Pranav Agro Industries Ltd., Pune V. ACIT, Circle-4, Pune

ITA 166/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1847 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Capital asset; Depreciation
• Section: 43B; 32; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 714/PN/2012 %' ( ')( / ASSESSMENT YEAR : 2008-09 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE ....... / APPELLANT ' / V/S. M/S. PRANAV AGRO INDUSTRIES LTD., 5 TH FLOOR, NAV MAHARASHTRA HOUSE, 43, SHANIWAR PETH, PUNE-411030 PAN :AABCP8009D / RESPONDENT *+& / CO NO. 29/PN/2015 %' ( ')( / ASSESSMENT YEAR : 2008-09 M/S. PRANAV AGRO INDUSTRIES LTD., 5 TH FLOOR, NAV MAHARASHTRA HOUSE, 43, SHANIWAR PETH, PUNE-411030 PAN :AABCP8009D ....... / APPELLANT ' / V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE / RESPONDENT 2 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 / ITA NO. 362/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2009-10 DY. COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE ....... / APPELLANT ' / V/S. M/S. PRANAV AGRO INDUSTRIES LTD., 5 TH FLOOR, NAV MAHARASHTRA HOUSE, 43, SHANIWAR PETH, PUNE-411030 PAN :AABCP8009D / RESPONDENT / ITA NO. 166/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2009-10 M/S. PRANAV AGRO INDUSTRIES LTD., 5 TH FLOOR, NAV MAHARASHTRA HOUSE, 43, SHANIWAR PETH, PUNE-411030 PAN :AABCP8009D ....... / APPELLANT ' / V/S. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 09-03-2016 / DATE OF PRONOUNCEMENT : 09-05-2016 3 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 , / ORDER PER VIKAS AWASTHY, JM : ITA NO. 714/PN/2012 HAS BEEN FILED BY THE REVENUE AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE D ATED 29-12-2011 FOR THE ASSESSMENT YEAR 2008-09. THE ASSE SSEE HAS FLED CROSS OBJECTION IN CO NO. 29/PN/2015 AGAINST THE AFORESA ID ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). IN ITA NO. 362/PN/2 013 THE REVENUE HAS FILED APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 18-09-2012 FOR THE ASSES SMENT YEAR 2009-10. THE ASSESSEE HAS FILED CROSS APPEAL AGAINST THE SAME ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN ITA NO. 166/PN/2013. SINCE, THE ISSUES RAISED IN THE APPEALS ARE SIMILAR AND ARE ARISING OUT OF SAME SET OF FACTS, THE APPEALS ARE TAKEN UP TOGETHER AND ARE DECIDED BY THIS COMMON ORDER. 2. THE CROSS OBJECTION FILED BY THE ASSESSEE IN ASSESSME NT YEAR 2008-09 ARE TIME BARRED BY 791 DAYS. THE ASSESSEE HA S FILED AN APPLICATION SUPPORTED BY AN AFFIDAVIT CITING REASONS FOR DELA Y IN FILING OF THE CROSS OBJECTION. AFTER PERUSING THE SAME WE ARE SA TISFIED THAT THE DELAY IN FILING OF CROSS OBJECTION BY THE ASSESSEE ARE NOT WILLFUL OR DELIBERATE. THUS, THE DELAY IN FILING OF CROSS OBJECTION IS CON DONED AND THE SAME IS ADMITTED TO BE HEARD AND DISPOSED OFF ON MERITS. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRODUCING ANIMAL FEE D, FEED SUPPLEMENT, EDIBLE OILS, FUEL PELLETS AND WIND POWER GENERATION. THE ASSESSEE IN ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSM ENT YEARS 4 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 HAD CLAIMED DEDUCTION U/S. 80JJA ON PROFITS AND GAINS FROM THE BUSINESS OF BIO DEGRADABLE WASTE. FURTHER, THE ASSESSEE HAD PURC HASED WINDMILL FROM M/S. NAV MAHARASHTRA CHAKAN OIL MILLS LIMITED (HEREINAFTER REFERRED TO AS NMCOML). IN THE FINANCIAL YEAR 2007-08 THE ASSESSEE CLAIMED DEDUCTION U/S. 80IA(4) AMOUNTING TO ` 34,89,416/- ON WINDMILL. THE ASSESSING OFFICER REJECTED BOTH THE ABOVE MENTIONED CLAIMS OF THE ASSESSEE. APART FROM THE A BOVE, THE ASSESSING OFFICER MADE DISALLOWANCE IN RESPECT OF PAYMENTS M ADE BY ASSESSEE TOWARDS EMPLOYEES CONTRIBUTION TO PROVIDENT F UND AND ESIC AFTER DUE DATE SPECIFIED UNDER THE RESPECTIVE ACTS AND CERTAIN OTHER EXPENSES. AGGRIEVED BY THE ASSESSMENT ORDERS IN THE RESPECTIVE A SSESSMENT YEARS, THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIO NER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDERS FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 ACCEPTED THE CLAIM OF THE ASSESSEE IN RESPECT OF DEDUCTIO N U/S. 80JJA, DEPRECIATION ON WINDMILL AND PAYMENT TOWARDS EMPLOYEES SH ARE OF CONTRIBUTION TO PROVIDENT FUND AND ESIC AFTER DUE DATE UNDER THE RESPECTIVE ACTS BUT BEFORE THE DUE DATE OF FILING OF RETUR N OF INCOME. HOWEVER, IN RESPECT OF CLAIM OF DEDUCTION U/S. 80IA(4) IN RESP ECT OF SALES TAX INCENTIVE, THE COMMISSIONER OF INCOME TAX (APPEALS ) REJECTED THE CONTENTIONS OF THE ASSESSEE. AGAINST THE FINDINGS OF C OMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE AND THE ASSESSEE A RE IN APPEAL BEFORE THE TRIBUNAL. FOR THE SAKE OF CONVENIENCE, THE APPEALS OF THE REVENUE ARE FIRST TAKEN UP FOR ADJUDICATION FOLLOWED BY THE CROSS OBJECTION AND APPEAL BY THE ASSESSEE. 5 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 ITA NOS. 714/PN/2012 & 362/PN/2013 (REVENUES APPEAL) 4. THE REVENUE HAS ORIGINALLY FILED ELABORATE GROUNDS IMPU GNING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). SUBSEQUENTL Y, THE REVENUE FILED CONCISE GROUNDS FOR THE ASSESSMENT YEARS U NDER APPEAL. THE CONCISE GROUNDS RAISED BY THE DEPARTMENT ASSAILING T HE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ARE REPRODUCED HERE-IN-BELOW : 1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) E RRED IN ALLOWING THE DEDUCTION U/S. 80JJA OF THE ACT WITHOUT APPRECIATIN G THAT BAGGASE/HUSK IS NOT A WASTE BUT IS A BY-PRODUCT OF AGRI-PRODUCE PROCESSING INDUSTRY WHICH WAS PURCHASED AND NOT COLLECTED & PROCESSED O R TREATED BY THE ASSESSEE, WHICH IS A PRE-REQUISITE FOR CLAIMING DED UCTION U/S.80JJA OF THE ACT. 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN ALLOWING THE ASSESSEE'S CLAIM OF DEPRECIATION ON WINDMILLS WHEN THE ASSESSSEE WAS NOT A REGISTERED OWNER OF THE WINDMILLS AND IT WAS PURCHASING ELECTRICITY FROM NAV MAHARASHTRA CHAKAN OIL MILLS LTD.(NMCOML), THUS HAVING NO TITLE/DOMINION AND RIGHT TO USE THE ASSET. 3) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN FAILING TO APPRECIATE THE SO CALLED PURCHASE OF WINDMILLS BY T HE ASSESSEE FROM ITS SISTER CONCERN NMCOML, A LOSS MAKING COMPANY WAS A SHAM TRANSACTION CARRIED OUT IN ORDER TO MERELY AVAIL TH E BENEFIT OF DEPRECIATION. 4) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN HOLDING THAT EMPLOYEES CONTRIBUTION TO PROVIDENT FUND, ESIC & MA HARASHTRA LABOUR WELFARE FUND PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME WAS ALLOWABLE AS DEDUCTION U/S.36(1)(VA) OF THE ACT REL YING UPON A DISTINGUISHABLE DECISION OF THE APEX COURT AND WITH OUT APPRECIATING THAT THE ASSESSEE HAD NOT MADE THE PAYMENTS WITHIN THE D UE DATE AS PRESCRIBED IN THE EXPLANATION UNDER SEC.36(1)(VA) O F THE ACT. 5) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. IDENTICAL GROUNDS HAVE BEEN RAISED BY THE REVENUE IN BO TH THE ASSESSMENT YEARS UNDER APPEAL. 6 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 5. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT SUB MITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ALLOWING DEDUCTION OF ` 89,24,682/- (FOR ASSESSMENT YEAR 2008-09) AND ` 1,99,06,881/- (FOR ASSESSMENT YEAR 2009-10) U/S. 80JJA OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRE CIATE THAT BAGGASSE/HUSK IS NOT A WASTE BUT A BY-PRODUCT GENERA TED BY AGRI- PRODUCE PROCESSING INDUSTRIES AND IS A BASIC RAW MATERIA L FOR MANY INDUSTRIAL PRODUCTS APART FROM BEING USED AS FUEL BY THE IN DUSTRIES TO RUN BOILERS. THE LD. DR SUBMITTED THAT THE GROUNDNUT HU SK, KHARADI HUSK IS A RESIDUAL PRODUCT GENERATED DURING OIL REFINERY P ROCESS CARRIED OUT BY THE ASSESSEE AND IS ONE OF THE RAW MATERIALS U SED FOR MANUFACTURING CATTLE FEED WHICH IS ALSO A BUSINESS ACTIVITY OF THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GR OSSLY ERRED IN HOLDING THAT THE CBDT CIRCULAR NO. 772 DATED 23-12-199 8 APPLIES TO LOCAL BODIES AND NOT TO MUNICIPALITIES. THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF ASSESSING OFFICER ON THE ISSUE AND PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 6. IN RESPECT OF CLAIM OF DEPRECIATION ON WINDMILL, THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSEE WAS NOT A REGISTERED OWNER OF THE WINDMILL AND THEREFORE, THE ASSESSEE IS NOT ELIGIBLE TO CLA IM DEPRECIATION ON THE WINDMILL. THE LD. DR FURTHER CONTENDED T HAT THE ASSESSEE HAS NOT PAID ANY CONSIDERATION FOR ALLEGED PURCH ASE OF WINDMILL. THE TRANSFER OF MONEY IS ONLY THROUGH BOOK ENTR IES. THE ASSESSEE HAS NOT PLACED ANY DOCUMENT TO SUBSTANTIATE THAT THE ASSESSEE HAD TITLE OR DOMAIN OVER THE WINDMILL. FURTHER, A PERUSAL OF RECORDS WOULD SHOW THAT THE ASSESSEE PURCHASED ELECTR ICITY FROM 7 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 NMCOML WHICH PROVES THAT THE ASSESSEE HAS NO RIGHT TO USE THE ASSET AND THUS, THE CLAIM OF DEPRECIATION ON WINDMILL HAS TO BE REJ ECTED. THE LD. DR CONTENDED THAT THE SO CALLED SALE TRANSACTION OF TH E WINDMILL IS MERELY A SHAM TRANSACTION TO AVAIL THE BENEFIT OF DEPRECI ATION. THE ASSESSEE HAD ALLEGEDLY PURCHASED THE WINDMILL FROM ITS ASSO CIATE CONCERN NMCOML A LOSS MAKING COMPANY. THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN ALLOWING THE CLAIM OF ASSESSEE IN RESPECT OF PAYMENTS MADE TOWARDS EMPLOYEES CONTRIBUTION TO PRO VIDENT FUND, ESIC AND MAHARASHTRA LABOUR WELFARE FUND. WHEREAS, THE PAYMENTS MADE UNDER THE RESPECTIVE ACTS WERE AFTER THE DUE DAT E AS SPECIFIED UNDER THE RESPECTIVE ACTS. THE ASSESSEE HAS VIOLATED T HE PROVISIONS OF SECTION 36(1)(VA) UNDER THE INCOME TAX ACT. THE COMMISSION ER OF INCOME TAX (APPEALS) HAS ERRED IN GRANTING RELIEF TO THE A SSESSEE BY DELETING THE ADDITIONS/DISALLOWANCES MADE BY THE ASSESSING OFFICER. 