DCIT, Pune V. L B Kunjir, Pune

ITA 1088/PUN/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5989 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-06-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 16-05-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Depreciation; Source of fund; Deemed to accrue or arise in india; Corroborative evidences; Set aside
• Section: 32; 68; 69; 69C; 11; 133A; 69B; 80IA; 69A; 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER ITA Nos.417 & 418/PUN/2024 Assessment Years : 2015-16 & 2016-17 M/s. L.B. Kunjir S.No.52/1, Swanand Building, Shriram Co-op. Hsg. Society, Kharadi, Pune – 411014 Vs. DCIT, Circle 7, Pune PAN : AABFL9816E (Appellant) (Respondent) ITA Nos.1046 & 1088/PUN/2024 Assessment Years : 2015-16 & 2016-17 DCIT, Circle 7, Pune Vs. M/s. L.B. Kunjir S.No.52/1, Swanand Building, Shriram Co-op. Hsg. Society, Kharadi, Pune – 411014 PAN : AABFL9816E (Appellant) (Respondent) ITA No.240/PUN/2024 Assessment Year : 2017-18 DCIT, Circle 7, Pune Vs. M/s. L.B. Kunjir S.No.52/1, Swanand Building, Shriram Co-op. Hsg. Society, Kharadi, Pune – 411014 PAN : AABFL9816E (Appellant) (Respondent) Assessee by : Shri Nikhil Pathak Department by : Shri Ramnath P Murkunde Date of hearing : 01-07-2024 Date of pronouncement : 05-07-2024 2 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 O R D E R PER R. K. PANDA, VP : ITA Nos.417/PUN/2024 & 418/PUN/2024 and 1046/PUN/2024 & 1088/PUN/2024 are cross appeals, the first two appeals filed by the assessee and the second two appeals filed by the Revenue are directed against the common order dated 01.02.2024 of the Ld. CIT(A), Pune-11, relating to assessment years 2015-16 and 2016-17, respectively. ITA No.240/PUN/2024 filed by the Revenue is directed against the order dated 01.11.2023 of CIT(A) / NFAC relating to assessment year 2017-18. For the sake of convenience, all these appeals were heard together and are being disposed off by this common order. ITA No.417/PUN/2024 (by the assessee for A.Y. 2015-16) 2. Facts of the case in brief, are that the assessee is a partnership firm engaged in the business of civil construction and power generation. It filed its return of income on 10.09.2015 declaring total income of Rs.3,54,87,490/- after claiming deduction of Rs.2,84,42,603/- u/s 80IA(4) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟). A survey u/s 133A of the Act was conducted in the case of the assessee on 17.12.2014, during which certain papers were impounded which indicated that the actual work in progress was much higher than the work in progress shown in the books. Accordingly, the assessee had declared additional income of Rs.3,11,76,525/- for the year under consideration. 3 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 3. During the course of assessment proceedings, the Assessing Officer noted that while the assessee has declared the additional income in the hands of the firm, however, the assessee has included the same in the closing stock as on 31.03.2015. The Assessing Officer, therefore, asked the assessee to explain as to why the excess stock of Rs.3,11,76,525/- disclosed during survey as additional income should not be added u/s 69B of the Act as unexplained investment as the same was unaccounted. The assessee submitted that during the course of survey, neither any instance of actual unaccounted entries concerning the stock was noticed by the survey party nor any unaccounted bills were detected during the survey proceedings. Whatever declaration was made was from the scratch details of stock available from the stock registers of the assessee and such statements were drawn purely on notional basis, rough estimation of available quantity of stock. It was submitted that since the assessee himself had offered the estimated excess stock as additional income for the financial year 2014-15 relevant to assessment year 2015- 16 on its own, therefore, addition should not be made u/s 69B of the Act. It was further submitted that while section 69A of the Act provides for no relief on account of addition made under that section towards excess cash, jewellery or valuable article, etc., the provisions of section 69B do not put forth any such restrictions. 4. However, the explanation offered by the assessee was not accepted by the Assessing Officer. He referred to the provisions of section 115BBE of the Act, according to which no deduction is allowable against the deemed income taxable 4 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 under sections 69 to 69D of the Act. He, therefore, held that the unexplained investments offered u/s 69B of the Act at Rs.3,11,76,525/- would not be available as opening stock in the subsequent assessment year. He, therefore, made addition of Rs.3,11,76,525/- by holding that the excess work in progress offered to tax in assessment year 2015-16 cannot be claimed as part of work in progress for assessment year 2016-17 by recording as under: “5.4 It is undisputed that excess stock of Rs.3,11,76,525/- is not accounted for in regular books of account. There was a difference of closing stock as per books of account (Rs.13,60,87,000/-) and as per the stock statement (Rs.16,72,63,525) impounded during the survey of Rs.3,11.76,525/-. This fact has been accepted by the Partner of the firm in the statement. Actual Closing stock is more than the closing stock as per books and hence provisions of section 69B are dearly applicable in this case. Excess stock of Rs.3,11,76,525/- represents assessee‟s unexplained investment as per provisions of section 69B. 5.5 Assessee has only contended that declaration was made voluntarily to buy peace of mind and no actual unaccounted entries were noticed during the survey. The contention of the assessee is not acceptable because as already discussed there was difference in stock as per books of account and actual stock statement file impounded during the survey. This discrepancy/difference has been accepted by the Partner in his statement recorded during the survey and it was stated that difference is due to purchase which are not accounted for in books of account. 5.6 In view of the above excess stock of Rs.3,11,76,525/- is added u/s 69B as unexplained investment. This discrepancy would not have come to notice without survey u/s 133A of the Income Tax Act, 1961 in the case of assessee. Penalty proceedings are initiated separately u/s 271(1)( c) of the IT Act, 1961 for concealment of income. 5.7 In respect of income of assessed u/s 68/69/69A/69B/69C/69D of the I.T Act 1961 it has now been established by law that tax on such income should be charged at rate of 30% over and above regular income of assessee. It has been established that deduction/exemption / set off of losses cannot be claimed / adjusted against income assesses u/s 68/ 69 to 69D of the Act. Will and mandate of legislature is dearly evident from the incorporation of new section 115 BBE of the I.T. Act, 1961 w.e.f. 01.04.2013 wherein Act states as under- “115BBE (1) where the total income of an assessee includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, the income-tax payable shall be the aggregate of— 5 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 (a) the amount of income-tax calculated on the income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent; and (b) The amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a). (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) or sub-section (1). As per section 115BBE no deduction is allowed against deemed income added u/s 68 and 69 to 69D. In this case excess stock of Rs.3,11.76,525/- has been added as unexplained investment u/s 69B and hence it will not form part of dosing stock as on 31.1.15 and its benefit will not be available as opening stock for A.Y. 2015- 16.” 