Assistant Commissioner of Income tax, Pune V. M/s. Damodar Jaganath Malpani, Sangamner

ITA 1374/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6065 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 30-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NANDITHA KANCHAN
• Keywords: Set aside
• Section: 143(3); 80IA

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1374/PUN/2017 / ASSESSMENT YEAR : 2013-14 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 3, PUNE. . / APPELLANT. V/S M/S. DAMODAR JAGANATH MALPANI, SR.NO.50, MALPANI ESTATE, AKOLE ROAD, SANGAMNER 422 605. PAN : AACFD1713B. . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK. REVENUE BY : MRS. NANDITHA KANCHAN. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE OR DER OF COMMISSIONER OF INCOME TAX (A) 3, PUNE DATED 28.02.2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN T HE BUSINESS OF TOBACCO AND POWER GENERATION FROM WINDMILL. AS SESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2013-14 ON 29.09.2013 DECLARING TOTAL INCOME AT RS.NIL. THE CASE WAS SELECTED FO R SCRUTINY / DATE OF HEARING : 19.07.2019 / DATE OF PRONOUNCEMENT: 01.08.2019 2 AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE A CT VIDE ORDER DT.26.03.2016 AND THE TOTAL INCOME WAS DETERMINED AT RS.17,85,95,192/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.28.02.2017 (IN A PPEAL NO.PN/CIT(A)-3/CIR-3,PN/89/2016-17) GRANTED SUBSTANTIAL R ELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENU E IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR A DEDUCTI ON OF RS . 17,69,56,668/- U/S 80IA(4) OF THE INCOME TAX ACT, 1 961. 2 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN TREATING THE WINDMILLS SET UP AT DIFFERENT PLACE IN DIFFERENT YEAR AS SEPARATE UNDERTAKING AND THAT SUCH WINDMILL DO NOT CONSTITUTE AS SINGLE BUSINESS UNDERTAKING FOR THE PURPOSE OF DEDUCTION U /S 80IA OF THE I.T. ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION U/S 80IA (4) OF THE I.T. ACT BY NOT APPREC I ATING THAT EACH PHASE OF WIND MILLS WAS TO BE TREATED AS A SEPARATE UNDERTAKING ELIGIBLE FOR DEDUCTION U/S 80IA AND THE DEDUCTION U/S 80IA(4) SHOULD HAVE BEEN CONSIDERED INDEPENDENTLY F OR EACH PHASES AND NOT ON CONSOLIDATED BASIS . 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAD CLAIMED DEDUCTION OF RS.21,89,75,217/- U/S 80I A(4)(IV)(A) OF THE ACT ON ACCOUNT OF PROFITS EARNED FROM POWER GENE RATION FROM WINDMILL BUT THE CLAIM WAS RESTRICTED TO RS.17,69,56,668/- IN V IEW OF THE PROVISIONS OF SEC.80IA(2) OF THE ACT. THE ASSESSEE WA S ASKED TO JUSTIFY THE CLAIM OF DEDUCTION. TO THE SAID QUERY, ASSESS EE MADE DETAILED SUBMISSIONS WHICH WERE NOT FOUND ACCEPTABLE TO TH E AO. AO NOTED THAT THE CLAIM OF THE ASSESSEE FOR TREATING THE EACH WINDMILL PROJECT AS SEPARATE UNDERTAKING AND TO ALLOW DEDUCT ION U/S 80IA(4)(IV) OF