ACIT, Central Circle 1(1), Pune V. M/s. Damodar Jagannath Malpani, Sangamner

ITA 1184/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0957 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARSHAVARDHINI BUTY
• Keywords: Depreciation; Additional depreciation; Earning of tax free income; Revised return; Reassessment proceedings
• Section: 143(3); 153A; 139(5); 132

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1148 TO 1154/PN/2013 '% % / ASSESSMENT YEARS : 2004-05 TO 2010-11 M/S. D.J. MALPANI, MALPANI ESTATE, KASARA DUMALA, AKOLE ROAD, SANGAMNER 422605 DIST : AHMEDNAGAR PAN NO.AACFD1713B . / APPELLANT V/S ACIT, CENTRAL CIRCLE-1(1), PUNE . / RESPONDENT . / ITA NOS.1183 TO 1188/PN/2013 '% % / ASSESSMENT YEARS : 2005-06 TO 2010-11 ACIT, CENTRAL CIRCLE-1(1), PUNE . / APPELLANT V/S M/S. DAMODAR JAGANATH MALPANI, MALPANI ESTATE, SR.NO.50/1 KASARA DUMALA, SANGAMNER 422605 PAN NO.AACFD1713B . / RESPONDENT / ASSESSEE BY : SHRI NIKHIL PATHAK / DEPARTMENT BY : SMT. HARSHAVARDHINI BUTY / DATE OF HEARING :02.09.2015 / DATE OF PRONOUNCEMENT:30.10.2015 2 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 / ORDER PER R.K. PANDA, AM: ITA NO.1148/PN/2013 FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 18-03-2013 OF THE CIT(A)-I, PUNE RELAT ING TO ASSESSMENT YEAR 2004-05. ITA NO.1149/PN/2013 TO ITA NO. 1154/PN/2013 FILED BY THE ASSESSEE AND ITA NO.1183/PN/2 013 TO 1188/PN/2013 FILED BY THE REVENUE ARE CROSS APPEALS AND ARE DIREC TED AGAINST SEPARATE ORDERS DATED 18-03-2013 OF THE OF THE CIT(A)-I, PUNE RELATING TO ASSESSMENT YEARS 2005-06 T0 2010-11. FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.1148/PN/2013 (A.Y. 2004-05) (BY ASSESSEE) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING, PACKING AND S ELLING OF TOBACCO JARDA, ALLIED BY-PRODUCTS, LIME AND GENERATION OF P OWER THROUGH WINDMILL. IT FILED THE RETURN OF INCOME ON 31-10-200 4 DECLARING TOTAL INCOME OF RS.26,22,35,980/-. A SEARCH ACTION U/S.132 OF THE ACT WAS CONDUCTED IN THE MALPANI GROUP OF CASES O N 06-10-2009. IN RESPONSE TO NOTICE U/S.153A, THE ASSESS EE FILED THE RETURN OF INCOME ON 24-06-2010 DISCLOSING TOTAL INCOME OF RS.23,95,15,482/- AFTER CLAIMING DEDUCTION OF RS.2,27,20,498 U/S.80IA(4) OF THE ACT. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION O F RS.2,27,20,498/- U/S.80IA(4)(IV)(A) TOWARDS PROFIT EARNED FROM WIN D POWER GENERATION FROM ITS WINDMILL. HOWEVER, NO SUCH CLAIM WAS MADE BY THE ASSESSEE IN ITS ORIGINAL RETURN. THE ASSESSEE HAS CLAIMED THE 3 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 BENEFIT OF DEDUCTION OF RS.2,27,20,498/- BY WAY OF CLAIMING DEDU CTION U/S.80IA(4) IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153 A. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY SUCH ALLOWANCE SHOULD BE GIVEN TO THE ASSESSEE ESPECIALLY WHEN THERE W AS NO CLAIM IN THE ORIGINAL RETURN OF INCOME FILED ON 31-10-2004. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING O N VARIOUS DECISIONS THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S.80IA(4) OF THE ACT. 3. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE TO EACH OTHER ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN DENYING THE DEDUCTI ON CLAIMED U/S. 80IA(4) OF RS.2,27,20,498/-. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSE SSEE WAS NOT ENTITLED TO MAKE A FRESH CLAIM IN THE RETURN FILED U/S. 153A ON THE GROUND THAT IN THE ASST. U/S 153A, ONLY INCOME WHICH HAD ESCAP ED ASST. COULD BE TAXED AND THE ASSESSEE COULD NOT BE PLACED IN A BETTER POSITION VIS-A-VIS THE INCOME DECLARED IN THE ORIGINAL RETURN. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN THE ASST. U/S. 153A, THE ISSUES WHICH HAVE ALREADY ATTAINED FINALITY IN THE ORI GINAL ASST. CANNOT BE DISTURBED UNLESS ANY INCRIMINATING EVIDENCE IS FOUND I N RESPECT OF THE SAME AND SINCE NO SUCH MATERIAL WAS FOUND IN RESPECT OF THE DEDUCTION U/S. 80IA(4) CLAIMED IN RESPECT OF WINDMILLS, THE SAID CLAIM OF THE ASSESSEE MADE IN THE ASST. U/S. 153A WAS NOT ALLOWABLE. 4] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT IN THE ASST. U/S. 153A, THE ASSESSEE COULD MAKE A FRESH CLAIM WHICH WAS NOT MADE IN THE ORIGINAL RETURN AND THERE WAS NO SUCH BAR THAT NO NEW CLAIM CO ULD BE MADE BY THE ASSESSEE IN THE RETURN FILED U/S 153A. 5] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE ASST. U/S. 143(3) HAD NOT TAKEN PLACE FOR THIS YEAR AND HENCE, IN THE ASST. U/S 153A, THE A.O. WAS BOUND TO ASSESS THE TOTAL INCOME OF THE ASSESS EE AND THEREFORE, EVEN THE ISSUES IN RESPECT OF WHICH NO INCR IMINATING EVIDENCE WAS FOUND DURING SEARCH SHOULD HAVE BEEN CONSIDERED IN THE ASST. U/S. 153A AND THUS, THE DEDUCTION CLAIMED BY THE ASSESSEE SHOU LD HAVE BEEN ALLOWED. 4 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 6] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THA T EACH PHASE OF WIND MILLS WAS TO BE CONSIDERED AS A SEPARATE UNDERTAKING EL IGIBLE FOR DEDUCTION U/S.80IA AND HENCE, THE DEDUCTION U/S.80IA(4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PHASES AND NOT ON CON SOLIDATED BASIS. 7] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING TH AT IN VIEW OF THE PROVISIONS OF SECTION 80IA(5) OF THE INCOME TAX ACT, 1 961 THE PROFIT FROM THE ELIGIBLE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S. 80IA OF THE ACT NEED NOT BE COMPUTED AFTER DEDUCTION OF THE NOTIONAL BRO UGHT FORWARD LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS WHICH HAVE BEEN SET OFF AGAINST OTHER INCOME IN EARLIER YEARS. 7.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE ONLY FROM THE INITIA L ASST. YEAR I.E. THE ASST. YEAR IN WHICH DEDUCTION U/S. 80IA WAS FIRST CLAIMED BY THE ASSESSEE AND ONLY FOR THE YEARS STARTING FROM THE INITIAL ASST. YEA R AND THEREAFTER, THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE AND HENC E, THERE WAS NO REASON TO SET OFF THE NOTIONAL BROUGHT FORWARD LOSSES/D EPRECIATION WHILE COMPUTING THE DEDUCTION U/S. 80IA FOR THE PRESENT ASST. YEAR. 8] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE ISSUE STANDS DECIDED AGAINST THE ASSESSEE BY THE D ECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF B.G. SHIRKE CONST RUCTION TECHNOLOGY PVT. VS. ACIT VIDE ITA NOS.727 TO 730/PN/201 2 ORDER DATED 31-10-2013 FOR A.YRS. 2003-04 AND 2006-07 TO 200 8-09 RESPECTIVELY. IT HAS BEEN HELD IN THE SAID DECISION THAT IN RESPECT OF THE ASSESSMENTS WHICH ARE COMPLETED PRIOR TO THE DATE OF S EARCH, NO FRESH CLAIM OF DEDUCTION CAN BE MADE BY THE ASSESSEE. IN VIEW O F THE ABOVE SUBMISSION BY THE LD. COUNSEL FOR THE ASSESSEE AND IN ABS ENCE OF ANY OBJECTION FROM THE LD. DEPARTMENTAL REPRESENTATIVE, THE O RDER OF THE CIT(A) HOLDING THAT ASSESSEE IS NOT ENTITLED TO MAKE A FRE SH CLAIM IN THE RETURN FILED U/S.153A WHEN NO SUCH CLAIM WAS MADE IN THE ORIGINAL RETURN OF INCOME HAS TO BE UPHELD. THE GROUNDS RAISED B Y THE ASSESSEE ARE ACCORDINGLY DISMISSED. 5 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 ITA NO.1149/PN/2013 (A.Y. 2005-06) (BY ASSESSEE) : 5. GROUNDS OF APPEAL NO.1 TO 8 BY THE ASSESSEE RELATE TO DENIAL OF DEDUCTION CLAIMED U/S.80IA(4) OF THE ACT AMOUNTING TO RS.3,33,57,599/-. 6. FACTS IN BRIEF ARE THAT THE ASSESSEE HAD MADE A CLAI M OF RS.3,33,57,599/- U/S.80IA(4) IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A WHEREAS NO SUCH CLAIM WAS MADE IN THE ORIGINAL RE TURN OF INCOME. THE AO DISALLOWED SUCH CLAIM WHICH WAS UPHELD BY TH E CIT(A). AGGRIEVED WITH SUCH ORDER OF CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 7. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUNDS RAISE D BY THE ASSESSEE ARE IDENTICAL TO GROUNDS OF APPEAL IN ITA NO.1148 /PN/2013 FOR A.Y. 2004-05. WE HAVE ALREADY DECIDED THE ISSUE AND T HE GROUNDS RAISED BY THE ASSESSEE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONINGS, THE GROUNDS RAISED BY THE ASSESSEE FOR A.Y. 2 005-06 ARE ALSO DISMISSED. ITA NO.1183/PN/2013 (A.Y. 2005-06 (BY REVENUE) : 8. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. THE LD.CIT(A) ERRED IN DECIDING THAT NO ADDITIO N CAN BE MADE U/S.153A, IF THE SAME IS NOT MADE IN ASSESSMENT U/S.143(3) OF THE ACT AND IF IT IS NOT BASED ON ANY INCRIMINATING SEIZED MATERIA LS PERTAINS TO SUCH A.Y. 2. THE LD.CIT(A) ERRED IN DECIDING THAT PROVISION OF SECTION 40A(IA) OF THE ACT IS APPLICABLE ONLY IN THE CASE OF PAYABLE AND NOT IN THE CASE OF ACTUAL PAID. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 9. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE DURING THE IMPUGNED 6 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 ASSESSMENT YEAR HAS DERIVED SALES TAX INCENTIVE/BENEFIT T O THE TUNE OF RS.2,62,49,999/-IN SALES TAX INCENTIVE DEFERRAL SCHEME ON ACC OUNT OF ITS INVESTMENT IN WINDMILLS. THE ENTIRE SALES TAX INCENTIVE H AS BEEN TRANSFERRED BY THE ASSESSEE TO KOPARGAON SAHAKARI SAK HAR KARKHANA LTD. AND M/S. VANAZ ENGINEERING LTD. ON ACCOUNT OF THESE TRANSFER OF BENEFIT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.2,04,16,6 66/- FROM KOPARGAON SAHAKARI SAKHAR KARKHANA LTD. AND RS.58,33,332 /- FROM M/S. VANAZ ENGINEERING LTD. WITH LIABILITY TO RETURN THESE AMOUNTS TO THE SAID PARTIES AFTER 10 YEARS IN 5 EQUAL ANNUAL INSTALMEN TS. AS PER THE TERMS AGREED BETWEEN THE PARTIES THE ASSESSEE WA S TO TREAT THE AMOUNT RECEIVED FROM THE PURCHASER AS LOAN WHICH WAS T O BE REPAID AS PER THE TERMS MENTIONED ABOVE WITHOUT ANY INTEREST. FU RTHER, THE AGREEMENT SHOWS THAT IN CASE THERE WAS DELAY IN PAYMEN T WITHIN A GIVEN TIME THE ASSESSEE WAS ENTITLED TO RECEIVE INTEREST @14% PER ANNUM AND 18% PER ANNUM RESPECTIVELY FROM KOPARGAON S SK LTD. AND M/S. VANAZ ENGG. LTD. AS PER CLAUSE 1.11.1 THE ASSES SEE WAS TO TREAT THE AMOUNT AS LOAN AND ACCORDINGLY SHOWED THE A MOUNT IN THE BALANCE SHEET AS UNSECURED LOAN. SINCE THE ASSESSEE HA S PAID INTEREST @12.5% TO KOPARGAON SSK LTD. AND @9% TO M/S. VANAZ ENG G. LTD. AS DISCOUNT AMOUNTING TO RS.32,50,743/- AND CLAIMED THE SAME AS FINANCE CHARGE IN THE PROFIT AND LOSS ACCOUNT, THE AO ASKE D THE ASSESSEE TO EXPLAIN AS TO WHY DISALLOWANCE U/S.40(A)(IA) SHALL N OT BE APPLIED FOR FAILURE TO DEDUCT TDS ON INTEREST AS PER THE R EQUIREMENT OF SECTION 194A. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND APPLYING THE PROVISIONS OF SECTION 40(A)(IA) THE AO MADE ADDITION OF RS.32,50,743/-. 7 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 10. BEFORE CIT(A) IT WAS SUBMITTED THAT ORIGINAL ASSESSMENT U/S.143(3) WAS ALREADY COMPLETED PRIOR TO THE SEARCH. IN THE ASSESSMENT ORDER PASSED U/S.153A THE AO HAS MADE THIS ADDITION. RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASES OF CIT VS. MURALI AGRO PRODUCTS LTD. VIDE ITA NO.36/2009 O RDER DATED 29-10-2010 AND THE DECISION OF THE SPECIAL BENCH OF THE T RIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT REPORTE D IN 18 ITR 106 IT WAS ARGUED THAT IN ABSENCE OF ANY INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH NO ADDITION CAN BE MADE IN T HE ASSESSMENT U/S.153A OF THE I.T. ACT. 11. IN APPEAL THE LD.CIT(A) RELYING ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS LTD. REPORTED IN 16 ITR (TRIB.) 5 DELETED THE ADDITION MADE U/S.40A(IA). FURTHER, HE NOTED THAT THIS ADDITION WAS NEITHER MADE IN THE ORIGINAL ASSESSMENT NOR DOES IT ARISE OUT OF ANY NEW FACTS UNEAR THED DURING THE SEARCH. RELYING ON THE DECISION OF THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF MURALI AGRO PRODUCTS LTD. (SUPRA) AND FOLLOW ING HIS DECISION IN THE CASE OF RAJESH MALPANI FOR A.Y. 2004-05 VIDE APPEAL NO.PN/CIT(A)-I/ACIT/CEN.CIR.1(1)/PN/430/11-12 THE LD.CIT(A) H ELD THAT THE ASSESSMENT WHICH HAS ALREADY BEEN COMPLETED U /S.143(3) PRIOR TO SEARCH BECOMES FINAL UNLESS ANY INCRIMINATING EVIDEN CE WAS FOUND RELATING TO THE ADDITION DURING THE COURSE OF SEARCH. 12. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 13. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES. ADMITTEDLY, THE ASSESSMENT IN THE INSTANT CASE WAS EARLIE R COMPLETED 8 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 U/S.143(3) ON 29-12-2008 WHICH IS PRIOR TO THE DATE OF SE ARCH THAT TOOK PLACE ON 06-10-2009. NO MATERIAL HAS BEEN GATHERE D DURING THE COURSE OF PROCEEDINGS U/S.153A OF THE I.T. ACT THAT RELIEF GRANTED UND ER THE FINALIZED ASSESSMENT/RE-ASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. THE L D. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FIN DINGS GIVEN BY THE CIT(A) THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. MURALI AGRO PRODUCTS LTD. VIDE ITA NO.36/2009 ORDER D ATED 29-10- 2010 AND IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING C ORPORATION VIDE ITA NO.523/2013 ORDER DATED 21-04-2015 HAS HELD THAT THE AO WHILE PASSING THE ASSESSMENT ORDER U/S.153A R.W.S. 143(3) CANNOT DISTURB THE ASSESSMENT ORDER WHICH HAS BEEN FINALIZED EAR LIER IN ABSENCE OF ANY INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH OR DURING 153A PROCEEDINGS. RESPECTFULLY FOLLOWING THE DECISION S OF HONBLE JURISDICTIONAL HIGH COURT CITED (SUPRA) AND IN ABSENC E OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE GROUND RAISED BY THE REVE NUE IS ACCORDINGLY DISMISSED. 14. SO FAR AS GROUND OF APPEAL NO.2 BY THE REVENUE IS C ONCERNED, THE PUNE BENCHES OF THE TRIBUNAL ARE CONSISTENTLY TAK ING THE VIEW THAT PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT ARE APPLICABLE EV EN WHEN NO AMOUNT IS PAYABLE AT THE END OF THE YEAR. THEREFORE, GROUND OF APPEAL NO.2 BY THE REVENUE HAS TO BE ALLOWED. HOWEVER, IN VIEW OF THE IST GROUND BEING DISMISSED, THE 2 ND GROUND BECOME ONLY ACADEMIC IN NATURE. 9 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 ITA NO.1150/PN/2013 (A.Y. 2006-07) (BY ASSESSEE) : 15. GROUNDS OF APPEAL NOS. 1 TO 8.1 BY THE ASSESSEE RELA TES TO DENIAL OF DEDUCTION CLAIMED U/S.80IA(4) OF THE ACT AMOUNTING TO RS.4,70,07,435/-. 16. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME FILED ON 31-12-2006 HAS NOT CLAIMED ANY DEDUCTION U/S.80IA(4) AND HAD DECLARED INCOME OF RS.20,08,76,295/-. IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A ON 24-06-2010 THE ASSESSEE DECLARED INCOME OF RS.15,42,90,549/- AFTER CLAIMING DEDUCTION OF RS.4,70,07,435/- U/S.80IA(4). THE ORIGINAL ASSESSM ENT U/S.143(3) WAS PASSED ON 29-12-2008 MAKING ADDITION OF RS.58,64,461/- TO THE TOTAL INCOME OF THE ASSESSEE. IN T HE ORDER PASSED U/S.153A R.W.S. 143(3) THE AO DENIED THE FRESH CLAIM MADE U/S.80IA(4) AMOUNTING TO RS.4,70,07,435/- WHICH WAS UPHELD B Y THE CIT(A). 17. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 18. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUNDS RAIS ED BY THE ASSESSEE ARE IDENTICAL TO GROUNDS OF APPEAL IN ITA NO.1148 /PN/2013 FOR A.Y. 2004-05. WE HAVE ALREADY DECIDED THE ISSUE AND T HE GROUNDS RAISED BY THE ASSESSEE HAVE BEEN DISMISSED. FOLLOWING THE SAME RATIO, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 19. GROUNDS OF APPEAL NO.9 TO 9.2 BY THE ASSESSEE ARE AS UNDER : 9] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISA LLOWANCE OF DEPRECIATION AT HIGHER RATE OF 80% CLAIMED BY THE A SSESSEE IN RESPECT OF THE COST OF ELECTRICAL YARD FENCING AND THE COST OF P REPARATION OF TEMPORARY APPROACH ROAD WITHOUT APPRECIATING THAT THE ASST. U/S. 143(3) WAS 10 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 COMPLETED FOR THIS YEAR AND HENCE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH PERTAINING TO THIS I SSUE, THE DISALLOWANCE OF DEPRECIATION WAS NOT WARRANTED. 9.1] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE EXPENDITURE ON ELECTRICAL YARD FENCING AND COST OF PREPARATION OF T EMPORARY APPROACH ROAD WAS NOT PART OF ACTUAL COST OF THE WIND MILL AND HENCE, THE DEPRECIATION AT A HIGHER RATE OF 80% WAS NOT ALLOWAB LE IN RESPECT OF SUCH ITEMS. 20. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS NOTED FROM THE DEPRECIATION CHAR T THAT ADDITION OF RS.46,06,93,328/- WAS MADE IN THE BLOCK OF WINDMILLS . FROM THE BREAKUP OF THE COST THE AO NOTED THAT THE A SSESSEE HAS INCLUDED COST OF CIVIL WORKS IN THIS COST. HE THEREFORE ASKE D THE ASSESSEE TO JUSTIFY ITS CLAIM OF DEPRECIATION AT HIGHER RA TE OF 80% ON THE EXPENDITURE ON CIVIL WORKS AS WELL AS ELECTRICAL ITEMS, TR ANSFORMERS, ERECTION AND COMMISSIONING, IF ANY. IT WAS EXPLAINED THAT TH E ENTIRE EXPENDITURE BEING COST OF WINDMILL IS ENTITLED TO DEPRECIATION @80%. 21. HOWEVER, THE AO DID NOT ACCEPT THE SAME ON THE GR OUND THAT IN THE PROVISIONS OF I.T. RULES, 1962 FOR ALLOWING DEPRECIATION DIFFE RENT TYPES OF ASSETS HAVE BEEN FOUND SPECIFIED THEREBY GIVING D IFFERENT RATES OF DEPRECIATION. ACCORDING TO HIM WINDMILL AND ANY SPECIAL DE SIGNED TYPES WHICH RUN ON WINDMILLS HAS BEEN ALLOWED DEPRECIATION @80% AND THE BLOCK OF ASSETS WHICH CONSTITUTES BUILDING HAS BE EN ALLOWED DEPRECIATION @10%. FROM THE DETAILS FURNISHED BY THE ASS ESSEE HE NOTED THAT COST OF ELECTRICAL YARD FENCING AND COST OF PREPARATION OF TEMPORARY APPROACH ROAD TOTALING TO RS.29,06,008/- HAS BEEN INCLUD ED IN THE COST OF WINDMILLS. ACCORDING TO HIM ELECTRICAL YARD FENC ING AND PREPARATION OF APPROACH ROAD CANNOT BE CONSIDERED AS P ART OF WINDMILLS BECAUSE THEY ARE NOTHING BUT BUILDING. THEIR USE IS NOT DEPENDING ON WINDMILL. RELYING ON THE DECISION OF THE PUNE B ENCH OF 11 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 THE TRIBUNAL IN THE CASE OF POONAWALA FINVEST AGRO PVT. LT D. VS. ACIT REPORTED IN 118 TTJ 68 THE AO DISALLOWED EXCESS CLAIM OF D EPRECIATION OF RS.10,17,103/-. 22. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER : 9.2. IT IS THUS SEEN THAT GROUND NO. 19 TO 19.2 ESSENTI ALLY RELATE TO A CLAIM RELATING TO THE CIVIL INSTALLATION COST ON THE INSTAL LATION OF WINDMILLS AND DEPRECIATION THEREOF, MADE IN THE ORIGINAL RETURN O F INCOME. THE CLAIM BY THE APPELLANT OF DEPRECIATION AT HIGHER RATE ON CIV IL CONSTRUCTION OF WINDMILLS IS INADMISSIBLE IN VIEW OF THE JURISDICTIONAL ITAT DECISION IN POONAWALLA FINVEST AND AGRO (P) LTD. VS ACIT REPORTED IN 118 TTJ 68 AND VANAZ ENGINEERING LTD. VS. ADDL. CIT IN ITA NO. 987/ PN/2006 DATED 31.10.2008. THE DELHI HIGH COURT IN ANIL KUMAR BHAT IA AND SPECIAL BENCH ITAT MUMBAI IN ALL CARGO LOGISTICS HAVE CLEARLY HELD THAT REASSESSMENT OF INCOME IS POSSIBLE IN THE FRESH PROCEEDINGS U/S 153A, CO NSEQUENT TO SEARCH, ON THE BASIS OF BOOKS OF ACCOUNTS NOT PRODUCED EARLIER, SINCE THE TWO PROCEEDINGS GET MERGED. IN VIEW OF THE ABOVE, FO LLOWING THE JURISDICTIONAL ITAT DECISIONS REFERRED TO SUPRA AND MY APPELLATE ORDER IN THE APPELLANT'S CASE FOR A.Y. 2010-11 IN APPEAL NO. P N/CIT(A)- IIACIT/CEN.CIR.1(1)/PN/487/11-12 DATED 18.3.2013, GROUNDS OF APPEAL NO. 19 TO 19.2 ARE TREATED AS PARTLY ALLOWED, SUBJECT TO THE COMPUTATION OF DEPRECIATION AS PER DIRECTIONS CONTAINED IN PARA 6.3 OF THAT ORDER. 23. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 24. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT SINCE THE ADDITION IS NOT BASED ON ANY INCRIMINATING MATER IAL FOUND DURING THE COURSE OF SEARCH OR POST SEARCH ENQUIRIES AN D THE ORIGINAL ASSESSMENT WAS COMPLETED ON 29-12-2008 WHICH IS PRIOR T O THE DATE OF SEARCH ON 06-10-2009, THEREFORE, NO DISALLOWANCE IS CALLED FOR. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION VIDE ITA NO.523/2013 ORDER DATED 21-04-201 5. HOWEVER, ON MERITS HE SUBMITTED THAT THE ISSUE STANDS DECIDED AG AINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF PO ONAWALA 12 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 FINVEST & AGRO PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD T HAT HIGHER RATE OF DEPRECIATION IS NOT ALLOWABLE ON ELECTRICAL FENCING AN D TEMPORARY APPROACH ROAD. 25. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT THE AO HAS JURISDICTION U/S.153A TO REASSESS THE INCOME. 26. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. ADMITTEDLY, IN THE INSTANT CASE THE ASSESSMENT WAS COMPLETED U/S.143(3) ON 29-12-2008. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH FOR THE IMPUGNED ASSESSMENT YEAR. HOWEVER, DURING PROCEEDINGS U /S.153A IT WAS FOUND THAT ASSESSEE HAS CLAIMED HIGHER DEPRECIATION ON ELECTRICAL FENCING AND TEMPORARY APPROACH ROAD. THEREFORE, IN VIEW OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF P OONAWALA FINVEST & AGRO PVT. LTD. REPORTED IN 118 TTJ 68, WE ARE O F THE CONSIDERED OPINION THAT THE LD.CIT(A) IS JUSTIFIED IN SUSTAIN ING THE ADDITION MADE BY THE AO. ACCORDINGLY, THE DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS.10,17,103/- IS UPHELD. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. ITA NO.1184/PN/2013 (A.Y. 2006-07) (BY REVENUE) : 27. GROUNDS OF APPEAL NO.1 & 2 BY THE REVENUE ARE AS UNDER : 1. THE LD.CIT(A) ERRED IN DECIDING THAT NO ADDITIO N CAN BE MADE U/S.153A, IF THE SAME IS NOT MADE IN ASSESSMENT U/S.143(3) OF THE ACT AND IF IT IS NOT BASED ON ANY INCRIMINATING SEIZED MATERIA LS PERTAINS TO SUCH A.Y. 13 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 2. THE LD.CIT(A) ERRED IN DECIDING THAT PROVISION OF SECTION 40(A)(IA) OF THE ACT IS APPLICABLE ONLY IN THE CASE OF PAYABLE AND NOT IN THE CASE OF ACTUAL PAID. 28. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS FILED BY THE REVENUE ARE IDENTICAL TO THE GROUNDS OF APPEAL IN IT A NO.1183/PN/2013 FOR A.Y. 2005-06. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONINGS THE ABOVE GROUNDS ARE DEC IDED ACCORDINGLY. EVEN OTHERWISE ALSO DISALLOWANCE WAS MADE IN ORIGINAL ASSESSMENT U/S.143(3) WHICH WAS UPHELD BY CIT(A). ON FURTHE R APPEAL, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE AS STATED BY CIT(A) AND NOT CONTROVERTED BY THE LD. DEPARTMENTAL REP RESENTATIVE. THEREFORE, IN ABSENCE OF ANY INCRIMINATING MATERIAL, NO ADDITIO N CAN BE MADE IN THE ASSESSMENT U/S.153A. THE GROUNDS BY TH E REVENUE ARE ACCORDINGLY DISMISSED. 29. GROUNDS OF APPEAL NO. 3 & 4 BY THE REVENUE ARE AS UNDER : 3. THE LD.CIT(A) ERRED IN DECIDING THAT POWER GENE RATION FROM WINDMILL IS MANUFACTURING ACTIVITY. 4. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE CAN CL AIM DEPRECIATION ON WINDMILL IF ASSESSEE IS ENGAGED IN MANUF ACTURING ACTIVITIES, ALTHOUGH MINDMILL HAS NOT CONNECTION WITH ITS MANUFACTURING BUSINESS. 30. FACTS IN BRIEF ARE THAT THE AO IN THE ASSESSMENT O RDER HELD THAT THE CONCEPT OF MANUFACTURE AND PRODUCTION OF ARTICLE OR T HING AND GENERATION OF POWER AND GENERATION AND MANUFACTURE OF PO WER ARE DIFFERENT CONCEPTS UNDER THE INCOME-TAX ACT. THE FORMER WAS ALLOWED IN RESPECT OF INDUSTRIAL UNDERTAKING SPECIFIED U/S.80IB(2)(III) WH ILE LATTER WAS ALLOWED IN RESPECT OF UNDERTAKING SPECIFIED U/S.80 IA(4)(IV). HE FURTHER NOTED THAT NO EXCISE DUTY IS LEVIABLE ON PRODU CTION OF 14 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 ELECTRICITY PRODUCED BY THE WINDMILL. THEREFORE, LOGICAL INFERENC E IS THAT THERE IS NO MANUFACTURE INVOLVED IN THE PROCESS. FU RTHER, THE SET UP OF THE WINDMILL HAD ABSOLUTELY NO CONNECTION WITH THE AS SESSES BUSINESS OF MANUFACTURE OF TOBACCO, JARDA, ALLIED PRODUCTS A ND LIME. HE ACCORDINGLY HELD THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM ADDITIONAL DEPRECIATION. 31. IN APPEAL THE LD.CIT(A) HELD THAT IN THE ASSESSMENT COMPLETED U/S.143(3) PRIOR TO THE SEARCH THE AO HAD ALLOWED THE ADD ITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE. NO INCRIMINATING MAT ERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE DISALLOWANCE IS NOT BASED ON ANY INCRIMINATING MATERIAL. THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MURALI AGRO PROD UCTS (SUPRA) NO DISALLOWANCE IS CALLED FOR. 32. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 33. AFTER HEARING BOTH THE SIDES, WE FIND THE CLAIM OF THE A SSESSEE REGARDING ADDITIONAL DEPRECIATION WAS ALLOWED BY THE AO IN T HE ASSESSMENT MADE U/S.143(3) ON 29-12-2008 WHICH IS PRIOR TO THE DATE OF SEARCH ON 06-10-2009. THE DISALLOWANCE OF ADDITION AL DEPRECIATION BY THE AO IS NOT BASED ON ANY INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF SEARCH OR POST SEARCH ENQUIR Y. THEREFORE, IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (SUPRA) THE LD.CIT(A) WA S JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE AO. WE AC CORDINGLY UPHOLD THE ORDER OF THE CIT(A) AND THE GROUNDS RAISED B Y THE REVENUE ARE DISMISSED. 15 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 34. EVEN ON MERIT ALSO WE FIND THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. VTM LTD. REPORTED IN 319 ITR 336 HAS HE LD THAT ASSESSEE WHICH WAS MANUFACTURING TEXTILE GOODS AND HAD S ET UP A WINDMILL AFTER 31-03-2002 WAS ENTITLED TO ADDITIONAL DEPRECIAT ION. THE RELEVANT OBSERVATION OF HONBLE HIGH COURT READS AS UNDER (SHORT NOTES) : IN ORDER TO CLAIM THE BENEFIT OF SECTION 32(1)(IIA) OF THE INCOME TAX ACT, 1961, WHAT IS REQUIRED TO BE SATISFIED IS THAT THE NEW MACHINERY OR PLANT SHOULD HAVE BEEN ACQUIRED AND INSTALLED AFTER MARCH 3 1, 2002, BY AN ASSESSEE, WHO WAS ALREADY ENGAGED IN THE BUSINESS OF MANUFA CTURE OR PRODUCTION OF ANY ARTICLE OR THING. THE PROVISION DOES NOT STATE THAT THE SETTING UP OF A NEW MACHINERY OR PLANT, WHICH WAS ACQ UIRED AND INSTALLED AFTER MARCH 31, 2002, SHOULD HAVE ANY OPERATIONAL CO NNECTIVITY TO THE ARTICLE OR THING THAT WAS ALREADY BEING MANUFACTURED BY THE ASSESSEE. 35. THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS.M. SATISH KUMAR ITA NO.718/MDS/2012 ORDER DATED 28-09-20 12 HAS HELD THAT GENERATION OF ELECTRICITY IS AKIN TO MANUFACTURING OF NEW PRODUCT. RELYING ON THE DECISION OF HONBLE SUPREME COUR T IN THE CASE OF CIT VS. MADHYA PRADESH ELECTRICITY BOARD REPORT ED IN 1970 AIR 732 (SC) AND THE DECISION OF THE DELHI BENCH OF TRIBUNAL IN THE CASE OF NTPC LTD. REPORTED IN 2002 (4) (TM) 694 (SC) IT WA S HELD THAT GENERATION OF ELECTRICITY IS A MANUFACTURING ACTIVITY AND TH E ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION U/S.32(1)(IIA). IN VIEW OF THE ABOVE, THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 36. GROUND OF APPEAL NO.5 BY THE REVENUE READS AS UNDER : THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE IS ELIG IBLE TO CLAIM DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR MIN DMILL, ALTHOUGH DEPRECIATION ON ELECTRICAL FITTINGS IS @10% ONLY AS PE R I.T RULES, 1962. 16 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 37. AFTER HEARING BOTH THE SIDES, WE FIND THE AO DISALLOWED DEPRECIATION OF RS.10,17,103/- ON ACCOUNT OF DEPRECIATION CLA IMED ON CIVIL WORKS WHICH WERE INCLUDED IN THE COST OF WINDMILLS. THE AO NOTED FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE THAT ELECTRICAL YARD FENCING AND COST OF TEMPORARY APPROACH ROAD TOTALIN G TO RS.29,06,008/- HAVE BEEN INCLUDED IN THE COST OF WINDMILLS. SIN CE ASSETS HAVE BEEN PUT TO USE FOR LESS THAN 180 DAYS T HE AO ALLOWED DEPRECIATION @5% ON THE ABOVE AMOUNT AND DISALLOWED THE BALANCE DEPRECIATION OF RS.10,17,103/-. 38. IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE TRIB UNAL IN THE CASES OF POONAWALA FINVEST AGRO PVT. LTD. VS. ACIT R EPORTED IN 118 TTJ 68 AND VANAZ ENGINEERING LTD. VS. ADDL.CIT VIDE ITA NO.987/PN/2006 ORDER DATED 31-10-2008 HELD THAT ON PO WER EVACUATION, INFRASTRUCTURE, TRANSFORMER, ERECTION AND COMMIS SIONING OF THE STRUCTURES, LINE WORK, ELECTRICAL ITEMS WILL QUALIFY FOR DEP RECIATION @80% WHEREAS MEDA CHARGES, SITE DEVELOPMENT EXPENSES, C OST OF CONSTRUCTION OF CONTROLLED BEAM, CIVIL WORK, INTERNAL ROAD, DEV ELOPMENT APPLICATION CHARGES, PROFESSIONAL FEES AND BANK CHARGES WILL N OT QUALIFY FOR HIGHER RATE OF DEPRECIATION. SHE ACCORDINGLY D IRECTED THE AO TO VERIFY THESE EXPENSES AND ALLOW DEPRECIATION ON ABOVE ITEMS ACCORDINGLY. 39. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 40. AFTER HEARING BOTH THE SIDES, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS DIRECTED THE AO TO ALLOW THE DEPRECIAT ION IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CASE OF POONAWALA FINVEST 17 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 AGRO PVT. LTD. (SUPRA) AND VANAZ ENGINEERING LTD. (SUPRA). NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE BY THE LD. DEPARTM ENTAL REPRESENTATIVE AGAINST THE ABOVE 2 DECISIONS OF THE TRIB UNAL. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE A ND THE GROUNDS RAISED BY THE REVENUE IS DISMISSED. ITA NO.1151/PN/2013 (A.Y. 2007-08) (BY ASSESSEE) : 41. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN DENYING THE DEDUCTI ON CLAIMED U/S 80IA(4) OF RS.5,36,44,728/-. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN VIE W OF THE PROVISIONS OF SECTION 80AC, THE ASSESSEE CAN CLAIM THE DEDUCTION U/ S 80IA( 4) ONLY IF THE SAME HAS BEEN CLAIMED IN THE RETURN FILED WITHIN THE DUE DATE STIPULATED U/S.139(1) AND SINCE THE SAID CLAIM WAS NOT M ADE IN THE ORIGINAL RETURN FILED U/S 139(1), THE SAME COULD NOT BE ALLOW ED IN THE ASST. U/S 153A. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSE SSEE WAS NOT ENTITLED TO MAKE A FRESH CLAIM IN THE RETURN FILED U/S 153A ON THE GROUND THAT IN THE ASST. U/S 153A, ONLY INCOME WHICH HAD ESCAP ED ASST. COULD BE TAXED AND THE ASSESSEE COULD NOT BE PLACED IN A BETTER POSITION VIS-A-VIS THE INCOME DECLARED IN THE ORIGINAL RETURN. 4] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN THE ASST. U/S 153A, THE ISSUES WHICH HAVE ALREADY ATTAINED FINALITY IN THE ORI GINAL ASST. CANNOT BE DISTURBED UNLESS ANY INCRIMINATING EVIDENCE IS FOUND IN RESPECT OF THE SAME AND SINCE NO SUCH MATERIAL WAS FOUND IN RESPECT OF THE DEDUCTION U/S 80IA(4) CLAIMED IN RESPECT OF WINDMILLS, THE SAID CLA IM OF THE ASSESSEE MADE IN THE ASST. U/S153A WAS NOT ALLOWABLE. 5] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT IN THE ASST. U/S. 153A, THE ASSESSEE COULD MAKE A FRESH CLAIM WHICH WAS NOT MADE IN THE ORIGINAL RETURN AND THERE WAS NO SUCH BAR THAT NO NEW CLAIM CO ULD BE MADE BY THE ASSESSEE IN THE RETURN FILED U/S. 153A. 6] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE ASST. U/S 143(3) HAD NOT TAKEN PLACE FOR THIS YEAR AND HENCE, IN THE ASST. U/S 153A, THE A.O. WAS BOUND TO ASSESS THE TOTAL INCOME OF THE ASSESS EE AND THEREFORE, EVEN THE ISSUES IN RESPECT OF WHICH NO INCR IMINATING EVIDENCE WAS FOUND DURING SEARCH SHOULD HAVE BEEN CONSIDERED IN THE ASST. U/S 153A AND THUS, THE DEDUCTION CLAIMED BY THE ASSESSEE SHOU LD HAVE BEEN ALLOWED. 18 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 7] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING TH AT EACH PHASE OF WIND MILLS WAS TO BE CONSIDERED AS A SEPARATE UNDERTAK ING ELIGIBLE FOR DEDUCTION U/S 80IA AND HENCE, THE DEDUCTION U/S 80IA( 4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PHASES AND NOT O N CONSOLIDATED BASIS. 8] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING TH AT IN VIEW OF THE PROVISIONS OF SECTION 80IA( 5) OF THE INCOME TAX ACT, 1961 THE PROFIT FROM THE ELIGIBLE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S 8 0IA OF THE ACT NEED NOT BE COMPUTED AFTER DEDUCTION OF THE NOTIONAL BRO UGHT FORWARD LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS WHICH HAVE BEEN SET OFF AGAINST OTHER INCOME IN EARLIER YEARS. 8.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE ONLY FROM THE INITIA L ASST. YEAR I.E. THE ASST. YEAR IN WHICH DEDUCTION U/S. 80IA WAS FIRST CLAIMED BY THE ASSESSEE AND ONLY FOR THE YEARS STARTING FROM THE INITIAL ASST. YEA R AND THEREAFTER, THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE AND HENC E, THERE WAS NO REASON TO SET OFF THE NOTIONAL BROUGHT FORWARD LOSSES / DEPRECIATION WHILE COMPUTING THE DEDUCTION U/S. 80IA FOR THE PRESENT ASST. YEAR. 9] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE EX PENDITURE ON ELECTRICAL YARD FENCING AND COST OF PREPARATION OF T EMPORARY APPROACH ROAD WAS NOT PART OF, ACTUAL COST OF THE WIND MILL AN D HENCE, THE DEPRECIATION AT A HIGHER RATE OF 80% WAS NOT ALLOWAB LE IN RESPECT OF SUCH ITEMS. 9.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ABOVE ITEMS WERE PART AND PARCEL OF THE WIND MILL PURCHASED BY THE ASSE SSEE AND THEREFORE, DEPRECIATION @ 80% WAS RIGHTLY CLAIMED BY THE ASSESSEE. 10] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 42. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT GROUNDS OF APPEAL NO.9 AND 9.1 ARE AGAINST THE ASSESSEE FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCOR DINGLY, THE GROUNDS OF APPEAL NO.9 AND 9.1 ARE DISMISSED. 43. GROUNDS OF APPEAL NO.1 TO 6 RELATE TO DENIAL OF DEDUCT ION U/S.80IA(4) AMOUNTING TO RS.5,36,44,728/-. 44. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 30-10-2007 DECLARING TOTAL INCOME AT RS.18,17,42,421/-. IN RESPONSE TO NOTICE U/S.153A THE AS SESSEE FILED 19 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 THE RETURN OF INCOME ON 24-06-2010 DISCLOSING TOTAL INCOME OF RS.12,80,97,695/- AFTER CLAIMING DEDUCTION OF RS.5,36,44,728/-. SINCE THE ASSESSEE HAD NOT CLAIMED THE DEDUCTION U/S.80I A(4) THE AO WAS OF THE OPINION THAT THE ASSESSEE CANNOT MAKE THE FR ESH CLAIM IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A WHICH WAS NOT CLAIMED IN THE ORIGINAL RETURN. ACCORDING TO THE AO THE PERSON W HO IS SEARCHED CANNOT BE PLACED IN A BETTER POSITION AFTER SEARCH BY DE CLARING LESSER INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A T HAN THE INCOME DISCLOSED IN THE ORIGINAL RETURN OF INCOME. HE WAS O F THE OPINION THAT PROCEEDINGS U/S.153A ARE AKIN TO THE PROCEE DINGS U/S.147 SINCE BOTH ASSESSMENTS EMANATE OUT OF REASON S TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT OR A PERSON IS IN POSSESSION OF UNDISCLOSED INCOME. HE RELIED UPON THE DE CISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUN ENGINE ERING WORKS PVT. LTD. REPORTED IN 198 ITR 297 WHEREIN IT HAS BEEN HE LD THAT REASSESSMENT PROCEEDINGS ARE NOT FOR THE BENEFIT OF ASSE SSEE AND THE INCOME FOR THE PURPOSES OF ASSESSMENT CANNOT BE REDUC ED BEYOND THE INCOME ORIGINALLY ASSESSED. HE ALSO RELIED ON THE DECISION O F HONBLE APEX COURT IN THE CASE OF CHETTINAD CORPORATION PVT. LTD . VS. CIT REPORTED IN 200 ITR 300 WHEREIN IT HAS BEEN HELD THAT T HE ASSESSEE COULD NOT CLAIM DEDUCTION WHICH WAS NEITHER CLAIMED NOR ALLOW ED IN THE ORIGINAL ASSESSMENT DURING REASSESSMENT PROCEEDINGS. HE FURTHER HELD THAT THE CLAIM WAS NOT ALLOWABLE IN VIEW OF A SPECIFIC PRO HIBITION U/S.80AC WHEREIN FOR A.Y. 2006-07 AND SUBSEQUENT YEARS N O SUCH DEDUCTION SHALL BE ALLOWED U/S.80IA UNLESS THE ASSESSEE FU RNISHES A RETURN OF HIS INCOME ON OR BEFORE THE DUE DATES SPECIFIED U/S.139(1). THE AO FURTHER REFERRED TO THE SPECIFIC PROVISIONS OF SECTI ON 80IA(5) ACCORDING TO WHICH IN ORDER TO DETERMINE THE QUANTUM O F DEDUCTION 20 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 U/S.80IA(4) THE INCOME OF THE ASSESSEE HAS TO BE COMPUTE D AS IF SUCH ELIGIBLE BUSINESS WAS ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UPTO AND INCLUDING THE ASS ESSMENT YEAR FOR WHICH SUCH DEDUCTION IS CLAIMED. THE AO COMPUTED THE INCOME OF THE YEAR BY CONSIDERING BOTH THE SCENARIOS, I.E. IN A CONSO LIDATED MANNER, BY CONSIDERING ALL WINDMILL UNDERTAKINGS AS A SINGLE UN IT OF AN ELIGIBLE BUSINESS AND ALSO BY CONSIDERING EACH WINDMILL UNDERTAKING AS A SINGLE UNIT OF ELIGIBLE BUSINESS. FROM SUCH CALCULATIONS HE CAME TO THE CONCLUSION THAT THERE ARE LOS SES BOTH ON CONSOLIDATED BASIS AS WELL AS ON INDIVIDUAL BASIS AND THEREFOR E THE QUESTION OF ALLOWING DEDUCTION U/S.80IA(4) OF THE ACT DOES NO T ARISE. HE ALSO PLACED RELIANCE ON THE DECISION OF THE SPECIAL BENC H OF THE TRIBUNAL IN THE CASE OF GOLDMINE SHARES AND FINANCE PVT. LT D. REPORTED IN 113 ITR 209 ACCORDING TO WHICH FOR CONSIDERIN G INITIAL ASSESSMENT YEAR, THE YEAR OF INSTALLATION HAS TO BE NEC ESSARILY ADOPTED RATHER THAN THE FIRST YEAR OF CLAIM IN ORDER TO REJECT THE CLAIM OF THE ASSESSEE. THE AO ACCORDINGLY DISALLOWED THE CLAIM O F DEDUCTION OF RS.5,36,44,728/- U/S.80IA(4). 45. BEFORE CIT(A) THE ASSESSEE APART FROM RELYING ON THE SUBMISSION S MADE IN THE PRECEDING ASSESSMENT YEARS SUBMITTED THAT NO ASSESSMENT U/S.143(3) WAS COMPLETED PRIOR TO THE DATE OF SEARCH. ALTHOUGH THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME HA D NOT CLAIMED ANY DEDUCTION U/S.80IA, HOWEVER, SINCE NO ASSESSMENT H AS TAKEN PLACE IN THIS YEAR, ALL THE ISSUES ARE OPEN FOR ADJUDICATION AND HENCE THE ASSESSEE CAN CLAIM DEDUCTION WHICH WAS NOT CLAIMED IN THE ORIGINAL RETURN. IT WAS ARGUED THAT WHERE NO ASSESSMEN T HAS BEEN 21 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 MADE PRIOR TO THE DATE OF SEARCH, ASSESSEE CAN MAKE A DDITIONAL CLAIM IN THE RETURN FILED U/S.153A. FOR THE ABOVE PROPOSITION, TH E ASSESSEE RELIED ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT REPORTED IN 18 I TR 106 WHEREIN IT HAS BEEN HELD THAT FOR A YEAR FOR WHICH NO AS SESSMENT HAS BEEN MADE PRIOR TO SEARCH ALL THE ISSUES ARE OPEN FOR AD JUDICATION. IT WAS ACCORDINGLY ARGUED THAT ASSESSEE IS ENTITLED TO CLAI M HIGHER DEDUCTION U/S.80IA IN THE RETURN FILED U/S.153A. 46. HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED WITH THE EXPLAN ATION GIVEN BY THE ASSESSEE. SHE NOTED THAT THE ASSESSEE H AS NOT CLAIMED DEDUCTION U/S.80IA IN THE ORIGINAL RETURN FILED PRIOR TO SEAR CH AND THE SAME HAS BEEN CLAIMED IN THE RETURN FILED IN RESPONSE TO N OTICE U/S.153A. THEREFORE, THE ASSESSEE CANNOT MAKE A FRESH C LAIM IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A. FURTHER, THE CLAIM OF THE ASSESSEE IS ALSO OTHERWISE INADMISSIBLE IN VIEW OF THE CLEAR P ROVISIONS OF SECTION 80AC THAT NO DEDUCTION U/S.80IA CAN BE ALLOWED TO AN ASSESSEE FOR THE VERY YEAR, I.E. A.Y. 2006-07 UNLESS THE AS SESSEE FURNISHES RETURN OF INCOME FOR SUCH ASSESSMENT YEAR ON O R BEFORE THE DUE DATE SPECIFIED U/S.139(1). 47. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 48. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED HIS RETURN OF INCOME U/S.139(1) ON 30-10-2007. THE SEA RCH TOOK PLACE ON 06-10-2009. THE ASSESSMENT FOR THIS YEAR WAS PENDING AS ON THE DATE OF SEARCH AND THEREFORE THE SAME GETS ABATED IN VIEW OF SECOND PROVISO TO SECTION 153A. RELYING ON THE DECISION OF THE PUNE 22 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 BENCH OF THE TRIBUNAL IN THE CASE OF B.G. SHIRKE CONSTRUCTIO N TECHNOLOGY PVT. LTD. (SUPRA) HE SUBMITTED THAT THE TRIBUN AL IN THE SAID DECISION HAS HELD THAT THE ASSESSEE CAN MAKE A NEW CLAIM FOR THE ASSESSMENT YEARS WHICH HAVE ABATED SINCE THE AO RETA INS THE ORIGINAL JURISDICTION. ACCORDINGLY, THE ASSESSEE IS ENTITLED TO MAKE A FRESH CLAIM. 