5. In appeal, the CIT(A) upheld the action of the Assessing Officer by observing as under: “19. It can be seen from the above judicial precedents that whether the undisclosed income found during the search or survey action is taxable under any of the five heads of income as specified in section 14 of the Act or it is to be taxed as 'deemed income taxable under section 68 to 69D of the Act', is essentially a question of fact and it entirely depends on whether the assessee has been able to satisfactorily explain the source of such undisclosed income or not. If, a satisfactory explanation is provided about the nature and the source, in that case the source would stand explained and therefore, the income would be computed under the appropriate head of income as per the provisions of the Act. However, when no source is explained based on which the income can be classified under any of the heads of income specified under section 14, then it would be classified as deemed income and shall be taxed as per the rates provided under section 115BBE of the Act. 20. It is also important to mention here that the Hon'ble Supreme Court in case of Kale Khan Mohammad Hanif vs CIT [1963] 50 ITR 1 (SC) held that onus of proving the source of a sum of money found to have been received by the assessee is on him. However, if the taxpayer disputes the levy of tax on the same then it is up to him to show either the receipt is not income, or it is exempt from taxation under the provisions of the Act. In the absence of proof, the tax officer is entitled to treat the same as taxable income. Thus, the onus of explaining the source of undisclosed income found during search or survey is on the assessee and not the other way. In other way, the onus of proving that the income detected is not 6 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 taxable under sections 68, 69, 69A to 69D read with section 115BBE is on the assessee. 21. To sum up, before assessing the surrendered income under sections 68, 69, 69A to 69D and levy of higher rate of tax u/s 115BBE, following factors are required to be considered-  Whether nature of income is clearly explained during the survey or during assessment proceedings.  Whether income can be classified under a particular head of income based on nature so as to demonstrate that it is flowing from one of the specific sources of income of the assessee.  Whether supporting evidences for the above are available because the onus to satisfactorily explain the nature and source is on the assessee. 22. In the present case, an additional income of Rs.3,11,76,525/- was declared during the survey operation. The claim of the appellant is that the said income was earned from the business conducted by it and the said income was declared accordingly. It is, however, seen that the manner in which the said income was earned from business activities has not been explained by the appellant. It is not a claim of the appellant that it received some unaccounted business receipts. Neither, the appellant has not pointed out towards any other evidence found during the survey operation which could indicate that such unexplained investment in stock was out of undisclosed business income. 23. As discussed earlier in this order, the onus of explaining the specific source from which such unexplained income is flowing, is on the assessee and not on the department. In the present case, the appellant has miserably failed to discharge the said onus. The contention of the appellant is that the unexplained investment in stock, should be taxed as business income even without explaining the manner in which such business income was earned. Acceptance of such contention may lead to a situation where a tax payer having undisclosed income from a source other than from business or profession, can invest such income in the business and can subsequently claim that the same is taxable at normal rate, being his business income. This situation is clearly against the intentions of legislature wherein the legislature has mandated that such undisclosed income should be taxed at special rates provided u/s 115BBE of the Act. 24. In the present case, since the nature of additional income is not clearly explained during the survey nor during assessment proceedings and the appellant has not demonstrated that the said income is flowing from business, with the help of supporting evidences, therefore, the action of the assessing officer of treating the income corresponding to investment in excess stock, as deemed income u/s 69B of the Act is upheld. The ground raised by the appellant is DISMISSED. 25. The appellant has further contended that since the excess stock was found during the survey and it has paid taxes on such additional income, the excess stock should obviously be considered as part of closing WIP. I have considered this contention of the appellant If the claim of the appellant is accepted in that 7 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 situation, the appellant will be claiming deduction of Rs.3,11,76,525/- in subsequent assessment years which shall be in contradiction to the provisions of section 115BBE(2) of the Act. The provisions of section 115BBE(2) are quite clear that no deduction is allowed against deemed income added u/s 68 and 69 to 69D. Since, I have already upheld that the additional income corresponding to excess stock is taxable u/s 69B of the Act, therefore, as per provisions of section 115BBE(2), no deduction for this amount can be allowed to the appellant in any assessment year. Accordingly, the contention raised by the appellant is rejected. The grounds no. 8 and 9 raised by the appellant are DISMISSED.” 6. Aggrieved with such order of CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: 1] The learned CIT(A) erred in holding that the additional income of Rs.3,11,76,525/- which was declared in the course of survey u/s 133A is taxable u/s 69B of the Act and in view of provisions of section 115BBE(2), no deduction of the said amount can be allowed to the assessee in any of the asst. year. 2] The learned CIT(A) erred in holding that the excess work in progress of Rs.3,11,76,525/- declared during the course of survey proceedings and which has been taxed u/s 69B of the Act would not form part of closing work in progress as on 31.03.2015 and the same would not be available as an opening work in progress as on 01.04.2015. 3] The learned CIT(A) erred in holding that me claim of the assessee for treating the excess WIP as part of closing WIP would result in the assessee claiming the deduction in the subsequent year which was in contradiction to the provisions of section 115BBE(2) and hence, no deduction was available to the assessee against the said excess work in progress declared at the time of survey. 4] The learned CIT(A) erred in not appreciating that the excess WIP declared during the year would form part of closing WIP and logically would form part of the opening WIP of the subsequent year and hence, the same could be claimed in the subsequent year. 5] The learned CIT(A) failed to appreciate that there was no bar in the provisions of section 115BBE(2) to consider the excess WIP taxed u/s 69B as part of the closing WIP and the same could form part of opening WIP of the subsequent year and the assessee was justified claiming deduction of the same in the subsequent year. 8 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 7. The Ld. Counsel for the assessee submitted that the excess work in progress which was detected in the course of survey action on the basis of documents impounded was accepted by the assessee in the course of survey and has offered the excess stock to tax in assessment year 2015-16 and no deduction was claimed against such excess stock offered to tax in assessment year 2015-16. He submitted that section 115BBE of the Act, as prevalent in those years provides that the deemed income taxable u/s 69 to 69D of the Act would be taxed @ 30%. It further states that no deduction would be allowed on account of expenditure or allowance against the deemed income which is being offered to tax. Referring to the provisions of sections 69 to 69D of the Act, the Ld. Counsel for the assessee submitted that as per the said sections, while computing the deemed income, no deduction for expenditure or allowance is allowable. The Ld. Counsel for the assessee submitted that it has claimed the excess stock offered to tax as part of the closing stock which is being claimed as an opening stock of the subsequent assessment year i.e. 2016-17 and therefore, the same would be allowed as deduction while computing the income for the succeeding assessment year. He submitted that there is no prohibition in section 115BBE of the Act that the excess stock offered to tax cannot be part of closing stock. 