THE ACT WAS NOT AS PER THE MANDATE OF SEC.80 IA OF THE ACT. HE ALSO NOTICED THAT ASSESSEE HAD A CUMULATIVE LOSS OF 3 RS.142,13,14,341/- ON A CONSOLIDATED BASIS (THE TABULATED DE TAILS ARE LISTED AT PAGE 19 OF THE ORDER). AO THEREFORE HELD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80IA(4) OF THE ACT AND AC CORDINGLY DENIED THE CLAIM OF DEDUCTION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO FOLLOWING THE ORDER OF HER PREDECESSOR AND THE DECISION OF TRIBUNAL IN ASSESSEES OW N CASE IN ITA NOS.1382 AND 1383/PUN/2015 ORDER DATED 16.10.2017) FOR A .YS. 2011-12 AND 2012-13 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 6.3. DECISI O N :- I HAVE PERUSED THE ASSESSMENT ORDER AND THE SUBMISSION MADE BY THE APPELLANT AS ABOVE CAREFULLY . THE FACTS AND CIRCUMSTANCES OF THE CASE & SUBMISSION MADE IN RESP ECT OF THIS GROUND HAS BEEN CONSIDERED. IDENTICAL ISSUE WAS FOR ADJUDI CATION IN APPELLANT'S CASE BEFORE THE PUNE ITAT FOR A.YS. 200 4-05 TO 2010-11, WHICH WAS ANSWERED IN APPELLANT'S FAVOUR. FURTHER, FOR A.YS. 2011-12 AND 2012-13, THE LD CIT (APPEALS)-11 VIDE COMMON AP PELLATE ORDER NO. PN/CIT(A)-11/DCIT CEN. CIR 1(1)/PN/116/2014-15 & PN /CIT(A)- 11/DCIT CEN. CIR.1(1)/PN/211/2014-15 DATED 17.8.201 5 HAS HELD AS UNDER: '94 I HAVE CONSIDERED THE APPELLANT'S ARGUMENTS. I HAVE ALSO GONE THROUGH THE AO'S ORDER AND THE DECISION O F MY PREDECESSOR CIT(A) REGARDING ALLOWING 80IA DEDUCTIO N ON A CONSOLIDATED BASIS ASSUMING THAT ALL THE WINDMILLS SET UP AT DIFFERENT PLACES IN DIFFERENT YEARS ARE PART OF THE SAME BUSINESS. NO FACTUAL DISCOVERY IS REQUIRED ON THIS ISSUE. THE ONLY QUESTION TO BE ANSWERED IS WHETHER ALL THE WINDMILLS OF THE APPELLANT SHOULD BE CONSIDERED AS A SINGLE UNIT AND DEDUCTION U/S 80IA SHOULD BE ALLOWED TO EACH UNDERTAKING ON ITS INCOME OR LOSS SEPARATELY OR 'DEDUCTION SHOULD BE ALLOWED TO THE A PPELLANT ON ITS CONSOLIDATED INCOME/LOSS FROM THE BUSINESS OF WINDM ILLS. 9.5 I FIND THAT THIS ISSUE WAS CONSIDERED BY THE PU NE BENCH OF THE ITAT IN THE CASE OF M/S. J-SONS FOUNDRY PVT. LTD SA NGLI IN ITS DECISION DATED 30/01.2013. THE RELEVANT PART OF THE TRIBUNAL'S ORDER IS REPRODUCED BELOW: '15. AGAINST THE DECISION OF THE LD. CIT(A), THE RE VENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE RIVAL SUBMISSIO NS OF THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY, THE ASSESSEE IS POWER GENERAL THROUGH THE WIND MILLS AT 3 DIFFERENT LOCATIONS I.E. IN TAMILNADU, PANCHGANI AND SA TARA. THE WIND MILLS ARE COMMISSIONED AND ERECTED IN DIFFERENT ASSESSMENT YEARS AS NOTED BY THE AUTHORITIES BELOW. ASSESSEE IS MAINTAINING SEPARATE BOOKS OF ACCOUNTS IN RESPECT OF 3 WIND MILLS AND WORKING OUT THE PROFIT OR LOSSES. THOUGH THE FIRST WIND MILL WAS ERECTED AND COMMISSIONED IN THE AY. 2002-03, THERE WERE CONSISTENT LOSSES UP TO THE AY. 2007-OB AND ASSESSEE DID NOT OPT FOR