49. SO FAR AS THE SECOND OBJECTION OF THE CIT(A) THAT IN VIEW OF THE PROVISIONS OF SECTION 80AC THE ASSESSEE CAN CLAIM THE DED UCTION U/S.80IA(4) ONLY IF THE SAME HAS BEEN CLAIMED IN THE RETURN FILED WITHIN THE DUE DATES STIPULATED U/S.139(1), THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY CONDITION OF SECTION 8 0AC IS THAT THE ASSESSEE MUST HAVE FILED ITS RETURN U/S.139(1). SINCE THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 31-12-2007 (PAGE 49 OF THE PAPER BOOK) WITHIN THE DUE DATE STIPULATED U/S.139(1) THIS CONDITION IS FULFILLED. 50. AS REGARDS THE CONTENTION OF THE REVENUE THAT THE ASSESSEE SHOULD HAVE ALSO MADE THE CLAIM IN THE RETURN FILED U/S.139(1 ) IS CONCERNED HE SUBMITTED THAT THE SAME IS NOT CORRECT. REFERRING TO PROVISIONS OF SECTION 80IA(5) HE SUBMITTED THAT THE ABOVE PROVISION STATES THAT IF THE ASSESSEE HAS NOT MADE ANY CLAIM IN TH E RETURN NO DEDUCTION IS ALLOWABLE. THE SAID SECTION ONLY STATES THAT IF THE ASSESSEE HAS NOT MADE A CLAIM IN THE RETURN NO DEDUCTIO N IS ALLOWABLE. IT DOES NOT STATE THAT THE ASSESSEE SHOULD MAKE THE CLAIM IN THE RETURN FILED U/S.139(1). THEREFORE, EVEN AS PER THIS SECTION, THERE IS NO MERIT IN THE CONTENTION OF THE DEPARTMENT. IN ANY CASE, IN VIEW OF THE DECISION OF THE TRIBUNAL IN THE CASE OF B.G. SHIRKE CONSTRUC TION TECHNOLOGY PVT. LTD. (SUPRA), THE ASSESSEE IS ENTITLED TO M AKE THE CLAIM. SINCE THE ASSESSEE HAS MADE THE CLAIM IN THE RETUR N OF INCOME 23 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 FILED U/S.153A AND THE ASSESSMENT FOR THIS YEAR WAS PENDI NG ON THE DATE OF SEARCH. 51. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE LD.CIT(A). HE SUBMITTED THAT SIN CE THE ASSESSEE HAS NOT MADE THE CLAIM U/S.80IA(4) IN THE ORIGINAL RETURN OF INCOME FILED U/S.139(1), THEREFORE, THE ASSESSEE IS PRECLUDED FROM CLAIMING OF THE SAME IN THE RETURN FILED U/S.153A. HE SUBMITT ED THAT THE ASSESSEE CANNOT BE ALLOWED ANY BENEFIT FOR ITS LAPSES IN THE RETURN FILED U/S.153A OF THE I.T. ACT. HE ACCORDINGLY SUBMITTED TH AT THE ORDER OF THE CIT(A) BE UPHELD ON THIS ISSUE AND THE GROUNDS RAIS ED BY THE ASSESSEE BE DISMISSED. 52. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE ASSESSEE IN THE INS TANT CASE FILED HIS RETURN OF INCOME U/S.139(1) ON 31-10-2007. THE SEA RCH TOOK PLACE ON 06-10-2009. AT THE TIME OF SEARCH THE ASSESSM ENT FOR THE IMPUGNED ASSESSMENT YEAR WAS NOT COMPLETED. THE ASSES SEE FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.153A ON 24- 06-2010 DISCLOSING TOTAL INCOME OF RS.12,80,97,695/- AFTER CLAIMING DEDUC TION OF RS.5,36,44,728/- U/S.80IA(4) OF THE I.T. ACT. THE AO DISALLO WED THE CLAIM OF DEDUCTION U/S.80IA(4) ON THE GROUND THAT THE SAME WAS NOT CLAIMED IN THE ORIGINAL RETURN FILED U/S.139(1) OF THE I.T. AC T. RELYING ON THE PROVISIONS OF SECTION 80AC AND 80IA (5) THE AO DISA LLOWED THE CLAIM MADE BY THE ASSESSEE IN THE RETURN FILED IN RESPONS E TO NOTICE U/S.153A. WE FIND THE LD.CIT(A) UPHELD THE ABOVE ACTION OF THE AO. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF B.G. SHIRKE CONSTRUCTION TECHNOLOGY PVT. LTD. (SUPRA) HAD AN OCCASION T O DECIDE 24 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 SUCH AN ISSUE. THE RELEVANT OBSERVATION OF THE TRIBUNAL FR OM PARA 9 ONWARDS READ AS UNDER : 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN THIS CASE, SEARCH U/S 132(1) OF THE ACT WAS CARRIED OUT ON 18.12.2008. ON THE BASIS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT, WHICH RE ADS AS UNDER :- 'PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INITIA TION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTI ON 132A, AS THE CASE MAY BE, SHALL ABATE.' IN THE PRESENT CASE, THE ASSESSMENTS WHICH ARE PENDING ON THE DATE OF INITIATION OF SEARCH ARE FOR ASSESSMENT YEARS 2007-08 AND 2008-09, AND THUS SUCH ASSESSMENTS ABATE. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT ASSESSMENTS FOR ASSESSMENT YEARS 2003-04 AND 20 06-07 WERE NOT PENDING ON THE DATE OF INITIATION OF SEARC H AND THUS THE SAME DO NOT ABATE AS PER THE AFORESAID PROVISO TO SECTION 153A( 1) OF THE ACT. THE AFORESAID POSITION IS NOT DISPUTED BY THE REVENUE ALSO. 10. IN THE ABOVE UNDISPUTED FACT SITUATION, NOW WE MA Y EXAMINE THE SCOPE OF ASSESSMENTS TO BE MADE U/S 153A(1)(B) OF THE ACT FOR T HE ASSESSMENT YEARS 2007-08 AND 2008-09, WHICH HAVE ABATED AND FOR THE ASSESSMENT YEARS 2003-04 AND 2006-07, WHICH DO NOT ABATE. FOLLO WING THE REASONING LAID DOWN IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LT D. (SUPRA) , IT HAS TO BE HELD THAT IN SO FAR AS THE ASSESSMENT YEARS 2003-04 AND 20 06-07 ARE CONCERNED, ASSESSMENTS U/S 153A(1)(B) OF THE ACT WOULD BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH HAS BEEN EXPLAI NED TO MEAN (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT; AND, (II ) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH . OF COURSE, THE INCOME SO DETERMINED SHALL BE IN ADDITION TO THE INCO ME ALREADY ASSESSED IN REGULAR ASSESSMENT PROCEEDINGS FOR THE SAID TWO ASSESSMEN T YEARS. NOW, THE MOOT POINT IS AS TO WHETHER THE IMPUGNED CLA IM OF THE ASSESSEE FOR EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY CAN FALL IN THE SCOPE AND AN AMBIT OF AN ASSESSMENT MADE U/S 153A(1)(B) OF T HEI.T ACT FOR THE ASSESSMENT YEARS 2003-04 AND 2006-07. OSTENSIBLY, AS OBSERVE D EARLIER ON THE BASIS OF THE DECISION OF SPECIAL BENCH OF TRIBUNA L IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA), AN ASSESSMENT U/S 153 A(1)(B) FOR THE ASSESSMENT YEARS 2003-04 AND 2006-07 WOULD BE BASED ON I NCRIMINATING MATERIAL, BOOKS OF ACCOUNTS, OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSES SMENT OR ANY UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. AT THE TIME OF HEARING, THE LD. COUNSEL FOR ASSESSEE FAIRLY CON CEDED THE POSITION THAT IMPUGNED CLAIM RELATING TO EXCLUSION OF INCOME ON ACCOUNT OF RETENTION MONEY DOES NOT FALL IN THE AFORESAID CATEGO RY AND THUS, IT IS BEYOND THE SCOPE AND AMBIT OF AN ASSESSMENT ENVISAGED U/S 153A(1)(B) OF THE ACT FOR ASSESSMENT YEARS 2003-04 AND 2006-07. THEREF ORE, ON THIS POINT ITSELF, WE UPHOLD THE STAND OF THE REVENUE FOR ASSESSMENT YEARS 2003-04 AND 2006-07 IN DENYING ASSESSEE'S CLAIM FOR EXCL UDING INCOME ON ACCOUNT OF RETENTION MONEY. 25 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 11. ACCORDINGLY, THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2003-04 AND 2006-07 ARE DISMISSED. 12. NOW, IN SO FAR AS THE ASSESSMENTS FOR ASSESSMENT YEARS 2007 -08 AND 2008-09 ARE CONCERNED, THE ORIGINAL ASSESSMENTS WERE PEN DING ON THE DATE OF INITIATION OF SEARCH, AND THE SAME STAND ABATE D IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. FOLLOWIN G THE REASONING LAID DOWN IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SU PRA), IN SO FAR AS ASSESSMENT YEARS 2007-08 AND 2008-09 ARE CONCERNED, THE ASSESSING OFFICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS J URISDICTION CONFERRED ON HIM U/S 153A OF THE ACT. IN THIS CONTEXT, THE PRELIMI NARY ISSUE IS AS TO WHETHER THE SCOPE OF ASSESSMENTS U/S 153A(1)(B) OF THE ACT FOR ASSESSMENT YEARS 2007-08 AND 2008-09 CAN INCLUDE CONSIDER ATION OF ASSESSEE'S PLEA TO EXCLUDE INCOME ON ACCOUNT OF RETENTIO N MONEY, CONSIDERING THE FACT THE RETURNS OF INCOME FILED BY T HE ASSESSEE FOR ASSESSMENT YEARS 2007-08 AND 2008-09 U/S 139(1) OF THE A CT DID NOT CONTAIN ANY SUCH CLAIM. IN THE ASSESSMENTS U/S 153A(1)(B) OF THE ACT, ASSESSEE CLAIMED THAT INCOME ON ACCOUNT OF RETENTION MO NEY BE EXCLUDED IN THE YEARS WHEN THE CUSTOMERS HAD WITHHELD THE RETEN TION MONEY AND INSTEAD TAX IT IN THE YEAR OF ITS ACTUAL RECEIPT. NO DOUBT, THE SAID CLAIM DOES NOT PERTAIN TO ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH, SO HOWEVER, ON ACCOUNT OF THE FACT THAT THE ASSESSING OFFI CER RETAINS HIS ORIGINAL JURISDICTION AS WELL IN THE ASSESSMENTS FOR THE YEARS 2007-08 AND 2008-09 TO BE MADE U/S 153A(1)(B) OF THE ACT, IN OUR CONSIDERED OPINION, AS THE FOLLOWING DISCUSSION WOULD SO, SUCH A CLAIM THOUG H MADE FOR THE FIRST TIME IN THE IMPUGNED ASSESSMENT PROCEEDING, WOULD FALL WITHIN THE AMBIT AND SCOPE OF IMPUGNED ASSESSMENT CARRIED OUT U/S 15 3A(1)(B) OF THE ACT. PERTINENTLY, THE ORIGINAL JURISDICTION VESTE D WITH THE ASSESSING OFFICER FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 EMP OWERS HIM TO CONSIDER THE IMPUGNED CLAIM; AND, TO PUT IT IN OTHER WORDS, ASSESSEE WAS COMPETENT TO RAISE SUCH A FRESH CLAIM IN THE CONTEXT O F THE ORIGINAL JURISDICTION VESTED WITH THE ASSESSING OFFICER, THOUGH IT WAS NOT RAISED IN THE RETURNS OF INCOME ORIGINALLY FILED. 13. WE MAY ALSO CONSIDER THIS FROM ANOTHER ANGLE. AS O N THE DATE OF INITIATION OF SEARCH I.E. 18-12-2008, THE RETURNS OF INCOME FILED BY ASSESSEE U/S 139(1) OF THE ACT FOR ASSESSMENT YEARS 2007-08 AND 2 008-09 WERE PENDING FOR ASSESSMENT AND THE IMPUGNED CLAIMED WAS NOT MADE IN THE RETURNS OF INCOME ORIGINALLY FILED. SO, HOWEVER, U/S 139(5) OF THE ACT, ASSESSEE WAS COMPETENT TO FURNISH A REVISED RETURN AND MAK E SUCH A CLAIM, AND THUS THE ASSESSING OFFICER WAS REQUIRED TO ENT ERTAIN SUCH A CLAIM IN THE COURSE OF EXERCISING HIS ORIGINAL JURISDIC TION TO MAKE AN ASSESSMENT U/S 143(3) OF THE ACT. NOW, CONSEQUENT TO SEARC H ACTION, FOR ASSESSMENT YEARS 2007-08 AND 2008-09, ASSESSING OFFICER NOT ONLY ACQUIRES JURISDICTION TO MAKE ADDITIONS BASED ON THE IN CRIMINATING MATERIAL BUT ALSO RETAINS THE ORIGINAL JURISDICTION, A S EXPLAINED BY THE SPECIAL BENCH OF TRIBUNAL IN THE CASE ALL CARGO GLOB AL LOGISTICS LTD. (SUPRA). THUS, THE ENSUING ASSESSMENTS U/S 153A(1)(B)OF THE ACT FOR ASSESSMENT YEARS 2007-08 AND 2008-09 WOULD ENABLE THE AS SESSING OFFICER TO CONSIDER THE IMPUGNED CLAIM WHICH HAS BEEN JUSTIFIABLY MADE BY THE ASSESSEE. CONSIDERING THE ENTIRETY OF CIRCUMSTANCES A ND IN LAW, WE, THEREFORE, HOLD THAT IN SO FAR AS THE ASSESSMENTS FOR THE ASSESSMENT YEARS A.Y. 2003-04, 2006-07, 2007-08 & 2008-09 2007 -08 AND 2008-09 ARE CONCERNED, THE INCOME-TAX AUTHORITIES ERRED IN N OT ENTERTAINING THE IMPUGNED CLAIM OF THE ASSESSEE MERELY BECAUSE IT WAS MADE IN THE COURSE 26 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 OF AN ASSESSMENT U/S 153A(1)(B) OF THE ACT AND WAS NOT MA DE IN THE RETURNS OF INCOME ORIGINALLY FILED U/S 139(1) OF THE ACT. 14. FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09, ANOTHE R OBJECTION RAISED BY THE REVENUE IS TO THE EFFECT THAT THE CLAIM WAS NOT MADE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/ S 153A(1)(A) OF THE ACT, BUT WAS SUBMITTED BY WAY OF A LETTER DURING THE ASSESSMENT PROCEEDINGS AND THEREFORE FOLLOWING THE DECISION OF T HE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT, (20 06) 284 ITR 323 (SC), THE ASSESSING OFFICER WAS JUSTIFIED IN NOT ENTERTAINING SU CH A CLAIM. 15. ON THIS ASPECT, THE LEARNED COUNSEL FOR THE ASSESSEE P OINTED OUT THAT IN THE RETURN OF INCOME SUBMITTED IN RESPONSE TO NOTICE U/S 153A(1)(A) OF THE ACT, ASSESSEE HAD ENCLOSED A NOTE DATED 14.09.2009, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGE 1 TO 2, PU TTING-FORTH ITS CLAIM FOR EXCLUDING INCOME ON ACCOUNT OF RETENTION MONEY, BUT IN THE COMPUTATION OF INCOME NO SPECIFIC CLAIM WAS MADE BECAUSE THE QUANT IFICATION OF THE CLAIM COULD NOT BE MADE IN THE LIMITED TIME PERIOD ALLOWED TO FILE A RETURN IN RESPONSE TO NOTICE U/S 153A(1)(A) OF THE ACT. IN TH E COURSE OF THE SUBSEQUENT ASSESSMENT PROCEEDINGS, ASSESSEE QUANTIFIED THE CL AIM FOR THE RESPECTIVE ASSESSMENT YEARS AND ALSO FILED COPIES OF THE AG REEMENTS WITH THE CUSTOMERS WHICH CONTAINED THE RELEVANT CLAUSES PERM ITTING RETENTION OF A PORTION OF THE CONTRACT VALUE. IT IS POINTED OU T THAT STRICTLY SPEAKING THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE C ASE OF GOETZE (INDIA) LTD. (SUPRA) IS NOT APPLICABLE IN THE PRESENT CASE AS NO FRESH CLAIM WAS MADE IN THE ASSESSMENT PROCEEDINGS, BUT IT IS A CASE WHER E A CLAIM PUT- FORTH IN THE RETURN OF INCOME WAS ONLY QUANTIFIED DU RING ASSESSMENT PROCEEDINGS AND THUS THE ASSESSING OFFICER OUGHT TO HAVE ENTERTAINED THE IMPUGNED CLAIM. ALTERNATIVELY, IT IS CONTENDED THAT THE CIT(A) ENJOYS PLENARY POWERS OF THE ASSESSING OFFICER, AND FOLLOWING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF JUTE CORPOR ATION OF INDIA LTD. VS. CIT, (1991) 187 ITR 688, THE CLAIM SHOULD HAVE BEEN ENTERTAINED BY HIM AS THE COMPLETE FACTS WERE ON RECORD. IN THIS CONTEXT, THE LEARNED COUNSEL REFERRED TO THE DECISION OF THE PUNE BENCH OF THE TR IBUNAL IN THE CASE OF JAIN IRRIGATION SYSTEMS LTD. VIDE ITA NO.1319/PN/2009 DATED 30.01.2012 WHEREIN THE IMPORT OF THE JUDGMENT OF THE HON'BLE S UPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) HAS BEEN EXPLAINED ON THE BASIS OF THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAI PARABOLIC SPRINGS LTD., (2008) 306 ITR 42 (DEL), IN THE FOLLOWING WORDS :- '5. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS. IN O UR VIEW, THE PLEA OF THE ASSESSEE IS WELL-REASONED, INASMUCH AS THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUP RA) DOES NOT IMPINGE ON THE POWERS OF THE APPELLATE AUTHORITIES TO ENTERTA IN A FRESH CLAIM WHICH WAS HITHERTO NOT PREFERRED BY THE ASSESSEE IN THE RETURN OF INCOME. IN FACT, THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. J AI PARABOLIC SPRINGS LTD. 306 ITR 42 (DEL) SUPPORTS THE PROPOSITION THAT THE DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUP RA) WAS LIMITED TO THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN CLAIM FOR D EDUCTION OTHERWISE THAN BY A REVISED RETURN AND DOES NOT PUT FETTERS ON SU CH POWERS OF THE APPELLATE AUTHORITIES.' 16. ON THE BASIS OF AFORESAID, IT IS SOUGHT TO BE MADE O UT THAT THE CLAIM OF THE ASSESSEE OUGHT TO HAVE BEEN ENTERTAINED BY THE LOWE R AUTHORITIES AND DECIDED ON ITS MERITS. 27 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 17. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE APPEARING FOR THE REVENUE HAS CONTENDED THAT THE LOW ER AUTHORITIES WERE JUSTIFIED IN NOT ENTERTAINING THE IMPUGNED CLAIM AS I T WAS A FRESH CLAIM MADE ONLY DURING THE ASSESSMENT PROCEEDINGS AND NOT IN T HE RETURN OF INCOME. 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUP RA) OPINED THAT A FRESH CLAIM OF THE ASSESSEE CAN BE ENTERTAINED AT THE TI ME OF ASSESSMENT ONLY IF IT IS MADE BY WAY OF A REVISED RETURN OF INCO ME; AND, THE AFORESAID PROPOSITION HAS BEEN INVOKED BY THE INCOME-TAX AUTHOR ITIES IN THE PRESENT CASE TO DENY ASSESSEE'S CLAIM FOR EXCLUSION OF INCOME ON ACCOUNT OF RETENTION MONEY, A CLAIM WHICH WAS MADE DURING THE A SSESSMENT PROCEEDINGS. 19. FACTUALLY SPEAKING, WE FIND THAT IN TERMS OF A C OMMUNICATION DATED 14.09.2009 FILED ALONG WITH THE RETURN OF INCOME FI LED IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT, ASSESSEE INTER-AL IA, STATED AS UNDER :- 'THE BUSINESS OF OUR COMPANY IS TO EXECUTE CONSTRUCTION CONTRACTS. IN RESPECT OF SOME OF THE CONTRACTS EXECUTED BY THE COMPA NY THERE IS A CLAUSE IN THE CONTRACT WHICH ENTITLES THE CUSTOMER TO RETAIN BETWEEN 5% TO 10% OF CONTRACT VALUE TILL THE COMPLETION OF DEFECT LIA BILITY PERIOD CONTAINED IN THE CONTRACT WHICH IS GENERALLY BETWEEN 12 TO 24 MO NTHS AFTER THE COMPLETION OF THE CONSTRUCTION. INADVERTENTLY IN TH E ORIGINAL RETURN FILED THIS AMOUNT WAS NOT EXCLUDED WHILE COMPUTING THE TOTA L INCOME. IN THE SHORT SPAN OF TIME ALLOWED TO US TO FILE THE RETURN U/ S. 153A, THE EXACT QUANTIFICATION OF THE RETENTION MONEY COULD NOT BE WORKED OUT. HENCE WE WILL SUBMIT THE DETAILS THEREOF LATER. BUT FOR THE TI ME BEING, WE SUBMIT THAT THE RETENTION MONEY IN THE VARIOUS CONTRACTS IS NOT TA XABLE IN VIEW OF THE VARIOUS DECISIONS INCLUDING THE DECISIONS CITED BELOW WH EREIN IT IS HELD THAT THE TAXABILITY OF THIS AMOUNT IS TO BE CONSIDERE D IN THE YEAR IN WHICH THIS AMOUNT IS DUE TO THE ASSESSEE FROM THE CONTRACTEE. (A) CIT V ASSOCIATED CABLES P. LTD. (2006) 286 ITR 596 (BOM.) (B) DCIT V SPIRAX MARSHALL LTD. (2007) 109 TTJ (PUNE) 593 (C) NATIONAL HEAVY ENGG. CO. OP. L TD. V DCIT (2007) 105 ITD 485 (PUNE) INADVERTENTLY, IN THE ORIGINAL RETURN OF INCOME THI S AMOUNT WAS NOT CLAIMED AS DEDUCTION. WE REQUEST YOUR HONOUR TO KINDL Y GRANT US APPROPRIATE DEDUCTION WHILE COMPLETING ASSESSMENT. WE SH ALL SUBMIT THE NECESSARY DETAILS AND QUANTIFICATION OF CLAIM DURING THE COURSE OF ASSESSMENT.' 20. THE AFORESAID NOTE CLEARLY DEPICTS THE CLAIM OF T HE ASSESSEE TO THE EFFECT THAT THE RETENTION MONEY IN VARIOUS CONTRACTS RETAINED/DEDUCTED BY THE CUSTOMERS IS NOT TAXABLE; AND, VARIOUS CASE LAWS HAV E ALSO BEEN CITED, INCLUDING THAT OF THE HON'BLE JURISDICTIONAL HIGH CO URT OF BOMBAY IN ASSOCIATED CABLES (P) LTD. (SUPRA) IN SUPPORT OF THE SAID PROPOSITION. OF COURSE, THE CLAIM WAS NOT REFLECTED IN THE ACTUAL CO MPUTATION OF INCOME IN THE ABSENCE OF ITS QUANTIFICATION. DURING THE COURSE O F ASSESSMENT 28 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 PROCEEDINGS, ASSESSEE NOT ONLY QUANTIFIED ITS CLAIM YEAR -WISE BUT ALSO EXPLAINED THE FACTUAL MATRIX OF THE CLAIM BASED ON T HE RELEVANT CLAUSES OF THE CONTRACTS WITH VARIOUS CONTRACTEES/CUSTOMERS, AS IS E VIDENT FROM COPY OF ASSESSEE'S COMMUNICATION TO THE ASSESSING OFFICER PLACED IN THE PAPER BOOK AT PAGES 3-6. IN THIS FACTUAL BACKGROUND, CAN IT BE SAID THAT THE ASSESSEE MADE A FRESH CLAIM DURING THE ASSESSMENT PROCEEDING S SO AS TO FALL WITHIN THE PURVIEW OF THE RATIO LAID DOWN BY T HE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA)? IN OUR VIEW, THE FACT SITUATION IN THE PRESENT CASE IS QUALITATIVELY DIFFERE NT THAN THAT CONSIDERED BY THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE ( INDIA) LTD. (SUPRA). OSTENSIBLY, THE ASSESSEE COMPANY MADE A CLAIM FOR EXCLUDI NG INCOME ON ACCOUNT OF RETENTION MONEY IN THE RETURN OF INCOME ITSELF, THOUGH THE QUANTIFICATION WAS ABSENT, AND THE ACTUAL QUANTIFICAT ION OF SUCH CLAIM WAS MADE DURING THE ASSESSMENT PROCEEDINGS; THUS, SUBSTANTIVELY SPEAKING IT CANNOT BE SAID THAT ASSESSEE MADE A NEW CLAIM DURING ASSES SMENT PROCEEDINGS WHICH WAS NOT MADE IN THE RETURN OF INCOM E. CONSIDERING THE ABOVE FACT SITUATION, IN OUR VIEW, THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN REFUSING TO ENTERTAIN THE IM PUGNED CLAIM BASED ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN TH E CASE OF GOETZE (INDIA) LTD. (SUPRA). 21. IN ANY CASE, THE JUDGEMENT OF THE HON'BLE SUPREM E COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) DOES NOT IMPINGE ON THE P OWERS OF APPELLATE AUTHORITIES TO ENTERTAIN A FRESH CLAIM WHICH WAS HITHE RTO NOT PREFERRED BY THE ASSESSEE IN THE RETURN OF INCOME, AS EXPLAINED BY TH E HON'BLE DELHI HIGH COURT IN THE CASE OF JAI PARABOLIC SPRINGS LTD. (SUPRA). ACCORDINGLY, THERE WAS NO IMPEDIMENT FOR THE CIT(A) TO HAVE ENTER TAINED THE IMPUGNED CLAIM ESPECIALLY WHEN THE REQUIRED FACTS TO ADJUDICAT E THE CONTROVERSY WERE ALREADY ON RECORD. 22. THUS, CONSIDERED IN THE AFORESAID LIGHT, WE FIND N O JUSTIFICATION FOR THE REVENUE TO REJECT ASSESSEE'S IMPUGNED CLAIM FOR ASSESSMENT YEARS 2007- 08 AND 2008-09 ON THE GROUND THAT THE CLAIM WAS MADE BY WAY OF A LETTER DURING THE COURSE OF ASSESSMENTS AND NOT IN THE RETURN O F INCOME. 23. THE THIRD OBJECTION WHICH HAS BEEN RAISED BY THE REVENUE IS IN TERMS OF A DISCUSSION MADE BY THE CIT(A) IN PARA 3.6 OF THE IMPUGNED ORDER. ACCORDING TO THE CIT(A), IF THE CLAIM FOR EXCLUDING RETENTION MONEY WAS ENTERTAINED AND ALLOWED, IT WOULD RESULT IN THE DETE RMINATION OF TOTAL INCOME AT A FIGURE BELOW THE INCOME ORIGINALLY RETU RNED/ASSESSED AND THUS THE SAME WAS NOT PERMISSIBLE. THIS OBJECTION OF THE REVENUE, IN OUR VIEW IS NO BAR TO ENTERTAIN THE AFORESAID CLAIM, KEEP ING IN MIND THE RATIO OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE C ASE OF CIT VS. SHELLY PRODUCTS & ANR., (2003) 261 ITR 367 (SC) AND ALSO THE JUDGEMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT GA S CO. LTD. VS. CIT, 245 ITR 54 (GUJ). 24. ON THE BASIS OF THE AFORESAID DISCUSSION, IN CONCLUSIO N WE HOLD THAT IN SO FAR AS THE ASSESSMENT YEARS 2007-08 AND 2008-09 ARE CON CERNED, THE CLAIM OF THE ASSESSEE FOR EXCLUSION OF INCOME ON ACCOUNT RETENTION MONEY WITHHELD BY CONTRACTEES/CUSTOMERS HAS BEEN WRONGLY REJE CTED BY THE LOWER AUTHORITIES. 29 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 53. SINCE THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT Y EAR WAS PENDING ON THE DATA OF SEARCH, THEREFORE, RESPECTFULLY FOLLOW ING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL CITED (SUPR A) WE HOLD THAT THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE CLAIM MAD E U/S.80IA(4) OF THE I.T ACT MERELY BECAUSE THE ASSESSEE HAD NOT MADE THE CLAIM IN THE ORIGINAL RETURN. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUNDS RAISED BY THE ASSESSE ARE ALLOWED. 54. GROUND OF APPEAL NO.7 RELATES TO METHODOLOGY OF COMPU TATION OF DEDUCTION U/S.80IA(4) AS ADOPTED BY THE AO BY CONSIDERIN G DIFFERENCE PHASES OF WINDMILLS AS SEPARATE UNDERTAKING. THE LD.CIT(A) FOLLOWING HIS ORDER FOR A.Y. 2005-06 HELD THAT IN A FRESH CLAIM MADE B Y THE ASSESSEE UNLESS IT IS SUPPORTED BY SOME INCRIMINATING MATE RIAL FOUND DURING THE COURSE OF SEARCH THE CLAIM CANNOT BE ENTERTA INED DURING PROCEEDINGS U/S.153A. HE ACCORDINGLY DISMISSED THE ABOVE GROUND RAISED BY THE ASSESSEE. 55. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE D ECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF J-SONS FOUNDRY PVT. LTD. VS. DCIT AND VICE VERSA VIDE CONSOLIDATED ORDER DATED 30-01 -2013 FOR A.Y. 2007-08 AND 2008-09 HE SUBMITTED THAT THE TRIBUNAL IN T HE SAID DECISION HELD THAT EACH WINDMILL IS TO BE CONSIDERATE AS A S EPARATE UNDERTAKING. 56. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 57. AFTER HEARING BOTH THE SIDES, WE FIND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF J-SONS FOUNDRY PVT. LTD. (SUPRA) WH ILE 30 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 DISMISSING THE GROUNDS RAISED BY THE REVENUE ON THIS ISSU E HAS OBSERVED AS UNDER : 15. AGAINST THE DECISION OF THE LD. CIT(A), THE REVENUE I S IN APPEAL BEFORE US. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES A ND PERUSED THE RECORD. ADMITTEDLY, THE ASSESSEE IS POWER GENERAL THROUG H THE WIND MILLS AT 3 DIFFERENT LOCATIONS I.E. IN TAMILNADU, PANCHGA NI AND SATARA. THE WIND MILLS ARE COMMISSIONED AND ERECTED IN DIFFERENT ASSESSMENT YEARS AS NOTED BY THE AUTHORITIES BELOW. ASSESSEE IS MAINTAINING SE PARATE BOOKS OF ACCOUNTS IN RESPECT OF 3 WIND MILLS AND WORKING OUT TH E 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. 200 7-08 AND ASSESSEE DID NOT OPT FOR CLAIMING THE DEDUCTION U/S 80IA(2) O F THE ACT. SO FAR AS A.Y. 2008-09 IS CONCERNED, ASSESSEE OPTED FOR CLAIMING THE DE DUCTION U/S 80IA(2) TREATING THE SAID ASSESSMENT YEAR (A.Y.) AS AN IN ITIAL 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 MILL S AT THE 3 LOCATIONS ARE INDEPENDENTLY OPERATED AND THE FINANCI AL RESULTS ARE SEPARATELY WORKED OUT. AS PER SUB-SEC.(5) OF SECTION 80I A, 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 FOLLOWE D BY THE LD. CIT(A). THE TERM 'BUSINESS' USED IN SUB-SEC.(5) SECTION 8 0IA IN OUR HUMBLE OPINION IS CONFINED TO THE INDEPENDENT UNDERT AKING AND CANNOT GET MERGED WITH THE OTHER BUSINESSES. IN SEC. 80IA(2), FOR CLAIMING DEDUCTION 'UNDERTAKING' OR 'ENTERPRISE' AS SUCH IS TO B E CONSIDERED. SEC.80IA(2) IS CHARGING SECTIONS FOR DETERMINING BASIC ELIGIBILITY AND THERE IS NO MENTION OF WORD 'BUSINESS'. SUB-SEC.(5) OF SEC.801 A SPEAKS OF BUSINESS BUT SAME IS TO BE CONSTRUED AS BUSINESS OF 'UNDERTAK ING' OR 'ENTERPRISE' AS REFERRED TO IN SUB-SEC.(2) OF SEC.80IA . IT IS WELL SETTLED PRINCIPLE OF INTERPRETATION OF STATUTORY PROVISION TH AT THEY ARE TO BE INTERPRETED HARMONIOUSLY TO MAKE WORKABLE TO GIVE IN TENDED RESULTS. HENCE, AS RIGHTLY HELD BY LD. CIT(A) TERM 'BUSINESS' USE D IN SEC.80IA(5) IS TO BE CONSTRUED AND UNDERSTOOD TO MEAN 'BUSINESS' OR UN DERTAKING OR ENTERPRISE. IN OUR OPINION, THE LD.CIT(A) IN HIS WE LL REASONED ORDER HAS RIGHTLY HELD THAT EVERY UNIT CONSTITUTE A SEPARATE UN DERTAKING 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. ACCORDING LY, THE SAME ARE CONFIRMED AND GROUNDS TAKEN BY THE REVENUE ARE DISMISSE D. 58. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BEN CH OF THE TRIBUNAL CITED (SUPRA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE HOLD THAT EACH PHASE OF WINDM ILL HAS TO BE CONSIDERED AS SEPARATE UNDERTAKING ELIGIBLE FOR DEDUCTION U /S.80IA 31 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 AND THEREFORE DEDUCTION U/S.80IA(4) SHOULD HAVE BEEN COMP UTED INDEPENDENTLY FOR EACH PHASE AND NOT ON CONSOLIDATED BA SIS. THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE IS ACCORDINGLY ALLOWED. 