8. Referring to CBDT Circular No.11/2019 dated 19.06.2019, he submitted that there was an amendment to sub-section (2) of section 115BBE of the Act from assessment year 2017-18 wherein the set off of losses was also prohibited against the deemed income taxed u/s 69 to 69D of the Act. Therefore, the CBDT issued 9 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 circular holding that the set off of losses is prohibited from assessment year 2017- 18 onwards. He submitted that as per the circular, what is prohibited under sub- section (2) is set off of any expenditure or allowance or loss against the deemed income. Since the assessee in the instant case has not claimed any deduction or expenditure or allowance against the income offered u/s 69B of the Act, therefore, the addition made by the Assessing Officer is not correct. He submitted that since the assessee has paid the taxes on the deemed income and has not claimed any deduction against the said income, therefore, there is no reason for denial of carry forward of closing stock. He accordingly, submitted that the order of Ld. CIT(A) be set aside and the grounds raised by the assessee on this issue be allowed. He also relied on various decisions. 9. The Ld. DR on the other hand heavily relied on the orders of CIT(A) and the Assessing Officer. 10. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has offered additional income of Rs.3,11,76,525/- as excess work in progress on the basis of certain documents impounded during the course of survey. We find the assessee while offering the above amount to tax has claimed the same as part of closing work in progress which was denied by the Assessing Officer to be considered as part of the closing 10 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 stock, the relevant portion of which is already reproduced in the preceding paragraphs. We find the Ld. CIT(A) also upheld the action of the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the assessee has not claimed any deduction or expenditure or allowance out of the additional income declared at Rs.3,11,76,525/- and there is also no evidence found during the course of survey regarding any unexplained expenditure or any bills, etc. not entered in the books. The declaration was made only on the basis of whatever stock available at the time of survey. It is also his submission that as per CBDT Circular No.11/2019, since the term “set off of losses” was specifically inserted by the Finance Act, 2016 w.e.f. 01.04.2017, therefore the assessee is entitled to claim set off of losses against the income determined u/s 115BBE of the Act for the assessment year 2016-17. 11. We find some force in the above arguments of the Ld. Counsel for the assessee. It is an admitted fact that during the course of survey the department impounded certain papers which indicated that the actual work in progress was much higher than the work in progress shown in the books. In the statement of Shri L.B. Kunjir, he accepted that there was excess work in progress to the tune of Rs.3,11,76,525/- which was offered for taxation and the same was included in the closing stock as on 31.03.2015 which has been claimed as opening stock as on 01.04.2015 i.e. for assessment year 2016-17. The assessee has not claimed any 11 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 deduction, expenditure or allowance out of such additional income declared during the course of search which was declared on the basis of survey. 12. We find provisions of sections 69B and 69C read as under: “69B. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year. Unexplained expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year : Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.” 13. A perusal of the above shows that the wordings of the proviso to section 69C are missing in provisions of section 69B. 14. Further, we find CBDT‟s Circular No.11/2019 dated 19.06.2019 reads as under: “SECTION 71, READ WITH SECTION 115BBE. OF THE INCOME-TAX ACT, 1961 - LOSSES - SET OFF OF FROM ONE HEAD AGAINST INCOME FROM AN OTHER - CLARIFICATION REGARDING NON-ALLOWABILITY OF SETOFF OF LOSSES AGAINST THE DEEMED INCOME UNDER SECTION 12 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 115BBE OF THE INCOME TAX ACT, 1961 PRIOR TO ASSESSMENT YEAR 2017-18 CIRCULAR NO. 11/2019 [F.N0.225/45/2019-ITA.II], DATED 19-6- 2019With effect from 1-4-2017, sub-section (2) of section 115BBE of the Income- tax Act, 1961 (Act) provides that where total income of an assessee includes any income referred to in section(s) 68/69/69A/69B/69C/69D of the Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under any provisions of the Act in computing the income referred to in section 115BBE(1) of the Act. 2. In this regard, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that in assessments prior to assessment year 2017-18, while some of the Assessing Officers have allowed set off of losses against the additions made by them under section(s) 68/69/69A/69B/69C/69D, in some cases, set off of losses against the additions made under section 115BBE(1) of the Act have not been allowed. As the amendment inserting the words 'or set off of any loss is applicable with effect from 1 st of April, 2017 and applies from assessment year 2017-18 onwards, conflicting views have been taken by the Assessing Officers in assessments for years prior to assessment year 2017-18. The matter has been referred to the Board so that a consistent approach is adopted by the Assessing Officers while applying provision of section 115BBE in assessments for period prior to the assessment year 2017-18. 3. The Board has examined the matter. The Circular No. 3/2017 of the Board dated 20th January, 2017 which contains Explanatory notes to the provisions of the Finance Act, 2016, at para 46.2, regarding amendment made in section 115BBE(2) of the Act mentions that currently there is uncertainty on the issue of set-off of losses against income referred to in section 115BBE. It also further mentions that the pre-amended provision of section 115BBE of the Act did not convey the intention that losses shall not be allowed to be set off against income referred to in section 115BBE of the Act and hence, the amendment was made vide the Finance Act, 2016. 4. Thus keeping the legislative intent behind amendment in section 115BBE(2) vide the Finance Act, 2016 to remove any ambiguity of interpretation, the Board is of the view that since the term 'or set off of any loss' was specifically inserted only vide the Finance Act 2016, w.e.f. 1-4-2017, an assessee is entitled to claim set-off of loss against income determined under section 115BBE of the Act till the assessment year 2016-17. 5. The contents of this Circular may be circulated widely for information of all stakeholders and departmental officers. The pending assessments and litigations on this issue may be handled accordingly.” 15. We find merit in the arguments of the Ld. Counsel for the assessee that although as per proviso to section 69C of the Act such unexplained expenditure 13 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 which shall be deemed to be the income of the assessee was not to be allowed as deduction under any head of the income, however such type of wording is not available in the provisions of section 69B of the Act. Since the assessee in the instant case has declared the additional income on the basis of impounded documents showing higher calculation of work in progress and there is no evidence on record that the assessee has incurred any such expenditure which has not been recorded in the books of account and since the assessee has not claimed any deduction of expenditure or allowance against the income offered u/s 69B of the Act and has paid the tax on the deemed income, therefore, we are of the considered opinion that the income so declared as additional work in progress will form part of the closing work in progress and cannot be taxed u/s 115BBE of the Act. We hold and direct accordingly. The grounds raised by the assessee on this issue are accordingly allowed. ITA No.418/PUN/2024 (A.Y. 2016-17) 16. The assessee has raised the following grounds: 1] The learned CIT(A) erred in confirming the addition of Rs.3,11,76,525/- made by the learned A.O. by reducing the said amount from the opening WIP claimed by the assessee. 2] The learned CIT(A) erred in holding that the excess stock found during the course of survey was taxable u/s 69B and as per the provisions of section 115BBE(2) no deduction of the same could be allowed to the assessee. 