CLAIMING THE DEDUCTION U/S 80IA(2) OF T HE ACT. 4 SO FAR AS AY. 200B-09 IS CONCERNED, ASSESSEE OPTED FOR CLAIMING THE DEDUCTION U/S 80IA(2) TREATING THE SAI D ASSESSMENT YEAR (A.Y.) AS AN INITIAL ASSESSMENT YEAR AS THERE WAS THE PROFIT IN SATARA WIND MILL BUT LOSSES IN THE TAMIL NADU WIND MILL AND PANCHGANI WIND MILL. IF WE LOOK AT THE SCHEME OF THE SECTION 80IA(2), IT SPEAKS ABO UT THE 'UNDERTAKING' OR 'ENTERPRISE' AND NOT THE BUSINESS OF THE ASSESSEE. ADMITTEDLY, THREE WIND MILLS AT THE 3 LOCATIONS ARE INDEPENDENTLY OPERATED AND THE FINANCIAL RESULT S ARE SEPARATELY WORKED OUT. AS PER SUB-SEC.(5) OF SECTI ON 80IA, FOR COMPUTING THE DEDUCTION U/S 80IA(2), THE ELIGIB LE BUSINESS IS TO BE TREATED AS THE ONLY SOURCE OF INCOME. SUB-SEC.(S) OF SECTION 80IA HAS BEEN EXPLAINED BY THE HON'BLE HIGH COURT AND KERALA IN THE CASE OF CI T VS. ACCEL TRANSMATIC SYSTEMS LTD. 230 CTR 206 (KER) WHI CH HAS BEEN FOLLOWED BY THE LD. ,CIT(A). THE TERM 'BUS INESS' USED IN SUB-SEC(S) SECTION 80IA IN OUR HUMBLE OPINI ON IS CONFINED TO THE INDEPENDENT UNDERTAKING AND CANNOT GET MERGED WITH THE OTHER BUSINESSES. IN SEC. 80IA(2), FOR CLAIMING DEDUCTION 'UNDERTAKING' OR. 'ENTERPRISE' AS SUCH IS TO BE CONSIDERED. SEC.80IA(2) IS CHARGING SECTIONS FOR DETERMINING BASIC ELIGIBILITY AND THERE IS NO MENTION OF WORD 'BUSINESS'. SUB-SEC(5) OF SEC.80IA SPEAKS OF BUSINESS BUT SAME IS TO BE CONSTRUED AS BUSINESS OF 'UNDERTAKING' OR 'ENTERPRISE' AS REFERRED TO IN SUBSEC.( 2) OF SEC.80IA. IT IS WELL SETTLED PRINCIPLE OF INTERPRET ATION OF STATUTORY PROVISION THAT THEY ARE TO BE INTERPRETED HARMONIOUSLY TO MAKE WORKABLE TO GIVE INTENDED RESU LTS. HENCE, AS RIGHTLY HELD BY LD. CIT(A) TERM 'BUSINESS' USED IN SEC. 80IA(5) IS TO BE CONSTRUED AND UNDERSTOOD T O MEAN 'BUSINESS' OR 'UNDERTAKING OR ENTERPRISE'. IN OUR OPINION, THE LD. CIT(A) IN HIS WELL REASONED ORDER HAS RIGHT LY HELD THAT EVERY UNIT CONSTITUTE A SEPARATE UNDERTAKING ENGAGED IN THE ELIGIBLE BUSINESS AND LOSSES FROM ONE UNIT C ANNOT BE SET OFF AGAINST THE PROFITS. ANOTHER UNIT ENGAGED I N THE SAME BUSINESS FOR THE PURPOSE OF COMPUTING THE DEDU CTION U/S 80IA. WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, THE SAME ARE CONFIRMED AND GROUNDS TAKEN BY THE REVENUE ARE DISMISSED.' 9.6 THE ABOVE ORDER OF THE JURISDICTIONAL ITATWAS N OT BEFORE MY PREDECESSOR. HOWEVER NOW THAT THE DECISION IS AVAIL ABLE FOR GUIDANCE, I HAVE TO FOLLOW THE SAME AND DIFFER WITH MY PREDECES SOR. I FIND THAT MY PREDECESSOR CIT(A) V HAD ALSO DECIDE D THE ISSUE IN THE ASSESSEE'S FAVOR IN THE CASE OF ADVIK HI-TECH PVT. LTD (ASST YEAR 2008-09 AND 2010-11) BY HOLDING AS UNDER: '18. IN GROUND NO.4(B), THE APPELLANT'S GRIEVANCE IS THAT IT HAS TWO UNDERTAKINGS AT SANGLI AND DHULE BUT THE ASSESS ING OFFICER HAS TREATED THE SAME AS ONE ON THE BASIS THAT ELIGI BLE BUSINESS IS THE SAME. THIS ACTION OF THE ASSESSING OFFICER CANN OT BE APPROVED IN VIEW OF THE FACT THAT DEDUCTION IS ALLOWED TO TH E UNDERTAKING CARRYING OUT ELIGIBLE BUSINESS. THEREFORE, DEDUCTIO N HAS TO BE CALCULATED FOR THE EACH UNDERTAKING. 