity Board. The wind mill generators erected by the assessee-company were entitled for 100 per cent depreciation and the same was allowed for the asst. yr. 1996-97. 3. In computing the taxable income of the impugned asst. yr. 1997-98, the assessee has claimed a deduction of Rs. 35,68,790 under s. 80-IA of the IT Act on the income of the electricity generation as the plant w....

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.... for the Revenue in details. 6. A similar issue was considered by the Kerala High Court in the case of Indian Transformers Ltd. vs. CIT (1972) 86 ITR 192 (Ker). In that case, the assessee-company claimed deduction under s. 80E (now 80-I) from profits and gains attributable to specific activities like business of generation and distribution of electricity or any other form of power of construction, manufacture or production of anyone or more of the articles or things specified in the list in Fifth Schedule. While considering the said claim of the assessee, the Court held that the deduction called for by the assessee was a special benefit given to an assessee which satisfied the conditions laid down and the deduction is only from the profi....

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.... depreciation on wind mills, the same was claimed but the profit of the wind mill project by itself was not sufficient to absorb the entire depreciation claimed by the assessee. But the depreciation not so absorbed exclusively by the profit of the wind mill project was concurrently absorbed by the profits of the assessee from other business also. So while computing the income for the immediately preceding asst. yr. 1996-97, the 100 per cent depreciation claimed by the assessee-company on wind mills has been de facto absorbed and exhausted. Therefore, there remains nothing to be further carried forward to the impugned asst. yr. 1997-98. In such circumstances, the AO is not justified in again making a notional concept of unabsorbed depreciati....