3] The learned CIT(A) failed to appreciate that there was no bar in section 115BBE to allow deduction of the excess WIP declared in the course of survey in the earlier year and the assessee could claim the same as part of opening WIP for the year under consideration and accordingly, the assessee was entitled to claim deduction of Rs.3,11,76,525/- while computing the income for the year under consideration. 14 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 4] The learned CIT(A) failed to appreciate that the excess WIP declared by the assessee in A. Y. 2015 - 16 would form part of the closing WIP for A.Y. 2015 - 16 and as a natural consequence would be also part of opening WIP for A.Y. 2016 - 17 and accordingly, the assessee was justified in claiming the same as a deduction while computing the income for A.Y. 2016-17. 17. The only grievance of the assessee in the grounds raised is regarding the order of the Assessing Officer in not considering the closing work in progress of Rs.3,11,76,525/- as on 31.03.2015 as the opening work in progress as on 01.04.2015 i.e. assessment year 2016-17. Since while deciding the appeal of the assessee for assessment year 2015-16 vide ITA No.417/PUN/2024, we have already held that the additional income so declared during the course of survey shall form part of the closing stock, therefore, such closing stock as on 31.03.2015 shall be the opening stock of assessment year 2016-17. Therefore, the assessee is justified in claiming the same as deduction while computing the income for the assessment year 2016-17. We hold and direct accordingly. The grounds raised by the assessee on this issue are accordingly allowed. ITA No.1046/PUN/2024 (by Revenue for A.Y. 2015-16) 18. Facts of the case in brief, are that the assessee firm is engaged in the business of wind power generation. It has purchased windmill in the earlier years at different locations and claimed deduction u/s 80IA of the Act in respect of the profits derived through the windmills. The Assessing Officer during the course of assessment proceedings noted that the assessee has claimed deduction u/s 80IA of 15 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 the Act amounting to Rs.2,84,42,603/- on account of wind power generation, the details of which are as under: Sr. No Address of the site / Undertaking Date of commencement of operation Income from operation claim of deduction u/s 80IA(4) Initial Assessment year from when deduction is being claimed 1 J-45 Rajasthan 31/03/2004 1141726/- A.Y.2011-12 2 K-97 Dhulia 20/09/2005 5335789/- A.Y.2011-12 3 K-414 Nandurbar 06/03/2006 4713155/- A.Y.2011-12 4 AD-27 Sinnar 30/03/2009 10574871 A.Y.2013-14 5 GP-44 Sangli 31/03/2012 2976463/- A.Y.2015-16 6 GP-45 Sangli 21/03/2012 3700598/- A.Y.2015-16 Total 2,84,42,603/- 19. He further noted that the above claim is supported by an Audit report from the Chartered Accountant. He, therefore, asked the assessee to justify the claim of deduction made u/s 80IA(4) of the Act. Rejecting the various explanations given by the assessee and holding that the various decisions relied on by the assessee have not been accepted by the Revenue and has been challenged before the Hon‟ble High Court, the Assessing Officer rejected the claim of deduction u/s 80IA(4) of the Act. 20. In appeal, the CIT(A) allowed the claim of the assessee by observing as under: “7. In brief, as per the assessing officer, there is no mandate u/s. 80IA to treat each wind mill project as 'separate undertaking' of the Assessee and that the Section envisages only two classifications of business i.e. 'eligible business' and 'non-eligible business'. The Assessing Officer therefore, held that the request of the Assessee to treat each Wind Mill project as 'separate undertaking' and thereby allow the claim of deduction u/s. 80IA(4) of the I.T. Act, is untenable. As per assessing officer, the deduction u/s 80IA(4) has to be necessarily computed by considering all Wind Mills of the Assessee as a „single unified project which constitutes „eligible business‟. The Assessing Officer observed that after 16 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 considering the losses of power generation business in earlier years, there was an overall loss in Power Generation Business, and he therefore, rejected the claim of the Assessee for deduction u/s.80IA(4)of the I.T.Act. 8. On the other hand, the appellant has claimed that all the undertakings have been set up at different locations and they function independently from each other. Regarding the issue of notionally carry forwarding the losses of earlier years, the assessee has claimed that the initial asst. year is the year in which the deduction is first claimed by the assessee, as clarified by CBDT vide Circular No. 1 of 2016 dated 15/02/2016. Thus, the unabsorbed losses and depreciation of each windmill which has already been set off against other business income of the assessee, cannot be notionally brought forward, as done by the assessing officer. The appellant has claimed that similar disallowance was made by the learned A.O. in the earlier years but the said action of the assessing officer has not been upheld at the level of CIT(A) or ITAT. It is also been submitted that in identical facts, the National Faceless Appeal Centre (NFAC) has also allowed the appellant's claim of 80IA for AY 2020-21 vide order dated 21.09.2023. 9. It is seen that the assessing officer has not disputed that the above- mentioned wind-mills are otherwise eligible for deduction u/s 80IA(4) of the Act. The reason for disallowing the claim is that as per assessing officer, all the above- mentioned units should be aggregated and considered as a 'single eligible business'. The issue as to whether each windmill is required to be treated as 'separate undertaking' or all the windmills should be aggregated has been examined by the Hon'ble ITAT, Pune on various occasions. Some of these decisions are as under: 9.1 In the case of M/s J-Sons Foundry Pvt Ltd in ITA No. 1600/PUN/2011 for A.Y. 2008-09, the Hon'ble Tribunal held that each windmill should be considered as separate undertaking eligible for deduction u/s 80IA and the deduction should be computed independently for each unit and not on consolidated basis. The relevant portion of this decision is as under: - 15. Against the decision of the Ld. CIT(A), the Revenue is in appeal before us. We have heard the rival submissions of the parties and perused the record. Admittedly, the assessee is power general through the wind mills at 3 different locations i.e. in Tamilnadu, Panchgani and Satara. The wind mills are commissioned and erected in different assessment years as noted by the authorities below. Assessee is maintaining separate books of accounts in respect of 3 wind mills and working out the profit or tosses. Though the first wind mill was erected and commissioned in the A.Y. 2002- 03, there were consistent losses up to the A.Y. 2007-08 and assessee did not opt for claiming the deduction u/s 80IA(2) of the Act. So far as A.Y. 2008- 09 is concerned, assessee opted for claiming the deduction u/s 80IA(2) treating the said assessment year (A.Y.) as an initial assessment year as there was the profit in Satara wind mill but losses in the Tamil Nadu wind mill and Panchgani wind mill. If we look at the scheme of the section 80IA(2), it speaks about the "undertaking" or "enterprise" and not the business of the assessee. Admittedly, three wind mills at the 3 locations are 17 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 independently operated and the financial results are separately worked out. As per sub-sec.(5) of section 80IA, for computing the deduction u/s 80IA(2), the eligible business is to be treated as the only source of income. Sub- sec.(5) of section 80IA has been explained by the Hon'ble High Court and Kerala in the case of CIT Vs. Accel Transmatic Systems Ltd. 230 CTR 206 (Ker) which has been followed by the Ld. CIT(A). The term "business" used in sub-sec. (5) section 80IA in our humble opinion is confined to the independent undertaking and cannot get merged with the other businesses. In Sec. 80IA(2), for claiming deduction "undertaking" or "Enterprise" as such is to be considered. Sec.80IA(2) is charging sections for determining basic eligibility and there is no mention of word "business". Sub-sec.