19. FROM THE FACTS OF THE CASE, IT IS VERY CLEAR TH AT WINDMILLS ARE SITUATED AT TWO DIFFERENT LOCATIONS AT SANGLI AND D HULE. THEREFORE, UNABSORBED LOSS/BUSINESS OF DHULE UNIT CANNOT BE SE T OFF AGAINST PROFIT OF SANGLI UNIT. THEREFORE, THE ASSESSING OFF ICER IS DIRECTED TO CALCULATE DEDUCTION U/S.80(IA)(4)(IV)(A) OF SANGLI UNIT ON STANDALONE BASIS AS PER PROVISIONS OF SEC.80IA (5) OF THE I. T. ACT. ACCORDINGLY, GROUND NO. 4(A) & 4(B) ARE ALLOWED.' 5 9.7 RESPECTFULLY FOLLOWING THE DECISION OF THE JURI SDICTIONAL ITAT, THE GROUNDS OF APPEAL 2-5 ARE ALLOWED IN FAVO R OF THE APPELLANT. THE DEDUCTION U/S 80IA SHOULD BE ALLOWED UNDERTAKING WISE AND NOT ON A CONSOLIDATED BASIS.' 6.3.1 RESPECTFULLY FOLLOWING THE DECISIONS OF THE JURISDI CTIONAL ITAT AND ALSO CIT (A)-11, PUNE, I HOLD THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S 80IA OF THE ACT UNDERTAKING-WISE AND NOT ON CONSOLIDATED BASIS. THE AO IS DIRECTED TO ALLOW THE SAID DEDUCTION. ACCORDINGLY, GROUNDS NO. 2 TO 5 RAISED BY- THE APPE LLANT ARE ALLOWED. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW BEFORE US. 5. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEFORE AO A ND LD.CIT(A) AND FURTHER SUBMITTED THAT IDENTICAL ISSUE AROSE IN ASSESSEES OWN C ASE IN A.YS. 2011-12 AND 2012-13 AND THE ISSUE HAS BEEN DEC IDED IN FAVOUR OF ASSESSEE. HE HAS PLACED ON RECORD THE COPY O F THE AFORESAID ORDER AND POINTED TO THE RELEVANT FINDINGS OF THE TRIBU NAL AND SUBMITTED THAT SINCE THE YEAR UNDER APPEAL ARE IDENTICA L TO A.YS. 2011-12 AND 2012-13, THE ISSUE BE DECIDED ACCORDINGLY. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RES PECT TO DENIAL OF CLAIM OF DEDUCTION U/S 80IA(4) OF THE ACT. THE CLAIM OF DED UCTION WAS DENIED BY AO BUT WHEN THE MATTER WAS CARRIED BEFORE LD .CIT(A), SHE FOLLOWING THE ORDER OF HER PREDECESSOR IN ASSESSEES OWN CASE FOR A.YS. 2011-12 AND 2012-13 ALLOWED THE CLAIM OF ASSESSEE. WE FIND THAT IDENTICAL ISSUE AROSE IN THE CASE OF ASSESSEE IN A.YS. 2011 -12 AND 2012-13 BEFORE ITAT IN ITA NOS.1382 & 1383/PUN/2015 VID E ORDER DT.16.10.2017 (SUPRA) AND THE ISSUE WAS DECIDED BY THE CO -ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES FAVOUR BY OBSERVING AS UNDER : 6 6. WE PERUSED THE FACTS OF THE CASE AS WELL AS LEG AL PROPOSITION EMANATING FROM THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE ( SUPRA.) AND ARE FOUND RELEVANT AND WE PROCEED TO EXTRACT TH E SAME AS UNDER :- 54. GROUND OF APPEAL NO. 7 RELATES TO METHODOLOGY OF COMPUTATION OF DEDUCTION U/S.80IA (4) AS ADOPTED BY THE AO BY CONSIDERING DIFFERENCE PHASES OF WINDMILLS AS SEPAR ATE UNDERTAKING. THE LD. CIT(A) FOLLOWING HIS ORDER FOR A.Y.2005-06 HELD THAT IN A FRESH CLAIM MADE BY THE ASSESSEE UNL ESS IT IS SUPPORTED BY SOME INCRIMINATING MATERIAL FOUND DURI NG THE COURSE OF SEARCH THE CLAIM CANNOT BE ENTERTAINED DU RING PROCEEDINGS U/S.153A. HE ACCORDINGLY DISMISSED THE ABOVE GROUND RAISED BY THE ASSESSEE. 55. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO T HE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF J. SO NS 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 THE SAID DECISION HELD THAT EACH WINDMI LL IS TO BE CONSIDERATE AS A SEPARATE 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 COORD INATE BENCH OF THE TRIBUNAL IN THE CASE OF J. SONS FOUNDRY PVT. LT D. (SUPRA) WHILE DISMISSING THE GROUNDS RAISED BY THE REVENUE ON THI S ISSUE HAS OBSERVED AS UNDER : 15. AGAINST THE DECISION OF THE LD. CIT(A), THE RE VENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE RIVAL SUBMIS SIONS OF THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY, THE ASSESSEE IS POWER GENERAL THROUGH THE WIND MILLS AT 3 DIFFERENT LOCATIONS I.E. IN TAMILNADU, PANCHGANI AN D SATARA. THE WIND MILLS ARE COMMISSIONED AND ERECTED IN DIFFERENT ASSESSMENT YEARS AS NOTED BY THE AUTHORIT IES BELOW. ASSESSEE IS MAINTAINING SEPARATE BOOKS OF ACCOUNTS IN RESPECT OF 3 WIND MILLS AND WORKING OUT THE PROFIT OR LOSSES. THOUGH THE FIRST WIND MILL WAS ER ECTED AND COMMISSIONED IN THE A.Y. 2002-03, THERE WERE CONSIS TENT LOSSES UP TO THE A.Y. 2007-08 AND ASSESSEE DID NOT OPT FOR CLAIMING THE DEDUCTION U/S 80IA(2) OF THE ACT. SO F AR AS A.Y. 2008-09 IS CONCERNED, ASSESSEE OPTED FOR CLAIMI NG THE DEDUCTION U/S 80IA(2) TREATING THE SAID ASSESSMENT YEAR (A.Y.) AS AN INITIAL ASSESSMENT YEAR AS THERE WAS T HE PROFIT IN SATARA WIND MILL BUT LOSSES IN THE TAMIL NADU WI ND MILL AND PANCHGANI WIND MILL. IF WE LOOK AT THE SCHEME O F THE SECTION 80IA(2), IT SPEAKS ABOUT THE 'UNDERTAKING' OR 'ENTERPRISE' AND NOT THE BUSINESS OF THE ASSESSEE. ADMITTEDLY, THREE WIND MILLS AT THE 3 LOCATIONS ARE INDEPENDENTLY OPERATED AND THE FINANCIAL RESULTS AR E SEPARATELY WORKED OUT. AS PER SUB-SEC.(5) OF SECTIO N 80IA, FOR COMPUTING THE DEDUCTION U/S 80IA(2), THE ELIGIB LE BUSINESS IS TO BE TREATED AS THE ONLY SOURCE OF INC OME. SUB-SEC.(5) OF SECTION 80IA HAS BEEN EXPLAINED BY T HE HON'BLE HIGH COURT AND KERALA IN THE CASE OF CIT VS . ACCEL TRANSMATIC SYSTEMS LTD. 230 CTR 206 (KER) WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A). THE TERM 'BUSINESS ' USED IN SUB-SEC.(5) SECTION 80IA IN OUR HUMBLE OPINION I S CONFINED TO THE INDEPENDENT UNDERTAKING AND CANNOT GET MERGED WITH THE OTHER BUSINESSES. IN SEC. 80IA(2), FOR 7 CLAIMING DEDUCTION 'UNDERTAKING' OR 'ENTERPRISE' AS SUCH IS TO BE CONSIDERED. SEC.80IA(2) IS CHARGING SECTIONS FOR DETERMINING BASIC ELIGIBILITY AND THERE IS NO MENTI ON OF WORD 'BUSINESS'. SUB-SEC.