59. GROUNDS OF APPEAL NO.8 TO 8.1 RELATES TO WHETHER INITIA L ASSESSMENT YEAR U/S.80IA(5) MEANS YEAR OF INSTALLATION OF WIN DMILL OR YEAR IN WHICH THE CLAIM OF DEDUCTION U/S.80IA IS FIRST MADE. 60. AFTER HEARING BOTH THE SIDES, WE FIND THE AO AT PARA 4.8.1 OF THE ORDER HELD THAT AS PER THE PROVISIONS OF SECTION 80IA(5) FOR DETERMINING THE QUANTUM OF ELIGIBLE DEDUCTION UNDER SUB-SECTION 80IA(4 ) OF THE I.T. ACT, THE INCOME OF SUCH ASSESSEE IS TO BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WAS THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELATING TO INITIAL ASSESSMENT YEAR AND TO E VERY SUBSEQUENT ASSESSMENT YEAR UPTO AND INCLUDING THE ASS ESSMENT YEAR FOR WHICH THE DETERMINATION IS TO BE MADE. CONSIDERING ALL WINDMILL UNDERTAKINGS AS ONE SINGLE UNIT OF ELIGIBLE BUSINESS OF THE ASSESSEE THE AO PREPARED A CHART FOR DIFFERENT ASSESSMENT YEARS AND CAME TO THE CONCLUSION THAT THE CUMULATIVE LOSS IF RS.73,49,07,073/- ON A CONSOLIDATED BASIS. SUCH CUMULATIVE INCOME IS ALSO NEGATIVE ON SEPARATE UNDERTAKING BASIS FOR EACH UNDERTAKING, I.E. SATAR A-I, SATARA- II, SATARA-III AND RAJASTHAN FOR WHICH THE ASSESSEE HA S CLAIMED DEDUCTION. HE FURTHER NOTED THAT THE MAJOR BONE OF CO NTENTION BETWEEN THE ASSESSEE AND THE REVENUE IS THE ISSUE OF IN ITIAL ASSESSMENT YEAR AS ENVISAGED IN SECTION 80IA(5) OF THE I .T. ACT. ASSESSEE TREATS THE FIRST YEAR OF ITS CLAIM AS INITIAL ASSESSMENT YEAR AND THEREBY COMPUTES ITS QUANTUM DEDUCTION U/S.80IA(4) OF THE ACT. HOWEVER, THE PROVISIONS MAKE IT CLEAR THAT ASSESSEE IS E LIGIBLE FOR DEDUCTION U/S.80IA(4) ONLY WHEN PROFITS AND GAINS FROM WIND MILLS 32 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 EXCEED THE ACCUMULATED DEPRECIATION ON SUCH WINDMILLS. HE , THEREFORE, WAS OF THE OPINION THAT THE YEAR OF INSTALLATION H AS TO BE NECESSARILY TREATED AS INITIAL ASSESSMENT YEAR IN ORDER T O ARRIVE AT QUANTUM OF ELIGIBLE DEDUCTION U/S.80IA(4) IN ACCORDANCE WITH S ECTION 80IA(5) OF THE I.T. ACT. 61. FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUN AL IN THE CASE OF GOLDMINE SHARES AND FINANCE PVT. LTD. REPORTE D IN 113 ITD 209 THE AO HELD THAT FOR CONSIDERING THE INITIAL ASSESSMENT YEAR, THE YEAR OF INSTALLATION HAS TO BE NECESSARILY ADOPTED RATHER THAN THE FIRST YEAR OF CLAIM. HE ACCORDINGLY REJECTED THE CLAIM OF THE A SSESSEE AMOUNTING TO RS.5,36,44,728/-. IN APPEAL THE LD.CIT(A) UPHE LD THE ACTION OF THE AO. 62. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA ESTATE STUD & AGRO FARM PVT. LTD. REPORTED IN 136 TTJ (PUNE) 236 FOLLOW ING THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAY UDHASWAMY SPINNING MILLS PVT. LTD. REPORTED IN 340 ITR 477 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, THIS BEING A COVERED MATTER THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE ALLOWED. 63. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 64. AFTER HEARING BOTH THE SIDES, WE FIND THE ISSUE AS TO WHETHER INITIAL ASSESSMENT YEAR U/S.80IA(5) MEANS YEAR OF INSTALLATION OF WINDMILL OR YEAR IN WHICH THE CLAIM OF DEDUCTION U/S.80IA IS FIRS T MADE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALLA ESTATE STU D & AGRO 33 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 FARM PVT. LTD. FOLLOWING THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS PVT. LTD. HAS OBS ERVED AS UNDER : 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE F ACTUAL MATRIX OF THE CASE AND ORDERS OF THE REVENUE AND THE PAPER BOOK . WE HAVE ALSO EXAMINED THE LEGAL POSITION ON THE MATTER. BEFORE AD JUDICATING THE ISSUE IN QUESTION, IT IS NECESSARY TO EXAMINE THE SCOPE OF THE PR OVISIONS RELATING TO THE INITIAL ASSESSMENT YEAR : '80-IA. DEDUCTIONS IN RESPECT OF PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKINGS OR ENTERPRISES ENGAGED IN INFRASTRUCTURE D EVELOPMENT, ETC. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS OF AN INDUSTRIAL UNDERTA KING OR AN ENTERPRISE REFERRED TO IN SUB-S. (4) (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN A CCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, I N COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO HUNDRED PER CENT OF PROFITS AND GAIN S DERIVED FROM SUCH BUSINESS FOR THE FIRST FIVE ASSESSMENT YEARS COMMENCING AT ANY TIME DURING THE PERIODS AS SPECIFIED IN SUB-S. (2) AND THERE AFTER, TWENTY-FIVE PER CENT OF THE PROFITS AND GAINS FOR FURTHER FIVE ASSESSMENT YEARS : PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY, THE PROVI SIONS OF THIS SUB- SECTION SHALL HAVE EFFECT AS IF FOR THE WORDS TWENTY- FIVE PER CENT; THE WORDS THIRTY PER CENT HAD BEEN SUBSTITUTED. (2) THE DEDUCTION SPECIFIED IN SUB-S. (1) MAY, AT THE OPTION OF THE ASSESSEE, BE CLAIMED BY HIM FOR ANY TEN CONSECUTIVE ASSESSMENT YEA RS OUT OF FIFTEEN YEARS BEGINNING FROM THE YEAR IN WHICH THE UNDERTAKI NG OR THE ENTERPRISE DEVELOPS AND BEGINS TO OPERATE ANY INFRASTRUCTURE FAC ILITY OR STARTS PROVIDING TELECOMMUNICATION SERVICE OR DEVELOPS AN IN DUSTRIAL PARK OR GENERATES POWER OR COMMENCES TRANSMISSION OR DISTRIBUTION OF POWER : PROVIDED THAT WHERE THE ASSESSEE BEGINS OPERATING AND M AINTAINING ANY INFRASTRUCTURE FACILITY REFERRED TO IN CL. (B) OF EX PLANATION TO CL. (I) OF SUB-S. (4), THE PROVISIONS OF THIS SUB-SECTION SHALL HAVE EFFECT AS IF FOR THE WORDS FIFTEEN YEARS, THE WORDS TWENTY YEARS HAD BEEN SUBST ITUTED...............' 14. FROM THE ABOVE PROVISIONS OF SUB-S. (2) OF S. 80-IA OF THE ACT, IT IS EVIDENT THAT THE ASSESSEE IS GRANTED THE OPTION TO SELECT INITIAL ASSESSMENT YEAR I.E., FIRST ASSESSMENT YEAR OF THE ANY TEN CONSECU TIVE ASSESSMENT YEARS OUT OF FIFTEEN YEARS. STARTING ASSESSMENT YEAR FOR COUNTING THE DURATION OF FIFTEEN YEARS IS ALSO PROVIDED IN THE SAID SUB-SECTION. AS PER THESE PROVISIONS, THE ASSESSEE IS NOT ALLOWED TO JUMP THE A SSESSMENT YEAR ONCE AN INITIAL ASSESSMENT YEAR IS OPTED. THEREFORE, WE FIND NO FAULT WITH THE ASSESSEE IN SELECTING THE ASST. YR. 2004-05 AS THE INI TIAL ASSESSMENT YEAR. IN THIS REGARD I.E., ON THE ISSUE OF ASSESSEES OPT ION TO SELECT THE INITIAL ASSESSMENT YEAR, WE HAVE PERUSED THE CITATION S RELIED UPON BY THE ASSESSEES COUNSEL. THE CONCLUSION BY THE TRIBUNAL MUMBAI BENCH DECISION IN ITA NO. 4620/MUM/2007 (ASST. YR. 2004-05) IN THE CASE OF DY. CIT VS. USHDEV INTERNATIONAL LTD., IS STRAIGHT ON THIS ISSUE OF INITIAL 34 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 ASSESSMENT YEAR AND THE OPTION TO THE ASSESSEE AND THE HEL D PORTION OF THE DECISION READS AS UNDER : 'IN VIEW OF THE ABOVE LEARNED CIT(A)S ORDER TO THE EXTENT OF HOLDING THAT INITIAL ASSESSMENT YEAR AND SUBSEQUENT SUCCEEDING ASSESSMENT Y EARS CAN ONLY BE CONSIDERED FOR THE PURPOSE OF COMPUTING DEDUC TION UNDER S. 80-IA. COMING TO THE FACTS OF THE CASE, HOWEVER, AS SEEN FROM THE SCHEDULE OF DETAILS AVAILABLE IN THE LEARNED CIT(A)S ORDER THE A SSESSEE HAS INCURRED LOSSES IN THE ASST. YRS. 1997-98 AND 1998-99 ONLY. SUBSEQU ENTLY IN ALL THE YEARS THERE WERE PROFITS TILL ASST. YR. 2004-05. IT IS N OT CLEAR WHETHER THE ASSESSEE HAS CLAIMED ANY DEDUCTION IN EARLIER YEARS UNDER S. 80-IA. THIS BEING THE 8TH YEAR OF STARTING THE PROJECT, ASSESSEE W OULD BE LEFT WITH ONLY ANOTHER 7 YEARS OF CLAIM OUT OF THE 10 YEARS AVAILABL E TO THE ASSESSEE. CONSIDERING THIS WE ARE OF THE OPINION THAT THE INITI AL ASSESSMENT YEAR IS TO BE DETERMINED ON THE BASIS OF THE YEAR THE ASSESSEE CHOOSE TO CLAIM THE DEDUCTION FOR THE FIRST TIME........' 15. WHEN THE STATUTE HAVE GRANTED THE OPTION TO CHOO SE THE INITIAL ASSESSMENT YEAR AND WHEN THE ASSESSEE HAS SO CHOSEN THE CURREN T ASSESSMENT YEAR AS THE INITIAL ASSESSMENT YEAR AND WHEN THE ASSESSEE ACCORDINGLY PAID THE TAXES ON THE PROFITS OF THE WIND MILL ACTIVITY IN THE EARLIER YEARS AS PER THE STATUTE, THE AOS DECISION TO T HRUST THE INITIAL ASSESSMENT YEAR ON THE ASSESSEE IS NOT IN TUNE WITH THE PROV ISIONS OF S. 80- IA(2) OF THE ACT. ACCORDINGLY, WE ARE OF THE OPINIO N, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE INITIAL ASSESSMENT YEAR FOR T HE PURPOSES OF S. 80- IA(2) R/W S. 80-IA(5) WAS THE YEAR IN WHICH THE ASSESSEE STARTED GENERATING THE ELECTRICITY. THEREFORE, THE ORDER OF THE CIT(A) HAS TO BE REVERSED ON THIS ISSUE. IT IS CLEAR THAT THE INITIAL ASSE SSMENT YEAR FOR THE ABOVE PURPOSES WAS THE FIRST YEAR IN WHICH THE ASSESSEE CLA IMED THE DEDUCTION UNDER S. 80-IA(1) AFTER EXERCISING HIS OPTIO N AS PER THE PROVISIONS OF S. 80-IA(2) OF THE ACT. CONSEQUENTLY, THE ASSESSEE IS ENTITLED TO CLAIM THE DEDUCTION OF RS. 25,44,326 UNDER S. 80-I A IN RESPECT OF THE PROFITS FROM THE WINDMILL ACTIVITY. ACCORDINGLY, THE CLARIFICATORY GROUND RAISED IS ALLOWED. IN THE RESULT, ADJUDICATION OF THE GROUNDS 3 AND 4 RAISED IN THE APPEAL IS MERE ACADEMIC AND HENCE THEY ARE DI SMISSED AS INFRUCTUOUS. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 65. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BEN CH OF THE TRIBUNAL CITED (SUPRA) AND IN ABSENCE OF ANY CONTRA RY MATERIAL BROUGHT TO OUR NOTICE WE HOLD THAT THE PROVISIONS OF SEC TION 80IA(5) ARE APPLICABLE ONLY FROM THE INITIAL ASSESSMENT YEAR, I.E. THE ASSE SSMENT YEAR IN WHICH DEDUCTION U/S.80IA WAS FIRST CLAIMED BY THE A SSESSEE AFTER EXERCISING HIS OPTION AS PER THE PROVISIONS OF SECTION 80IA(2) OF THE ACT. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED. 35 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 66. IN GROUNDS OF APPEAL NO. 9 TO 9.1 THE GRIEVANCE OF T HE ASSESSEE IS REGARDING DENIAL OF CLAIM OF HIGHER RATE OF DEPRECIATION IN RES PECT OF COST OF ELECTRICAL FENCING AND TEMPORARY APPROACH ROAD. 67. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT THE ISSUE STANDS DECIDED AGAINST THE ASSESSEE BY THE D ECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA FINVEST AND AGRO PVT. (SUPRA). IN VIEW OF THE ABOVE, GROUNDS OF APPEAL NO. 9 TO 9.1 BY THE ASSESSEE ARE DISMISSED. 68. GROUND OF APPEAL NO.10 BEING GENERAL IN NATURE IS DISMISSED. ITA NO.1185/PN/2013 (2007-08) (BY REVENUE) : 69. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. THE LD.CIT(A) ERRED IN DECIDING THAT NO ADDITIO N CAN BE MADE U/S.153A, IF THE SAME IS NOT IN ASSESSMENT U/S.143(3) OF THE ACT AND IF IT IS NOT BASED ON ANY INCRIMINATING SEIZED MATERIALS PERTAI NS TO SUCH A.Y. 2. THE LD.CIT(A) ERRED IN DECIDING THAT POWER GENER ATION FROM WINDMILL IS MANUFACTURING ACTIVITY. 3. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE CAN CL AIM ADDITIONAL DEPRECIATION ON WINDMILL IF ASSESSEE IS ENGAGED IN MANUF ACTURING ACTIVITIES, ALTHOUGH WINDMILL HAS NO CONNECTION WITH ITS MANUFACTURING BUSINESS. 4. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE IS ELIG IBLE TO CLAIM DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR WIN DMILL, ALTHOUGH DEPRECIATION ON ELECTRICAL FITTINGS IS @10% ONLY AS PE R I.T. RULES, 1962. 5. THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY O R ALL THE GROUNDS OF APPEAL. 70. SO FAR AS GROUND OF APPEAL NO.1 IS CONCERNED WE FIND N O ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE I.T. ACT. THE LD.CIT(A) HAS ALSO NOT DELETED ANY ADDITION MADE FOR THIS YEAR ON T HE GROUND THAT NO ADDITION CAN BE MADE WITHOUT ANY INCRIMINATING EVI DENCE. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THIS GROUND 36 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 RAISED BY THE REVENUE IS DEVOID OF ANY MERIT. ACCORDINGLY , THE ABOVE GROUND IS DISMISSED. 71. GROUNDS OF APPEAL NO.2 AND 3 BY THE REVENUE RELATES TO ADDITIONAL DEPRECIATION ON THE COST OF WINDMILLS INSTALLED. 72. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS HELD THAT ADDITIONAL DEPRECIATION IS AVAILABLE ONLY TO AN ASSESSEE ENGAGED IN MANUFACTURE OF PRODUCTIO N OF ARTICLE OR THING. SINCE THE ASSESSEE WAS GENERATING POWER AND NOT PRODUCING THE POWER FROM WIND ENERGY, THE CLAIM OF ADDITIONAL DEPRECIATION MADE BY THE ASSESSEE IS NOT ALLOWABLE. ACCORDING TO THE AO, THE S ET UP OF A WINDMILL HAD ABSOLUTELY NO CONNECTION WITH THE ASSESSEES MAIN BUSINESS OF TOBACCO. THE ASSESSEE WAS ALREADY ENJOYING THE BENEFIT OF DEPRECIATION AT A HIGHER RATE AND BY CLAIMING FURTHER ADDIT IONAL DEPRECIATION THE ASSESSEE WOULD DERIVE DOUBLE BENEFIT WHICH IS NOT PERMISSIBLE UNDER THE ACT. IN VIEW OF THE ABOVE, THE AO R EJECTED THE CLAIM OF ADDITIONAL DEPRECIATION AT RS.91,23,658/-. 73. IN APPEAL THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESS EE BY OBSERVING AS UNDER : 7.1 THE APPELLANT HAS STATED THAT SINCE THE ISSUE IS SIMI LAR TO GROUNDS NO.20 TO 20.5 TO A.Y. 2006-07, IT PLACES RELIANCE O N SUBMISSIONS MADE FOR THAT YEAR. HOWEVER, THE FACTS FOR A.Y. 2006-07 ARE DISTINGUISHABLE IN AS MUCH AS THE CLAIM FOR ADDITIONAL DEPRECIATION WAS MAD E IN THE ORIGINAL RETURN FILED AND ALLOWED BY THE ASSESSING OFFICER IN TH E ORIGINAL PROCEEDINGS U/S.143(3). FOR THE IMPUGNED YEAR, THE A PPELLANT DID MAKE A CLAIM IN THE ORIGINAL RETURN BUT THE SAME HAS NOT BE EN EXAMINED BY THE ASSESSING OFFICER U/S.143(3). FOLLOWING THE BOMBAY SPEC IAL BENCH DECISION IN ALL CARGO GLOBAL LOGISTICS LTD., 137 ITD 2 87 IT IS HELD THAT REASSESSMENT___ THE ASSESSING OFFICER ON THIS ISSUE IS POSSIBLE. AT THE SAME TIME, THE ISSUE IS DECIDED IN FAVOUR OF THE APPEL LANT IN VIEW OF THE JURISDICTIONAL ITAT DECISION ON ITA NO.823/PN/2011 DA TED 27-08-2012 IN THE CASE OF SHRI ANINASH NIVRUTTI BHOSALE. IT IS TO AL SO SEEN THAT THE MADRAS HIGH COURT DECISION IN THE CASE OF V.T.M. LTD REPORTE D IN ITR 336 IS SQUARELY ON THE RELATED GROUND THAT HAS BEEN TAKEN BY THE ASSESSING OFFICER FOR DENIAL OF ADDITIONAL DEPRECIATION THAT EVEN IF THE WINDMILL HAS 37 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 NO CONNECTION WITH THE BUSINESS OF MANUFACTURE CARRIED OUT BY THE ASSESSEE (IN THIS ___ MANUFACTURE OF JARDA), IT IS ENTI TLED TO CLAIM ADDITIONAL DEPRECIATION ON THE COST OF THE WINDMILL. GROUNDS N O. 13 TO 13.6 ARE THEREFORE, TREATED AS ALLOWED. 74. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 75. AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF AVINASH NIVRUTTI BHOSALE (SUPRA) AS WELL AS THE DECISION OF HONBLE MUMBAI HIGH COURT IN THE CASE OF V.T.M. LTD. (SUPRA) . FURTHER, WE HAVE ALREADY DEC IDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN ITA NO.1184/PN/2013 FO R A.Y. 2006- 07 AND THE GROUND RAISED BY THE REVENUE ON THIS ISSUE HAS BEEN DISMISSED. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENU E ARE DISMISSED. 76. IN GROUND OF APPEAL NO.4 THE REVENUE HAS CHALLENGED THE ORDER OF THE CIT(A) IN ALLOWING DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR WINDMILLS. 77. AFTER HEARING BOTH THE SIDES, WE FIND THE AO ALLOWED DE PRECIATION @10% AS PER I.T. RULES ON ELECTRICAL FITTINGS USED FOR WINDM ILLS. IN APPEAL THE LD.CIT(A) HELD THAT THE ASSESSEE IS ELIGIBLE TO CLA IM DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR WINDMILLS. WH ILE DOING SO, HE RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALLA FINVEST & AGRO PVT. LTD. (SUPRA). 78. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 38 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 79. AFTER HEARING BOTH THE SIDES, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). WE FIND THE LD.CIT(A) AT PARA 6.3 IN THE ORDER FO R A.Y. 10- 11 WHICH HAS BEEN FOLLOWED IN THIS YEAR HAS OBSERVED AS UNDER : 6.3 ON CAREFUL CONSIDERATION, I FIND THAT THE ABOVE ISSUE HAS BEEN DEALT ELABORATELY BY THE JURISDICTIONAL TRIBUNAL IN THE C ASE OF POONAWALLA FINVEST & AGRO PVT. LTD. VS. ACIT REPORTED IN 118 TTJ (PUNE) 68 : 2008 12 DTR 211 AND VANAZ ENGINEERING LTD. VS. ADDL.CIT, RANGE-7 IN ITA NO.987/PN/2006 A.Y. 03-04 DATED 31-10-2008. IN VIEW OF THE ABOVE, I DO NOT FIND ANY REQUIREMENT TO CONSIDER OTHER JUDGMENTS RELIED UPON B Y THE APPELLANT AS THE HONBLE TRIBUNAL, PUNE A BENCH HAS ALREADY CON SIDERED THESE ASPECTS WHILE GIVING THE JUDGMENT ON THE ABOVE ISSUE IN THE A BOVE REFERRED CASES. IN THE CASE OF POONAWALLA FINVEST & AGRO PVT. LTD., T HE HONBLE TRIBUNAL HAS HELD THAT THE CIVIL WORK OF CONTROL ROOM, SITE DE VELOPMENT AND INTERNAL ROADS ADJUNCT TO A WINDMILL GENERATING ELECTRICITY I S NOT ENTITLED TO 100%B DEPRECIATION AS A WINDMILL BUT TRANSFORMER UPTO DP ST RUCTURE BEING GADGET FOR TRANSMISSION OF POWER GENERATED BY WINDMILL IS ENTITLED TO 100% DEPRECIATION. SIMILARLY, IN THE CASE OF VANAZ ENGINEERING LTD. ALSO WHEREIN THE PRINCIPLE LAID IN POONAWALLA FINVEST & A GRO PVT. LTD. WAS FOLLOWED, IT WAS HELD THAT CLAIM OF DEPRECIATION IN RESPECT OF PLANT AND MACHINERY AND ELECTRICAL FITTINGS IS ALLOWED AND THE CLAIM OF DEPRECIATION IN RESPECT OF BUILDING IS REJECTED. FOLLOWING THE SA ME, I AM OF THE OPINION THAT THE DEPRECIATION ON POWER EVACUATION INFRASTRUC TURE, TRANSFORMER, ERECTION AND COMMISSIONING OF THESE STRUCTURES, LIKE WO RK, ELECTRICAL ITEMS WILL QUALIFY FOR DEPRECIATION @80% WHEREAS MEDA CHAR GES, SITE DEVELOPMENT EXPENSES, COST OF CONSTRUCTION OF CONTROL ROOM, CIVIL WORK, INTERNAL ROAD DEVELOPMENT, APPLICATION CHARGES, PROF ESSIONAL FEES, AND BANK CHARGES WILL NOT QUALIFY FOR HIGHER RATE OF DEP RECIATION. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THESE EXPENSES AND ALLOW AS PER ABOVE ITEMS ACCORDINGLY. SINCE THE DISALLOWANCE FOR EARLIER A.YRS. 2006-07 TO 2009-10 HAVE BEEN PARTLY CONFIRMED SUBJECT TO TH E QUANTIFICATION AS PER THE ABOVE REMARKS, THE APPELLANT GETS CONSEQUENTIAL R ELIEF. GROUNDS NO. 11 TO 11.2 THEREFORE, IS PARTLY ALLOWED, SUBJECT TO T HE ABOVE REMARKS. 80. SINCE THE LD.CIT(A) WHILE ALONG HIGHER RATE OF DEPRECIATIO N ON ELECTRICAL FITTINGS USED FOR WINDMILL HAS FOLLOWED THE DECISION OF T HE COORDINATE BENCH OF THE TRIBUNAL, THEREFORE, IN ABSENCE OF A NY CONTRARY MATERIAL, WE FIND NO INFIRMITY ON THIS ISSUE. ACCORDIN GLY, GROUND RAISED BY THE REVENUE IS DISMISSED. ITA NO.1152/PN/2013 (A.Y. 2008-09) (BY ASSESSEE) : 81. GROUNDS OF APPEAL NO. 1TO 6 BY THE ASSESSEE READ AS UNDER : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER - 39 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN DENYING THE DEDUCTI ON CLAIMED U/S 80IA(4) OF RS.5,49,98,855/-. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN VIE W OF THE PROVISIONS OF SECTION 80AC, THE ASSESSEE CAN CLAIM THE DEDUCTION U/ S 80IA( 4) ONLY IF THE SAME HAS BEEN CLAIMED IN THE RETURN FILED WITHIN THE DUE DATE STIPULATED U/S.139(1) AND SINCE THE SAID CLAIM WAS NOT M ADE IN THE ORIGINAL RETURN FILED U/S 139(1), THE SAME COULD NOT BE ALLOW ED IN THE ASST. U/S 153A. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSE SSEE WAS NOT ENTITLED TO MAKE A FRESH CLAIM IN THE RETURN FILED U/S 153A ON THE GROUND THAT IN THE ASST. U/S 153A, ONLY INCOME WHICH HAD ESCAP ED ASST. COULD BE TAXED AND THE ASSESSEE COULD NOT BE PLACED IN A BETTER POSITION VIS-A-VIS THE INCOME DECLARED IN THE ORIGINAL RETURN. 4] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN THE ASST. U/S 153A, THE ISSUES WHICH HAVE ALREADY ATTAINED FINALITY IN THE ORI GINAL ASST. CANNOT BE DISTURBED UNLESS ANY INCRIMINATING EVIDENCE IS FOUND I N RESPECT OF THE SAME AND SINCE NO SUCH MATERIAL WAS FOUND IN RESPECT OF THE DEDUCTION U/S 80IA(4) CLAIMED IN RESPECT OF WINDMILLS, THE SAID CLA IM OF THE ASSESSEE MADE IN THE ASST. U/S153A WAS NOT ALLOWABLE. 5] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT IN THE ASST. U/S. 153A, THE ASSESSEE COULD MAKE A FRESH CLAIM WHICH WAS NOT MADE IN THE ORIGINAL RETURN AND THERE WAS NO SUCH BAR THAT NO NEW CLAIM CO ULD BE MADE BY THE ASSESSEE IN THE RETURN FILED U/S. 153A. 6] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE ASST. U/S 143(3) HAD NOT TAKEN PLACE FOR THIS YEAR AND HENCE, IN THE ASST. U/S 153A, THE A.O. WAS BOUND TO ASSESS THE TOTAL INCOME OF THE ASSESS EE AND THEREFORE, EVEN THE ISSUES IN RESPECT OF WHICH NO INCR IMINATING EVIDENCE WAS FOUND DURING SEARCH SHOULD HAVE BEEN CONSIDERED IN THE ASST. U/S 153A AND THUS, THE DEDUCTION CLAIMED BY THE ASSESSEE SHOU LD HAVE BEEN ALLOWED. 82. GROUNDS OF APPEAL NO. 1 TO 6 RELATE TO DISALLOWANCE U/ S.80IA(4) WHERE THE ASSESSEE HAS NOT CLAIMED THE SAME IN THE RE TURN FILED U/S.139(1) AND CLAIMED THE SAME FOR THE FIRST TIME IN THE RET URN FILED IN RESPONSE TO NOTICE U/S.153A. 83. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS ARE IDENTICAL TO GROUNDS OF APPEAL NO.1 TO 6 IN ITA NO.1151/PN /2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED B Y THE ASSESSEE 40 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 HAVE BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS, THE ABOVE GR OUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 84. GROUND OF APPEAL NO.7 BY THE ASSESSEE READ AS UNDER : 7] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT EACH PHASE OF WIND MILLS WAS TO BE CONSIDERED AS A SEPARATE UNDERTAK ING ELIGIBLE FOR DEDUCTION U/S 80IA AND HENCE, THE DEDUCTION U/S 80IA( 4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PHASES AND NOT O N CONSOLIDATED BASIS. 85. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN D IS IDENTICAL TO GROUND OF APPEAL NO.7 IN ITA NO.1151/PN/2013 F OR A.Y. 2007-08. WE HAVE ALREADY DECIDED THE ISSUE AND THE GRO UND RAISED BY THE ASSESSEE HAS BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS, THE ABOVE GROUND BY THE ASSESSEE IS ALLOWED. 86. GROUNDS OF APPEAL NO.8 TO 8.1 BY THE ASSESSEE READ AS UNDER : 8] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT IN VIEW OF THE PROVISIONS OF SECTION 80IA( 5) OF THE INCOME TAX ACT, 1961 THE PROFIT FROM THE ELIGIBLE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S 8 0IA OF THE ACT NEED NOT BE COMPUTED AFTER DEDUCTION OF THE NOTIONAL BRO UGHT FORWARD LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS WHICH HAVE BEEN SET OFF AGAINST OTHER INCOME IN EARLIER YEARS. 8.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE ONLY FROM THE INITIA L ASST. YEAR I.E. THE ASST. YEAR IN WHICH DEDUCTION U/S. 80IA WAS FIRST CLAIMED BY THE ASSESSEE AND ONLY FOR THE YEARS STARTING FROM THE INITIAL ASST. YEA R AND THEREAFTER, THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE AND HENC E, THERE WAS NO REASON TO SET OFF THE NOTIONAL BROUGHT FORWARD LOSSES /DEPRECIATION WHILE COMPUTING THE DEDUCTION U/S. 80IA FOR THE PRESENT ASST. YEAR. 87. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS BY THE ASSESSEE ARE IDENTICAL TO GROUNDS OF APPEAL NO.8 TO 8.1 IN ITA NO.1151/PN/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE HAVE BEEN ALLOWED. FOLLOW ING SIMILAR REASONINGS, THE ABOVE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 41 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 88. GROUND OF APPEAL NO.9 BY THE ASSESSEE READS AS UNDER : 9] WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ASSUMING WITHOUT ADMITTING THAT THE ASSESSEE IS NOT ELIGIBLE TO MAKE FRESH CLAIMS IN THE ASST. U/S.153A, THE ASSESSEE SUBMITS THAT THE ASSESSEE HAD ALREADY CLAIMED DEDUCTION U/S.80IA(4) TO THE TUNE OF RS.3,22,50,551/ - IN THE ORIGINAL RETURN FILED U/S.139(1) AND HENCE, THE DEDUCTION SHOU LD HAVE BEEN ALLOWED TO THAT EXTENT. 89. AFTER HEARING BOTH THE SIDES, WE FIND IT IS THE ALTERNAT E CONTENTION OF THE ASSESSEE THAT DEDUCTION U/S.80IA(4) MA DE TO THE EXTENT OF ITS CLAIM IN THE ORIGINAL RETURN. SINCE WE HAVE ALR EADY ALLOWED THE CLAIM MADE IN THE RETURN U/S.153A, THEREFORE, TH IS GROUND BECOMES INFRUCTUOUS. ACCORDINGLY, THE SAME IS DISMISSED. 90. GROUNDS OF APPEAL NO.10 TO 10.1 BY THE ASSESSEE READS AS UNDER : 10] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE E XPENDITURE ON ELECTRICAL YARD FENCING AND COST OF PREPARATION OF T EMPORARY APPROACH ROAD WAS NOT PART OF THE WINDMILL AND HENCE, THE DEP RECIATION AT A HIGHER RATE OF 80% WAS NOT ALLOWABLE IN RESPECT OF SUCH ITEMS. 10.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ABOVE ITEMS WERE PART AND PARCEL OF THE WIND MILL PURCHASED BY THE ASSE SSEE AND THEREFORE, DEPRECIATION @ 80% WAS RIGHTLY CLAIMED BY THE ASSESSEE. 91. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUB MITTED THAT THE ABOVE ISSUE IS DECIDED AGAINST THE ASSESSEE BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA FINVES T & AGRO PVT. LTD. REPORTED IN 118 TTJ 68. IN VIEW OF THE ABOVE, T HE ABOVE GROUNDS BY THE ASSESSEE ARE DISMISSED. 92. GROUND OF APPEAL NO.11 BY THE ASSESSEE BEING GENERA L IN NATURE IS DISMISSED. ITA NO.1186/PN/2013 (A.Y. 2008-09) (BY REVENUE) : 93. GROUNDS OF APPEAL NO. 1 AND 2 BY THE REVENUE READ AS UNDER : 1. THE LD.CIT(A) ERRED IN DECIDING THAT POWER GENE RATION FROM WINDMILL IS MANUFACTURING ACTIVITY 42 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 2. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE CAN CL AIM ADDITIONAL DEPRECIATION ON WINDMILL IF ASSESSEE IS ENGAGED IN MANUF ACTURING ACTIVITIES, ALTHOUGH WINDMILL HAS NO CONNECTION WITH ITS MANUFACTURING BUSINESS. 94. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS ARE IDENTICAL TO GROUNDS OF APPEAL NO.1 AND 2 IN ITA NO.1185/PN /2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISE D BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONING S THE ABOVE GROUNDS BY THE REVENUE ARE DISMISSED. 95. GROUND OF APPEAL NO.3 BY THE REVENUE READS AS UNDER : 3. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE IS ELI GIBLE TO CLAIM DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR WIN DMILL, ALTHOUGH DEPRECIATION ON ELECTRICAL FITTINGS IS @10% ONLY AS PE R I.T. RULES, 1962. 96. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN D IS IDENTICAL TO GROUND OF APPEAL NO.4 IN ITA NO.1185/PN/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE SAME REASONINGS THIS GROUND BY THE REVENUE IS DISMISSED. ITA NO.1153/PN/2013 (BY ASSESSEE) (A.Y. 2009-10) : 97. GROUNDS OF APPEAL NO. 1TO 6 BY THE ASSESSEE READ AS UNDER : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN DENYING THE DEDUCTI ON CLAIMED U/S 80IA(4) OF RS.7,75,08,855/-. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN VIE W OF THE PROVISIONS OF SECTION 80AC, THE ASSESSEE CAN CLAIM THE DEDUCTION U/ S 80IA( 4) ONLY IF THE SAME HAS BEEN CLAIMED IN THE RETURN FILED WITHIN THE DUE DATE STIPULATED U/S.139(1) AND SINCE THE SAID CLAIM WAS NOT M ADE IN THE ORIGINAL RETURN FILED U/S 139(1), THE SAME COULD NOT BE ALLOW ED IN THE ASST. U/S 153A. 43 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSE SSEE WAS NOT ENTITLED TO MAKE A FRESH CLAIM IN THE RETURN FILED U/S 153A ON THE GROUND THAT IN THE ASST. U/S 153A, ONLY INCOME WHICH HAD ESCAP ED ASST. COULD BE TAXED AND THE ASSESSEE COULD NOT BE PLACED IN A BETTER POSITION VIS-A-VIS THE INCOME DECLARED IN THE ORIGINAL RETURN. 4] THE LEARNED CIT(A) ERRED IN HOLDING THAT IN THE ASST. U/S 153A, THE ISSUES WHICH HAVE ALREADY ATTAINED FINALITY IN THE ORI GINAL ASST. CANNOT BE DISTURBED UNLESS ANY INCRIMINATING EVIDENCE IS FOUND IN RESPECT OF THE SAME AND SINCE NO SUCH MATERIAL WAS FOUND IN RESPECT OF THE DEDUCTION U/S 80IA(4) CLAIMED IN RESPECT OF WINDMILLS, THE SAID CLA IM OF THE ASSESSEE MADE IN THE ASST. U/S153A WAS NOT ALLOWABLE. 5] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT IN THE ASST. U/S. 153A, THE ASSESSEE COULD MAKE A FRESH CLAIM WHICH WAS NOT MADE IN THE ORIGINAL RETURN AND THERE WAS NO SUCH BAR THAT NO NEW CLAIM CO ULD BE MADE BY THE ASSESSEE IN THE RETURN FILED U/S. 153A. 6] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE ASST. U/S 143(3) HAD NOT TAKEN PLACE FOR THIS YEAR AND HENCE, IN THE ASST. U/S 153A, THE A.O. WAS BOUND TO ASSESS THE TOTAL INCOME OF THE ASSE SSEE AND THEREFORE, EVEN THE ISSUES IN RESPECT OF WHICH NO INCR IMINATING EVIDENCE WAS FOUND DURING SEARCH SHOULD HAVE BEEN CONSIDERED IN THE ASST. U/S 153A AND THUS, THE DEDUCTION CLAIMED BY THE ASSESSEE SHOU LD HAVE BEEN ALLOWED. 98. GROUNDS OF APPEAL NO. 1 TO 6 RELATE TO DISALLOWANCE U/ S.80IA(4) WHERE THE ASSESSEE HAS NOT CLAIMED THE SAME IN THE RET URN FILED U/S.139(1) AND CLAIMED THE SAME FOR THE FIRST TIME IN THE RET URN FILED IN RESPONSE TO NOTICE U/S.153A. 99. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS ARE IDENTICAL TO GROUNDS OF APPEAL NO.1 TO 6 IN ITA NO.1151/PN /2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED B Y THE ASSESSEE HAVE BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS, THE ABOVE GR OUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 100. GROUND OF APPEAL NO.7 BY THE ASSESSEE READ AS UNDER : 7] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT EACH PHASE OF WIND MILLS WAS TO BE CONSIDERED AS A SEPARATE UNDERTAK ING ELIGIBLE FOR DEDUCTION U/S 80IA AND HENCE, THE DEDUCTION U/S 80IA( 4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PHASES AND NOT O N CONSOLIDATED BASIS. 44 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 101. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROU ND IS IDENTICAL TO GROUND OF APPEAL NO.7 IN ITA NO.1151/PN/2013 FO R A.Y. 2007-08. WE HAVE ALREADY DECIDED THE ISSUE AND THE GRO UND RAISED BY THE ASSESSEE HAS BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS, THE ABOVE GROUND BY THE ASSESSEE IS ALLOWED. 102. GROUNDS OF APPEAL NO.8 TO 8.1 BY THE ASSESSEE READ AS UNDER : 8] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT IN VIEW OF THE PROVISIONS OF SECTION 80IA( 5) OF THE INCOME TAX ACT, 1961 THE PROFIT FROM THE ELIGIBLE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S 8 0IA OF THE ACT NEED NOT BE COMPUTED AFTER DEDUCTION OF THE NOTIONAL BRO UGHT FORWARD LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS WHICH HAVE BEEN SET OFF AGAINST OTHER INCOME IN EARLIER YEARS. 8.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE ONLY FROM THE INITIA L ASST. YEAR I.E. THE ASST. YEAR IN WHICH DEDUCTION U/S. 80IA WAS FIRST CLAIMED BY THE ASSESSEE AND ONLY FOR THE YEARS STARTING FROM THE INITIAL ASST. YEA R AND THEREAFTER, THE PROVISIONS OF SECTION 80IA(5) WERE APPLICABLE AND HENC E, THERE WAS NO REASON TO SET OFF THE NOTIONAL BROUGHT FORWARD LOSSES / DEPRECIATION WHILE COMPUTING THE DEDUCTION U/S. 80IA FOR THE PRESENT ASST. YEAR. 103. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROU NDS BY THE ASSESSEE ARE IDENTICAL TO GROUNDS OF APPEAL NO.8 TO 8.1 IN ITA NO.1151/PN/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE HAVE BEEN ALLOWED. FOLLOW ING SIMILAR REASONINGS, THE ABOVE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 104. GROUND OF APPEAL NO.9 BY THE ASSESSEE READS AS UNDER : 9] WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ASSUMING WITHOUT ADMITTING THAT THE ASSESSEE IS NOT ELIGIBLE TO MAKE FRESH CLAIMS IN THE ASST. U/S.153A, THE ASSESSEE SUBMITS THAT THE ASSESSEE HAD ALREADY CLAIMED DEDUCTION U/S.80IA(4) TO THE TUNE OF RS.2,31,54,624/- IN THE ORIGINAL RETURN FILED U/S.139(1) AND HENCE, THE DEDUCTION SHOU LD HAVE BEEN ALLOWED TO THAT EXTENT. 105. AFTER HEARING BOTH THE SIDES, WE FIND IT IS THE ALTERNA TE CONTENTION OF THE ASSESSEE THAT DEDUCTION U/S.80IA(4) MA DE TO THE 45 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 EXTENT OF ITS CLAIM IN THE ORIGINAL RETURN. SINCE WE HAVE A LREADY ALLOWED THE CLAIM MADE IN THE RETURN U/S.153A, THEREFORE, TH IS GROUND BECOMES INFRUCTUOUS. ACCORDINGLY, THE SAME IS DISMISSED. 106. GROUNDS OF APPEAL NO.10 TO 10.1 BY THE ASSESSEE READS AS UNDE R: 10] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE E XPENDITURE ON ELECTRICAL YARD FENCING AND COST OF PREPARATION OF T EMPORARY APPROACH ROAD WAS NOT PART OF THE WINDMILL AND HENCE, THE DEP RECIATION AT A HIGHER RATE OF 80% WAS NOT ALLOWABLE IN RESPECT OF SUCH ITEMS. 10.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ABOVE ITEMS WERE PART AND PARCEL OF THE WIND MILL PURCHASED BY THE ASSE SSEE AND THEREFORE, DEPRECIATION @ 80% WAS RIGHTLY CLAIMED BY THE ASSESSEE. 107. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SU BMITTED THAT THE ABOVE ISSUE IS DECIDED AGAINST THE ASSESSEE BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA FINVES T & AGRO PVT. LTD. REPORTED IN 118 TTJ 68. IN VIEW OF THE ABOVE, T HE ABOVE GROUNDS BY THE ASSESSEE ARE DISMISSED. 108. GROUND OF APPEAL NO.11 BY THE ASSESSEE BEING GENER AL IN NATURE IS DISMISSED. ITA NO.1187/PN/2013 (BY REVENUE) (A.Y. 2009-10) : 109. GROUNDS OF APPEAL NO. 1 AND 2 BY THE REVENUE READ AS UNDER : 1. THE LD.CIT(A) ERRED IN DECIDING THAT POWER GENE RATION FROM WINDMILL IS MANUFACTURING ACTIVITY 2. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE CAN CL AIM ADDITIONAL DEPRECIATION ON WINDMILL IF ASSESSEE IS ENGAGED IN MANUF ACTURING ACTIVITIES, ALTHOUGH WINDMILL HAS NO CONNECTION WITH ITS MANUFACTURING BUSINESS. 110. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROU NDS ARE IDENTICAL TO GROUNDS OF APPEAL NO.1 AND 2 IN ITA NO.1186/PN /2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISE D BY THE 46 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONING S THE ABOVE GROUNDS BY THE REVENUE ARE DISMISSED. 111. GROUND OF APPEAL NO.3 BY THE REVENUE READS AS UNDER : 3. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE IS ELI GIBLE TO CLAIM DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR WIN DMILL, ALTHOUGH DEPRECIATION ON ELECTRICAL FITTINGS IS @10% ONLY AS PE R I.T. RULES, 1962. 112. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROU ND IS IDENTICAL TO GROUND OF APPEAL NO.4 IN ITA NO.1186/PN/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE SAME REASONINGS THIS GROUND BY THE REVENUE IS DISMISSED ITA NO.1154/PN/2013 (BY ASSESSEE) (A.Y. 2010-11) 113. GROUNDS OF APPEAL NO. 1 TO 3 BY THE ASSESSEE READ AS UNDER : 1. THE LD.CIT(A) ERRED IN HOLDING THAT FOR THE PUR POSES OF SECTION 80IA(4), ALL THE WINDMILLS PURCHASED BY THE ASSESSEE WERE TO BE CONSIDERED AS ONE CONSOLIDATED ELIGIBLE UNDERTAKING AN D THE DEDUCTION U/S.80IA(4) WAS TO BE COMPUTED ON CONSOLIDATED BASIS ONL Y. 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING TH AT EACH PHASE OF WIND MILLS WAS TO BE CONSIDERED AS A SEPARATE UNDERTAK ING ELIGIBLE FOR DEDUCTION U/S 80IA AND HENCE, THE DEDUCTION U/S 80IA( 4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PHASES AND NOT O N CONSOLIDATED BASIS. 3. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE COULD HAVE SEPARATE UNDERTAKING CARRYING ON THE ELIGIBLE B USINESS AND THERE WAS NO REASON TO COMBINE ALL THE ELIGIBLE UNDERTAKINGS FO R COMPUTING THE DEDUCTION U/S.80IA(4). 114. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS ARE IDENTICAL TO GROUND OF APPEAL NO.7 IN ITA NO.1151/PN/2013 FO R A.Y. 2007-08. WE HAVE ALREADY DECIDED THE ISSUE AND THE GRO UNDS RAISED BY THE ASSESSEE HAVE BEEN ALLOWED. FOLLOWING THE SAME R EASONINGS, THE ABOVE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 47 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 115. GROUNDS OF APPEAL NO. 4 AND 5 BY THE ASSESSEE READ AS UNDER : 4. THE LD.CIT(A) ERRED IN HOLDING THAT THE EXPENDI TURE ON ELECTRICAL YARD FENCING AND COST OF PREPARATION OF TEMPORARY AP PROACH ROAD WAS NOT PART OF ACTUAL COST OF THE WINDMILL AND HENCE, THE D EPRECIATION AT A HIGHER RATE OF 80% WAS NOT ALLOWABLE IN RESPECT OF SUCH ITEMS. 5. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE ABOV E ITEMS WERE PART AND PARCEL OF THE WINDMILL PURCHASED BY THE ASSESSEE AND THEREFORE, DEPRECIATION @80% WAS RIGHTLY CLAIMED BY THE ASSESSEE. 116. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SU BMITTED THAT THE ABOVE GROUNDS HAVE BEEN DECIDED AGAINST THE ASSES SEE BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF P OONAWALA FINVEST & AGRO PVT. LTD. (SUPRA). IN VIEW OF THE ABOVE, T HE ABOVE GROUNDS BY THE ASSESSEE ARE DISMISSED. 117. GROUND OF APPEAL NO.6 BY THE ASSESSEE BEING GENERAL IN NATURE IS DISMISSED. ITA NO.1188/PN/2013 (A.Y. 2010-11) (BY REVENUE) : 118. GROUNDS OF APPEAL NO. 1 AND 2 BY THE REVENUE READ AS UNDER : 1. THE LD.CIT(A) ERRED IN DECIDING THAT POWER GENE RATION FROM WINDMILL IS MANUFACTURING ACTIVITY 2. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE CAN CL AIM ADDITIONAL DEPRECIATION ON WINDMILL IF ASSESSEE IS ENGAGED IN MANUF ACTURING ACTIVITIES, ALTHOUGH WINDMILL HAS NO CONNECTION WITH ITS MANUFACTURING BUSINESS. 119. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN DS ARE IDENTICAL TO GROUNDS OF APPEAL NO.1 AND 2 IN ITA NO.1186/P N/2013 FOR A.Y.2008-09. WE HAVE ALREADY DECIDED THE ISSUE AND THE G ROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONINGS THE ABOVE GROUNDS BY THE REVENUE ARE DISMISSED. 48 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 120. GROUND OF APPEAL NO.3 BY THE REVENUE READS AS UNDER : 3. THE LD.CIT(A) ERRED IN DECIDING THAT ASSESSEE IS ELI GIBLE TO CLAIM DEPRECIATION @80% ON ELECTRICAL FITTINGS USED FOR WIN DMILL, ALTHOUGH DEPRECIATION ON ELECTRICAL FITTINGS IS @10% ONLY AS PE R I.T. RULES, 1962. 121. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN D IS IDENTICAL TO GROUND OF APPEAL NO.3 IN ITA NO.1186/PN/2013 FOR A.Y. 2008-09. WE HAVE ALREADY DECIDED THE ISSUE AND THE GRO UND RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE SAME REASO NINGS THIS GROUND BY THE REVENUE IS DISMISSED. 122. GROUNDS OF APPEAL NO.4 AND 5 BY THE REVENUE READ AS UNDER : 4. THE LD.CIT(A) ERRED IN DECIDING THAT SELECTION O F INITIAL ASSESSMENT YEAR FOR COMPUTING EXEMPTION U/S.80IA IS AT THE OPTIO N OF THE ASSESSEE AND NOT THE YEAR IN WHICH YEAR BUSINESS ACTIVITY OF ELIGIB LE UNDERTAKING/UNIT STARTS? 5. THE LD.CIT(A) ERRED IN DECIDING THAT IF BROUGHT FORWARD LOSS OF ELIGIBLE UNIT U/S.80IA, IS ALREADY SET OFF WITH NON-EL IGIBLE BUSINESS UNDERTAKING THEN THERE IS NO NEED OF NOTIONALLY BROU GHT FORWARD SUCH LOSS AND SET OFF WITH INCOME OF ELIGIBLE UNIT/UNDERTAKING BEFORE ARRIVING QUANTUM OF EXEMPT INCOME OF SUCH ELIGIBLE UNIT U/S.80 IA, AS MANDATED U/S.80IA(5) OF THE ACT. 123. SO FAR AS THE ABOVE 2 GROUNDS ARE CONCERNED WE H AVE ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN GROUNDS OF APPEAL NO. 8 TO 8.1 IN ITA NO.1151/PN/2013. FOLLOWING THE SAME REASONIN GS AND CONSIDERING THE FACT THAT THE ORDER OF THE CIT(A) IS IN CO NSONANCE WITH OUR OBSERVATIONS IN THE SAID PARAGRAPHS, WE DO NOT FIND A NY INFIRMITY IN THE SAME. ACCORDINGLY, THE GROUNDS RAISED BY THE REV ENUE ARE DISMISSED. 49 ITA NOS.1148 TO 1154/PN/2013 & ITA NOS. 1183 TO 1188/PN/2013 124. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED AND ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-10-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) ' / JUDICIAL MEMBER / ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 30 TH OCTOBER, 2015. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ( ) S / THE CIT(A)-I, PUNE 4. ( S / THE CIT-I, PUNE 5. 6. + ., ., IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , + //TRUE C + //TRUE COPY// 2 . / SR. PRIVATE SECRETARY ., IQ.KS / ITAT, PUNE