(5) of Sec. 80IA speaks of business but same is to be construed as business of "undertaking" or "Enterprise" as referred to in Sub sec.(2) of Sec. 80IA. It is well settled principle of interpretation of statutory provision that they are to be interpreted harmoniously to make workable to give intended results. Hence, as rightly held by Ld. CIT(A) term "business" used in sec.801A(5) is to be construed and understood to mean "business" or "undertaking or enterprise". In our opinion, the Ld. CIT(A) in his well-reasoned order has rightly held that every unit constitute a separate undertaking engaged in the eligible business and losses from one unit cannot be set off against the profits. Another unit engaged in the same business for the purpose of computing the deduction u/s 80IA. We find no reason to interfere with the findings of the Ld. CIT(A) on this issue. Accordingly, the same are confirmed and grounds taken by the revenue are dismissed. 9.2 An identical issue was involved in the case of D.J. Malpani vs ACIT in ITA Nos 1148 to 1154/PN/2013 for AYs. 2004-05 to 2010-11 wherein following the decision in the case of J-Sons Foundry (supra), the Hon'ble Tribunal held that the deduction should be computed independently for each unit and not on consolidated basis. The relevant portion of this decision is as under: 57. After hearing both the sides, we find the Coordinate Bench of the Tribunal m the case of J-Sons Foundry Pvt. Ltd. (Supra) while dismissing the grounds raised by the Revenue on this issue has observed as under: "15. Against the decision of the Ld. CIT(A), the Revenue is in appeal before us. We have heard the rival submissions of the parties and perused the record. Admittedly, the assessee is power general through the wind mills at 3 different locations i.e. in Tamilnadu, Panchgani and Satara. The wind mills are commissioned and erected in different assessment years as noted by the authorities below. Assessee is maintaining separate books of accounts in respect of 3 wind mills and working out the profit or losses. Though the first wind mill was erected and commissioned in the A, Y. 2002-03, there were consistent losses up to the A.Y. 2007-08 and assessee did not opt for claiming the deduction u/s 80IA(2) of the Act. So far as A.Y. 2008-09 is concerned, assessee opted for claiming the deduction u/s 80IA(2) treating the said assessment year (A.Y.) as an initial assessment year as there was the profit in Satara wind mill but 18 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 losses in the Tamil Nadu wind mill and Panchgani wind mill. If we look at the scheme of the section 80IA(2), it speaks about the "undertaking" or "enterprise" and not the business of the assessee. Admittedly, three wind mills at the 3 locations are independently operated and the financial results are separately worked out. As per sub-sec.(5) of section 80IA, for computing the deduction u/s 80IA(2), the eligible business is to be treated as the only source of income. Sub-sec. (5) of section 80IA has been explained by the Hon'ble High Court and Kerata in the case of CIT Vs. Accel Transmatic Systems Ltd. 230 CTR 206 (Ker) which has been followed by the Ld. CIT(A). The term "business" used In sub-sec.(5) section 80IA in our humble opinion is confined to the independent undertaking and cannot get merged with the other businesses. In Sec. 80IA(2), for claiming deduction "undertaking" or "Enterprise" as such is to be considered. Sec.801A(2) is charging sections for determining basic eligibility and there is no mention of word "business". Sub-sec.(5) of Sec. 801A speaks of business but same is to be construed as business of "undertaking" or "Enterprise" as referred to in Sub-sec.(2) of Sec.80IA. It is well settled principle of interpretation of statutory provision that they are to be interpreted harmoniously to make workable to give Intended results. Hence, as rightly held by Ld. CIT(A) term "business" used in sec.80IA(5) is to be construed and understood to mean "business" or "undertaking or enterprise". In our opinion, the Ld.CIT(A) in his well reasoned order has rightly held that every unit constitute a separate undertaking engaged in the eligible business and losses from one unit cannot be set off against the profits. Another unit engaged in the same business for the purpose of computing the deduction u/s.80IA. We find no reason to interfere with the findings of the Ld.CIT(A) on this issue. Accordingly, the same are confirmed and grounds taken by the Revenue are dismissed." 58. Respectfully following the decision of the Coordinate Bench of the Tribunal cited (Supra) and in absence of any contrary material brought to our notice we hold that each phase of windmill has to be considered as separate undertaking eligible for deduction u/s.80IA and therefore deduction u/s.80IA(4) should have been computed independently for each phase and not on consolidated basis. The grounds raised by the assessee on this issue is accordingly allowed. 9.3 The above decision has been followed by the Hon'ble ITAT, Pune while deciding appeals in the case of M/s D.J. Malpani for subsequent assessment years i.e. A.Ys. 2011-12 & 2012-13 in ITA No. 1467 & 1468/PUN/2015 dated 16.10.2017 and for A.Y. 2013-14 in ITA No. 1374/PUN/2017 dated 01/08/2019. 9.4 In the appellant's own case for A.Y. 2012-13 to 2014-15 in ITA No.76/PUN/2019, ITA No. 2614/PUN/2017 and ITA No. 07/PUN/2018, the Hon'ble ITAT has allowed the claim of the appellant by observing as under:- 19 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 7. The assessee has claimed deduction u/s. 80IA(4) separately for each unit of windmill. It is an undisputed fact that the date of commencement of operation of each windmill is different. The stand of the Revenue is that instead of claiming deduction u/s. 801A(4) on each windmill as separate unit, the assessee should have computed deduction on all the windmills as single undertaking. We find that the issue whether deduction u/s. 80IA(4) is to be computed on each windmill unit separately or on consolidated basis was considered by the Co-ordinate Bench in the case of M/s. D.J. Malpani Vs. ACIT (supra). The Tribunal after considering the earlier decision rendered in the case of Dy. Commissioner of Income Tax Vs. J-Sons Foundry Pvt. Ltd. (supra) concluded as under: "58. Respectfully following the decision of the Coordinate Bench of the Tribunal cited (Supra) and in absence of any contrary material brought to our notice we hold that each phase of windmill has to be considered as separate undertaking eligible for deduction u/s. 80IA and therefore deduction u/s.80IA(4) should have been computed independently for each phase and not on consolidated basis. The grounds raised by the assessee on this issue is accordingly allowed." 8. Since, the issue has already been considered by the Tribunal and has held that each unit of windmill has to be considered separately for computing deduction u/s.80IA(4), we see no reason to deviate from the view already taken. No contrary judgment has been placed on record before us by the Revenue. The Id. DR has pointed that the Department has fifed appeal against the Tribunal's decision in the case of M/s. D.J. Malpani Vs. ACIT (supra), however, no order by the Hon'ble High Court either staying or reversing the aforesaid decision of Tribunal has been furnished by the Id. DR. 9. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in allowing assessee's claim of deduction u/s. 80IA(4) considering each windmill as separate unit for allowing deduction u/s. 80IA(4) of the Act. Hence, the impugned order is upheld and the appeal of Revenue is dismissed. 9.5 Thus, the jurisdictional Tribunal has consistently held that the deduction u/s 80IA should be computed independently for each unit and not on consolidated basis. 10.1 The Hon'ble Karnataka High Court in the case of CIT vs Karnataka Power Corporation Limited 127 taxmann.com 282 (Karnataka) held that the assessee is entitled to deduction u/s 80IA without setting-off of loss of loss-making units, against income of its profit-making units. 