(5) OF SEC.80IA SPEAKS OF BUSINESS BUT SAME IS TO BE CONSTRUED AS BUSINESS OF 'UNDERTAKING' OR 'ENTERPRISE' AS REFERRED TO IN SUB - SEC.(2) OF SEC.80IA. IT IS WELL SETTLED PRINCIPLE OF INTERP RETATION OF STATUTORY PROVISION THAT THEY ARE TO BE INTERPRETED HARMONIOUSLY TO MAKE WORKABLE TO GIVE INTENDED RESU LTS. HENCE, AS RIGHTLY HELD BY LD. CIT(A) TERM 'BUSINESS ' USED IN SEC.80IA(5) IS TO BE CONSTRUED AND UNDERSTOOD TO MEAN 'BUSINESS' OR ITANOS.815, 891, 1494 &1600/PN/2011 M/S. J. SONS FOUNDRY PVT. LTD., SANGLI 'UNDERTAKING OR ENTERPRISE'. IN OUR OPINION, THE LD. CIT(A) IN HIS WELL REASONED ORDER HAS RIGHTLY HELD THAT EVERY UNIT CON STITUTE A SEPARATE UNDERTAKING ENGAGED IN THE ELIGIBLE BUSI NESS AND LOSSES FROM ONE UNIT CANNOT BE SET OFF AGAINST THE PROFIT OF ANOTHER UNIT ENGAGED IN THE SAME BUSINESS FOR THE PURPOSE OF COMPUTING THE DEDUCTION U/S 80IA. WE FIN D NO REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A) ON THIS ISSUE. ACCORDINGLY, THE SAME ARE CONFIRMED AND GROUNDS TAKEN BY THE REVENUE ARE DISMISSED. 58. RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL CITED (SUPRA.) AND IN ABSENCE OF ANY C ONTRARY MATERIAL BROUGHT TO OUR NOTICE WE HOLD THAT EACH PH ASE OF WINDMILL HAS TO BE CONSIDERED AS SEPARATE UNDERTAKI NG ELIGIBLE FOR DEDUCTION U/S.80IA AND THEREFORE DEDUCTION U/S. 80IA(4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PH ASE AND NOT ON CONSOLIDATED BASIS. THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ACCORDINGLY ALLOWED. 7. CONSIDERING THE ABOVE FACTS, IT IS EVIDENT THAT THE TRIBUNAL RELIED ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF J-SONS FOUNDRY PVT. LTD VS. DCIT (SUPRA.) FOR A.YRS. 2007- 08 AND 2008-09 ORDER DATED 30.01.2013 WHILE GRANTING RELIEF TO THE ASSESSEE IN APPEAL FOR THE A.YRS. 2007-08 TO 2010-11. IT IS NOW A SETT LED LEGAL PROPOSITION THAT EVERY UNIT CONSTITUTE A SEPARATE UNDERTAKING ENGAGED IN THE ELIGIBLE BUSINESS AND LOSSES FROM ONE UNIT CANNOT B E SET OFF AGAINST THE PROFIT OF ANOTHER UNIT ENGAGED IN THE SAME BUSINESS FOR THE PURPOSE OF COMPUTING THE DEDUCTION U/S 80IA. THEREFORE, WE AR E OF THE OPINION THAT ORDER OF THE CIT(A) ON THIS ISSUE IS FAIR AND REASO NABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. 8. THE OTHER ISSUE RAISED IN THE GROUND NO. 3 BY T HE REVENUE RELATES TO INITIAL ASSESSMENT YEAR. REGARDING THIS ISSUE, LD . COUNSEL SUBMITTED THAT THE SAME ISSUE ALSO STANDS COVERED BY THE ORDE R OF THE TRIBUNAL IN THE ASSESSEES OWN CASE (SUPRA) FOR A.YRS.2007-08 T O 2010-11 (SUPRA.) BRINING OUR ATTENTION TO PARA 59 TO 65 OF THE ORDER OF TRIBUNAL, WHICH IS PLACED AT PAGE NO. 16 AND 18 OF THE PAPER BOOK, LD. COUNSEL SUBMITTED THAT THE TRIBUNAL HELD THE ISSUE IN FAVOUR OF THE A SSESSEE. AS SUCH, THE ASSESSEE HAS OPTION TO CHOOSE THE INITIAL ASSESSMEN T YEAR. 9. WE HAVE HEARD BOTH PARTIES AND PERUSED THE SAID ORDER OF THE