10.2 The same principle has been laid down by Hon'ble Bombay High Court in the case of CIT vs Maharashtra Hybrid Seeds Co Ltd [2021] 133 taxmann.com 43 (Bombay) wherein the jurisdictional High Court held that deduction under section 80-IA has to be computed unit-wise and not for business as a whole; therefore, 20 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 assessee-company was to be allowed deduction under section 80-IA in respect of its two eligible units even if it had claimed loss under head of its total business income. The relevant portion of this judgement is as under:- "Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking, there shall be allowed, in computing the total income of the assessee, a deduction from "such profits and gains" of an amount equal to the percentage specified in sub-section (5) and for such number of assessment years specified in sub- section (6). Therefore, it provides for a deduction from "such profits and gains" from any business of an industrial undertaking where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking. It is quite clear that each industry must be or each unit must be considered on its own working only when adjudging its entitlement to the deduction under section 80-IA. It cannot be allowed to suffer because it keeps company with some other industry or unit in the hands of the assessee. In the application of section 80-IA, the profits and gains earned by an industry mentioned in that section cannot be reduced by the loss suffered by any other industry or industries owned by the assessee. This view is confirmed by clause (i) (a) of sub-section (5) of section 80-IA." (emphasis supplied) 10.3 Hon'ble Madras High Court in the case of CIT vs Bannari Amman Sugars Limited [2019] 104 taxmann.com 1 (Madras) held that for the purposes of grant of deduction under section 80IA of the Act, each unit has to be seen independently as separate and distinct from each other. 10.4 Similar view was taken by Hon'ble Delhi High Court in the case of CIT vs Dewan Kraft System Pvt Ltd (2007) 160 Taxman 343 (Del), where the Hon'ble Delhi High Court, after considering relevant provisions of the Act, held that for the purpose of deduction u/s 80IA, each unit shall be treated as independent unit and same has to be treated as only source of income of the assessee for the purpose of computing deduction u/s 80IA of the Act. The relevant findings of the Hon'ble Court are as under: - 13. Perusal of the above provision shows that it is a distinct and separate deeming provision which lays down the special method of computing the profits and gains entitled to deduction under section 80-IA of the Act. Moreover, this provision is of overriding nature providing specifically that during each of the assessment years in the tax holiday, period in which the assessee is entitled to deduction under section 80-IA of the Act, this provision will be applied as if the industrial unit is an independent unit and is the one and only source of income possessed by the assessee. 14. It is clear that while computing deduction under section 80-IA of the Income-tax Act, 1961, the profits and gains of Kalamb unit for the purpose of determining the quantum of deduction under section 80-IA(5) of the Act is to be computed if such eligible business of the said unit is the only source 21 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 of income of the assessee. The Assessing Officer mixed the profits of the Kalamb unit with the profits of units at Delhi and NOIDA and, thus, he erroneously restricted the deduction to the extent of business income and this was done by him in total disregard of the previsions of sub-section (7) of section 80-IA of the Act as mentioned above. 15. Thus, the Kalamb unit being the only unit of the assessee eligible for deduction under section 80-IA of the Act is to be treated as an independent unit and the same is to be treated as the only source of income for assesses for the purpose of computing deduction under section 80-IA of the Act. The deduction claimed by the assessee under section 80-IA of the Act, thus, is in accordance with the said provisions and as such we find that there is no infirmity in the impugned order passed by the Income-tax Appellate Tribunal. 11. An identical issue arose in the case of Marudhar Fashions ITA No.6967, 6968 & 6969/MUM/2017 wherein the Hon'ble Mumbai Tribunal held that the deduction u/s 80IA should be computed independently for each unit and not on consolidated basis. The relevant portion of this decision is as under: 8. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. There is no dispute with regard to the fact that the assesses is eligible for deduction u/s 80IA in respect of five windmills. The only dispute is with regard to whether each windmill constitute a separate undertaking and the profit or loss of that undertaking alone will be considered for the purpose of deduction u/s 80IA or the sum of profit or loss of all five undertakings together is eligible for deduction u/s 80IA. The co-ordinate bench of ITAT, Mumbai Bench "C" in the case of Punit Construction Co vs JCIT (supra) has considered an identical issue in light of number of windmills and after considering relevant provisions of the Act, including sub section (5) of section 80IA, held that deduction has to be given unit-wise without considering profit or loss of other eligible units. The relevant observations of the Tribunal are as under:- "10. We have heard both the parties, perused the material available on record and gone through the orders of authorities below. We have also carefully considered provisions of section 80IA and case laws relied upon by both parties. The facts with regard to eligibility for claiming deduction under section 80IA has not been disputed by the lower authorities. The tower authorities had admitted that the assessee is eligible for claiming deduction under section 80IA in respect of power generation business though setting off of windmills. The only dispute is with regard to computation of quantum of deduction. Whether the profits and gains of the eligible business as per the words of section 80IA(5) have to be considered unit-wise or as a total eligible business comprising of profits of all units. The provisions of section 80IA(5) provided mechanism for determination of quantum of deduction from eligible business and as per which the eligible business shall be considered as if the only source of income 22 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 of the assessee during the initial year and every subsequent AYs. Therefore, one has to see what eligible business is whether it is the total business as a whole or each unit or undertaking. No doubt the provision of section 80IA speaks about profit and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. Sub-section (5) speaks about eligible business. Now the controversy to be resolved is whether the power generation segment of the assessee is an eligible business or each windmill is a separate unit eligible for deduction without considering profit or loss of other windmill. The assessee claims that each windmill shall be considered as an eligible unit for the purpose of determination of deduction. The assessee also cited certain judicial precedents in support of its arguments. 11. To understand the eligibility for deduction under section 80IA of the Act, the questions that need to be addresses are whether, the gross total income of the assessee is positive, whether the assessee has an eligible business and whether different units in such eligible business are to be taken as one eligible business. To ascertain gross total, income, the first step would be to compute income under each head of income separately. In this case admittedly, the assessee does not have any other head of income except income from Business or Profession. The assessee has only two segment of business income i.e. construction business and power generation business. Admittedly, construction business is not eligible business for claiming deduction under section 80IA, therefore, there is controversy about consolidation of profit from construction business activity. The assessee is having power generation segment through windmills. The assessee has set up five windmills. All the five units are part of power generation segment. Now the question is whether deduction provided under section 80IA shall be given on profits and gains derived from power segment business as the only eligible business or profits and gains derived from each windmills as an eligible business without considering profit or loss of other windmills. There is no dispute with regard to deduction to be given under chapter VIA against gross total income computed from all source of income. Even various decisions of the Hon'ble Supreme Court, including in the case of CIT vs. Liberty India (supra) have clearly held that special deduction under chapter VIA has to be computed on the gross total income and such gross total income has to be computed segment wise business after allowing all the deduction allowable under section 32 to 43D. The Hon'ble Bombay High Court in the case of Plastiblends India Ltd. Vs. ACIT (2009) 185 Taxman 187 after considering the ratio of Hon'ble Supreme Court in the case of Liberty India (supra) held that there has to be profit in the eligible business and such eligible business can be any of the business as referred to in sub- section 3(ii) to 11 (a) of section 80IA of the Act. 23 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 12. In this case, admittedly the assessee is having two segments of business i.e. one is power generation through five windmills which is eligible business and another is construction segment. The assessee has generated profit from two windmills and incurred losses from three windmills. The assessee also derived profit from construction business. The gross total income computed from two segment of business is positive. If you consider each segment of business stand alone, then there is a loss from the power generation segment, if profit or losses of all five windmills are consolidated. The assessee has considered each wind Mill as a separate unit eligible for deduction under section 80IA, without considering profit or loss of other windmills and accordingly claimed deduction towards profit generated from two windmills. If one considered power generation business as one eligible business, certainly the assesses is not eligible for deduction under section 80IA, as from power generation business the assessee has incurred losses. If you strictly apply the provisions of section 80IA(5), the words used therein are clearly states that each eligible business shall be considered as the only source of income of the assessee for the purpose of determination of deduction. If, one goes by the words used in sub section (5), of section 80IA, then there is logic in the unit wise deduction claimed by the assessee, for the reason that deductions under chapter VIA is a incentive based deduction and period specific. The provisions provides for deduction of profits and gains of eligible business for a certain period starting from the period of initial claim. To understand the issue in a better manner, let us take an example. The assessee is in to the business of manufacturing products from different units located at different places. Meantime, the Govt. has announced incentives for setting up units in some places and within such period. The assessee has set up one eligible unit and starts claiming deduction under that provision. Next year, the assessee has set up one more eligible unit at different place and starts claiming deduction from that year and so on. Now both units are eligible units. The period of deduction specified under the act is 10 years for eligible units. Unit one is claiming deduction from initial assessment year and it may end up in some period. Unit two is claiming deduction from next year and it may end up in different year. If one takes initial assessment year from which unit one claims deduction for ten years, the assesses may loose benefit of deduction for one year for unit two, because it has commenced deduction from next year. If you take initial year of claim from the date on which unit two starts claiming deduction, then the assesses may get the benefit for more than 10 years for unit one, if you consider both units as one eligible business and profit or loss of both units is consolidated. This may not be the true intention of the legislature and for that reason the legislature consciously used the word undertaking or unit so as to give a deduction towards eligible units, in a situation where, the assessee is having more than one units in different locations, out of which one unit may be an eligible unit and another unit may not be 24 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 eligible unit and also one unit may get deduction for different period and another unit may get deduction for different period. This is why the courts and tribunals has consistently held that deduction provided u/s 80IA has to be given unit wise without considering profit or loss of other units. This legal proposition is strengthened by the decision of ITAT, Ahmadabad, special bench in the case of CIT vs. Goldmine Shares and Finance Pvt. Ltd." 9. A similar issue has been considered by Hon'ble Delhi High Court in the case of CIT vs Dewan Kraft System Pvt Ltd (2007) 160 Taxman 343 (Del), where the Hon'ble Delhi High Court, after considering relevant provisions of the Act, held that for the purpose of deduction u/s 80IA, each unit shall be treated as independent unit and same has to be treated as only source of income of the assessee for the purpose of computing deduction u/s 80IA of the Act. The relevant findings of the Hon'ble Court are as under:- "Section 80-IA(7) shows that it is a distinct and separate deeming provision which lays down the special method of computing the profits and gains entitled to deduction under section 80-IA. Moreover, this provision is of overriding nature providing specifically that during each of the assessment years in the tax holiday, period in which the assessee is entitled to deduction under section 80-IA, this provision will be applied as if the industrial unit is an independent unit and is the one and only source of income possessed by the assessee. [Para 13 J If is dear that while computing deduction under section 80-IA, the profits and gains of Kalamb unit for the purpose of determining the quantum of deduction under section 80-IA(5) were to be computed as if such eligible business of the said unit was the only source of income of the assessee. The Assessing Officer mixed (he profits of the Kalamb unit with the profits of units at Delhi and NOIDA and, thus, he erroneously restricted the deduction to the extent of business income and that was done by him in total disregard of the provisions of subsection (7) of section 80-IA. [Para 14] Thus, the Kalamb unit, being the only unit of the assessee eligible for deduction under section 80-IA, was to be treated as an independent unit and the same was to be treated as the only source of income for the assesses for the purpose of computing deduction under section 80- IA. The deduction claimed by the assessee under section 80-IA, thus, was in accordance with said provisions and as such there was no 10. In this view of the matter and being consistent with the view taken by the co-ordinate bench, which is further supported by the decision of Hon'ble Delhi High Court in the case of CIT vs Dewan Kraft Systems Pvt Ltd (supra), we are of the considered view that the Ld. CIT(A) was right in allowing the benefit of deduction u/s 80IA in respect of each unit without setting off of loss incurred by other eligible units. Hence, we are inclined to uphold the findings of Ld. CIT(A) and dismiss appeal filed by the revenue. (emphasis supplied) 25 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 12. The above discussion suggests that Hon'ble Courts as well as Hon'ble Tribunal on various occasions have held that each unit should be considered as separate undertaking eligible for deduction u/s 80IA and the deduction should be computed independently for each unit and not on consolidated basis, as done by the assessing officer. Further, as discussed above, in appellant's own case for AYs 2012-13 to 2014-15, the Hon'ble Tribunal has decided the issue under consideration, in favour of appellant. It is incumbent upon me to follow the decision of Hon'ble ITAT in appellant's own case for earlier years. Following the decision of Hon'ble Tribunal in appellant's own case, it is held that each wind-mill should be considered as separate undertaking eligible for deduction u/s 80IA and the deduction should be computed independently for each unit and not on consolidated basis. Accordingly, the addition of Rs. 2,84,42,603/- made by the assessing officer is directed to be deleted. The grounds no. 1 to 7 raised by the appellant are accordingly ALLOWED.” 