TRIBUNAL AND RELEVANT PORTION IS EXTRACTED AS UNDER : 64. AFTER HEARING BOTH THE SIDES, WE FIND THE ISSU E 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 FIRST MADE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION 8 OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PO ONAWALLA ESTATE STUD & AGRO FARM PVT. LTD. FOLLOWING THE DEC ISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHAS WAMY SPINNING MILLS PVT. LTD. HAS OBSERVED AS UNDER : 13. 65. RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL CITED (SUPRA) AND IN ABSENCE OF ANY CO NTRARY MATERIAL BROUGHT TO OUR NOTICE WE HOLD THAT THE PRO VISIONS OF SECTION 80IA(5) ARE APPLICABLE ONLY FROM THE INITIA L ASSESSMENT YEAR, I.E THE ASSESSMENT YEAR IN WHICH DEDUCTION U/ S.80IA WAS FIRST CLAIMED BY THE ASSESSEE AFTER EXERCISING HIS OPTION AS PER THE PROVISIONS OF SECTION 80IA(2) OF THE ACT,. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 10. CONSIDERING THE ABOVE, IT IS EVIDENT THAT THE I NITIAL ASSESSMENT YEAR FOR THE ASSESSEE FOR CLAIMING DEDUCTION U/S.80IA (4) R.W.S (5) IS THE ISSUE ADJUDICATED BY THE TRIBUNAL IN FAVOUR OF THE ASSESS EE. WHILE GRANTING RELIEF IN PARA 65 OF THE TRIBUNAL ORDER, THE TRIBUN AL RELIED ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA ESTATE STUD & AGRO FARM PVT. LTD. REPORTED IN 136 TTJ (PUN E) 236 AND ALSO FOLLOWING THE JUDGMENT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS PVT. LTD REPORTED IN 340 ITR 477. AS SUCH, LD. DR COULD NOT BRING ANY CONTRARY DECISION ON THE ISSUE UNDER CONSIDERATION. THUS, THE INITIAL ASSESSMENT YEAR CO NSTITUTES THE ASSESSMENT YEAR IN WHICH THE DEDUCTION U/S.80IA OF THE ACT IS FIRST CLAIMED BY THE ASSESSEE AFTER EXERCISING HIS OPTION AS PER THE PROVISIONS OF SECTION 80IA(2) OF THE ACT. THEREFORE, WE ARE OF THE OPINION THAT THE RELIEF GRANTED BY THE CIT(A) ON THIS ISSUE DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, GROUND NO.3 RAISED BY TH E REVENUE IS DISMISSED. 7. BEFORE US, REVENUE HAS NOT POINTED OUT ANY DISTINGUISH ING FEATURE IN THE FACTS OF THE PRESENT CASE AND THAT OF ASS ESSEES OWN CASE IN A.YS. 2011-12 AND 2012-13 IN ITA NOS.1382 & 1383/PUN /2015 ORDER DT.16.10.2017 (SUPRA) NOR HAS PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE DECISION OF PUNE TRIBUNAL IN ASSESSE ES OWN CASE IN A.YS. 2011-12 AND 2012-13 WHICH HAS BEEN RELIED UPON BY LD.CIT(A) HAS BEEN SET ASIDE / OVERTURNED OR STAYED BY THE HIGHER JUDICIAL FORUM. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REA SON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF REVENUE ARE DISMISSED. 9 8. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 1 ST DAY OF AUGUST, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 1 ST AUGUST, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-3, PUNE. PR. CIT-2, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.