21. Aggrieved with such order of CIT(A), the Revenue is in appeal before the Tribunal. 22. The Ld. DR heavily relied on the order of Assessing Officer. He submitted that although the issue has been decided in favour of the assessee by the decision of the Tribunal, however, the Revenue in certain other cases has challenged the order of the Tribunal under identical situation before the Hon‟ble High Court which is still pending. Therefore, to keep the matter alive, the Revenue has filed the appeal. He accordingly, submitted that the order of the Assessing Officer be upheld and the order of CIT(A) be set aside. 23. The Ld. Counsel for the assessee on the other hand submitted that the Assessing Officer rejected the claim of the assessee holding that the deduction u/s 80IA of the Act is to be worked out by considering all the windmills as part of one undertaking. Further, according to the Assessing Officer, the initial assessment year is to be considered as the year in which the windmill was installed. Therefore, 26 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 the Assessing Officer considered the notional brought forward losses / depreciation and set off the same against the profits of the windmills in the year under consideration. According to the Assessing Officer, similar disallowance has been made in the assessee‟s own case for the earlier years and therefore, he rejected the claim of deduction u/s 80IA of the Act. The Ld. Counsel for the assessee submitted that the CIT(A) after appreciating the facts of the case in assessee‟s own case for assessment years 2012-13 to 2014-15 has held that each windmill is to be considered as a separate undertaking. Similarly, the initial assessment year has to be considered as the year in which the deduction is first claimed by the assessee. It is also his submission that unabsorbed losses and depreciation of each windmill has already been set off against other business income of the assessee. Since the CIT(A) after appreciating the facts of the case properly has decided the issue in favour of the assessee and further the CBDT vide Circular No.1 of 2016 dated 15.02.2016 has also clarified that initial assessment year would mean the year in which the assessee has claimed the deduction for the first time and not the year in which the windmill is installed, therefore, the order of the CIT(A) is in accordance with the law and should be upheld and the grounds raised by the Revenue be dismissed. 24. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case denied the claim of deduction u/s 27 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 80IA of the Act in respect of the profits derived from the windmills on the ground that the deduction u/s 80IA is to be worked out by considering all the windmills as part of one undertaking and that the initial assessment year is to be considered as the year in which the windmill was installed. Further, similar disallowance was made in assessee‟s own case in the earlier years and therefore, he rejected the claim of deduction. We find the CIT(A) deleted the disallowance made by the Assessing Officer, the reasons of which are already reproduced in the preceding paragraphs. 25. We do not find any infirmity in the order of CIT(A) on this issue. We find the CBDT vide Circular No.1 of 2016 dated 15.02.2016 has clarified that the initial assessment year would mean the year in which the assessee has claimed the deduction for the first time and not the year in which the windmill is installed. Further, the Tribunal in assessee‟s own case for assessment years 2012-13 to 2014- 15 has held that each windmill is to be considered as a separate undertaking. Since the Tribunal in assessee‟s own case for the immediately preceding assessment years i.e. 2012-13 to 2014-15 vide ITA No.76/PUN/2019 for assessment year 2012-13, ITA No.2614/PUN/2017 for assessment year 2013-14 and 07/PUN/2018 for assessment year 2014-15 common order dated 27.08.2019 has already decided the issue in favour of the assessee by dismissing the appeals filed by the Revenue and since the CIT(A) while deciding the issue in favour of the assessee while relying on the order of Tribunal in assessee‟s own case has also relied on various other decisions of the Tribunal under identical circumstances, therefore, in absence 28 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 of any contrary material brought on record by the Ld. DR, we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly, the grounds raised by the Revenue are dismissed. 26. Identical grounds have been raised by the Revenue in assessment years 2016-17 and 2017-18 which read as under: ITA No.1088/PUN/2024 – A.Y. 2016-17 (a) Whether on the facts and in the circumstances of the case & in the law, the CIT (A) is correct in deleting the addition made by the AO on account of disallowance of deduction claimed by the assessee u/s 80IA amounting to Rs. 1,49,06,232/- relying merely on the orders of CIT(A) and ITAT in assessee's own case for previous years and not on the merits of the case? (b) Whether on the facts and in the circumstances of the case & in the law, the CIT (A) is correct in holding that for the purposes of section 80IA(4) all the windmills installed by the assessee are to be considered as a separate undertaking and deduction u/s 80IA(4) be computed independently for each windmill and not on consolidated basis? (c) Whether on the facts and in the circumstances of the case & in the law, the CIT (A) is correct in holding that in view of the provisions of section 80IA(5) of the Act the profit from eligible business for purpose of deduction u/s 80IA of the Act need not be computed after deduction of the notional brought forward losses and depreciation of eligible business even when the same had been set off against income from non-eligible business in earlier years? (d) Whether on the facts and in the circumstances of the case & in the law, the CIT (A) has erred in allowing deduction u/s 80IA beyond Rs.1,49,06,231/- over enhanced gross total income resulting from additions made during the course of assessment proceedings?” ITA No.240/PUN/2024 – A.Y. 2017-18 1. Whether on the facts and in the circumstances of the case & in the law, the CIT (A) is correct in deleting the addition made by the AO on account of disallowance of deduction claimed by the assessee u/s 80IA amounting to Rs.1,33,01,624/- relying merely on the orders of CIT(A) and ITAT in assessee's own case for previous years and not on the merits of the case? 29 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 2. Whether on the facts and in the circumstances of the case & in the law, the CIT (A) is correct in holding that for the purposes of section 80IA(4) all the windmills installed by the assessee are to be considered as a separate undertaking and deduction u/s 80IA(4) be computed independently for each windmill and not on consolidated basis? 3. Whether on the facts and in the circumstances of the case & in the law, the CIT (A) is correct in holding that in view of the provisions of section 80IA(5) of the Act the profit from eligible business for purpose of deduction u/s 80IA of the Act need not be computed after deduction of the notional brought forward losses and depreciation of eligible business even when the same had been set off against income from non-eligible business in earlier years? 27. Since we have already decided the issue in favour of the assessee by upholding the order of CIT(A) and the grounds raised by the Revenue have been dismissed while deciding the appeal for assessment year 2016-17, therefore, following similar reasonings, the grounds raised by the Revenue in the above 2 assessment years are also dismissed. 28. In the result, the two appeals filed by the assessee are allowed and the three appeals filed by Revenue are dismissed. Order pronounced in the open Court on 5 th July, 2024. Sd/- Sd/- (ASHTA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दिन ांक Dated : 5 th July, 2024 GCVSR 30 ITA Nos.417, 418, 1046, 1088 & 240/PUN/2024 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, „A‟ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 01.07.2024 Sr. PS/PS 2 Draft placed before author 04.07.2024 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order