7. PER CONTRA SHRI SHARAD SHAH APPEARING ON BEHALF OF TH E ASSESSEE VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS) IN ACCEPTING THE CLAIM OF THE ASSESSEE ON WHICH TH E REVENUE IS IN APPEAL. THE LD. AR SUBMITTED THAT THE ISSUE RELATING T O DEDUCTION U/S. 80JJA IN RESPECT OF PROFITS AND GAINS FROM THE BUSINE SS OF COLLECTING AND PROCESSING BIO DEGRADABLE WASTE IS SQUARELY COVERED BY THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F COMMISSIONER OF INCOME TAX VS. SMT. PADMA S. BORA REPORTE D AS 29 TAXMANN.COM 230 (BOMBAY). THE COMMISSIONER OF INCOME TAX (APPEALS) HAD GRANTED RELIEF TO THE ASSESSEE BY PLACING RELIA NCE ON THE DECISION OF TRIBUNAL IN THE CASE OF DCIT VS. SMT. PADMA S. BO RA REPORTED AS 133 TTJ 108 (PUNE-TRIB.). THE ORDER OF THE T RIBUNAL WAS 8 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 UPHELD BY THE HON'BLE JURISDICTIONAL HIGH COURT VIDE JUDGME NT DATED 03-12-2012 SUBSEQUENT TO THE ORDER OF COMMISSIONER OF I NCOME TAX (APPEALS). 8. IN RESPECT OF DEPRECIATION ON WINDMILL, THE LD. AR SUBMITT ED THAT THE ASSESSEE HAD MADE PAYMENTS TOWARDS THE PURCHASE CONSIDERATION THROUGH BANKING CHANNEL. THE LD. AR REFERRED TO THE LEDGE R ACCOUNT AT PAGES 121 AND 122 OF THE PAPER BOOK TO SHOW THE DATE S AND MODE OF PAYMENT OF PURCHASE CONSIDERATION OF WINDMILL. THE LD. AR A LSO PLACED ON RECORD SALES TAX ENTITLEMENT CERTIFICATE TO AVAIL SALES T AX BENEFIT ON WINDMILL AND A COPY OF APPLICATION TO MAHARASHTRA ENERGY DE VELOPMENT AGENCY (MEDA) MADE BY THE NMCOML SEEKING APPROVAL FOR TR ANSFER OF WINDMILL IN FAVOUR OF THE ASSESSEE. THE LD. AR FURTHER REFER RED TO THE LETTER DATED 01-06-2007 AT PAGE 130 OF THE PAPER BOOK WRITTEN BY NMCOML TO M/S. ENERCON FOR TRANSFER OF A.M.C. IN THE NAME O F THE ASSESSEE. 9. IN RESPECT OF PAYMENT MADE TOWARDS EMPLOYEES CONT RIBUTION TO PROVIDENT FUND AND ESIC THE LD. AR SUBMITTED THAT THE P AYMENTS WERE MADE BEFORE DUE DATE OF FILING OF RETURN OF INCOME UNDER THE PROVISIONS OF THE ACT. THE LD. AR SUBMITTED THAT WHERE THE PAYMEN TS IN RESPECT OF MANDATORY CONTRIBUTIONS UNDER THE RESPECTIVE ACTS ARE MADE AFTER THE DUE DATE AS SPECIFIED UNDER THE RELEVANT ACTS BUT BEFORE THE DUE DATE OF FILING RETURN OF INCOME THE SAME IS ALLOWABLE IN VIEW OF THE JUD GMENT OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSIONS LTD. REPORTED AS 319 ITR 306 (SC ). SUBSEQUENTLY, THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GHATGE PATIL TRANSPORT LTD . REPORTED 9 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 AS 368 ITR 749 (BOM) BY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT HS HELD THAT EMPLOYEES CONTRIBUTION TO PF ETC. IS ALLOWABLE IF DEPOSITED BEFORE THE DUE DATE OF FILING RETURN OF INCOME. THE LD. AR V EHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPE ALS) AND PRAYED FOR DISMISSING THE APPEALS OF THE REVENUE. 10. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESE NTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW FOR RESPECTIVE ASSESSMENT YEARS. WE HAVE ALSO CONSIDERED T HE VARIOUS DOCUMENTS WHICH WERE REFERRED TO BY THE LD. AR DURING TH E COURSE OF MAKING SUBMISSIONS. THE REVENUE IN ITS APPEALS HAVE ASSA ILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWING ISSUES: SL. NO. PARTICULARS A.Y. 2008 - 0 - 9 A.Y. 2009 - 10 1 DEDUCTION U/S. 80JJA ` 89,24,682/ - ` 1,99,06,881/ - 2 DEPRECIATION ON WINDMILLS ` 1,09,60,000/ - ` 21,92,000/ - 3 EMPLOYEES CONTRIBUTION TO PF, WELFARE FUND, ESIC `11,27,867/ - ` 1,74,756/ - 11. THE FIRST ISSUE RAISED BY THE DEPARTMENT IN GROUND N O. 1 RELATES TO CLAIM OF DEDUCTION U/S. 80JJA OF THE ACT ALLOWED BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE COMPA NY IS ENGAGED IN THE BUSINESS OF MANUFACTURING PELLETS FOR FUEL FRO M BIO DEGRADABLE WASTE. THE ASSESSEE IS COLLECTING BIO-DEGRADAB LE WASTE SUCH AS GROUNDNUT HUSK, BAGGASE FROM NEARBY AREAS AND AFTER PROCESSING THE SAME THE ASSESSEE IS MAKING SMALL SIZES FUEL PELLETS TO BE USED AS FUEL. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESS EE ON THE 10 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 GROUND THAT THE BAGGASE AND GROUNDNUT HUSK ARE NOT BIO DEGRADABLE WASTE BUT A BY-PRODUCT. THE ASSESSING OFFICER HELD THAT THE ASSESSEE DOES NOT SATISFY THE CONDITIONS FOR CLAIMING DEDUCTION U/S. 80JJA OF THE ACT AND REJECTED THE CLAIM OF THE ASSESSEE. THE COMMISS IONER OF INCOME TAX (APPEALS) AFTER APPRECIATING THE FACTS OF THE CA SE AND IN VIEW OF THE DECISION OF TRIBUNAL IN THE CASE OF DCIT VS. SMT. PADMA S. BORA (SUPRA) ACCEPTED THE CLAIM OF THE ASSESSEE. 12. BEFORE US THE LD. AR HAS PLACED ON RECORD THE JUDG MENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF I NCOME TAX VS. SMT. PADMA S. BORA (SUPRA) WHEREIN THE HON'BLE JURISDIC TIONAL HIGH COURT HAS UPHELD THE FINDINGS OF TRIBUNAL. THE QUESTIO NS OF LAW FOR CONSIDERATION BEFORE THE HON'BLE HIGH COURT WERE : A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN ALLOWING DEDUCTION U/ S.80JJA OF THE INCOME TAX ACT ON THE PROFITS DERIVED FROM THE BUSINESS OF MANUFACTURING FUEL BRIQUETTES FROM BAGASSE? B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS CORRECT IN NOT APPRECIATING THAT B AGASSE IS NOT A WASTE BUT IS A BY PRODUCT OF SUGAR INDUSTRY AND IS A BASI C RAW MATERIAL FOR MANY INDUSTRIAL PRODUCTS APART FROM BEING USED AS F UEL BY THE SUGAR INDUSTRY TO RUN BOILERS? THE HON'BLE HIGH COURT AFTER CONSIDERING THE PROVISIONS OF SECTION 80JJA AND CIRCULAR NO. 772 DATED 23-12-1998 ISSUED BY T HE CBDT HELD AS UNDER: 7) WE HAVE CONSIDERED THE SUBMISSIONS. WE FIND THA T ON EXAMINATION OF THE EVIDENCE BOTH COMMISSIONER OF INCOME TAX (APPEAL S) AS WELL AS TRIBUNAL HAVE REACHED A FINDING OF FACT THAT BAGASS E IS A BIODEGRADABLE WASTE USED FOR MAKING BRIQUETTES FOR FUEL BY THE RE SPONDENT ASSESSEE. THIS FINDING OF FACT WAS BASED ON EVIDENCE LED BEFO RE THE AUTHORITIES BY THE RESPONDENT ASSESSEE. WE FIND THAT BAGASSE IS A WASTE OF THE SUGAR 11 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 FACTORY. THIS WASTE IS A BIO-DEGRADEABLE WASTE AND THE SAME IS COLLECTED ON CONSIDERATION BY THE RESPONDENT ASSESSEE FROM TH E FACTORY. THERE COULD BE NO UNIVERSAL DEFINITION OF THE WORD 'WASTE '. THE TERM WASTE HAS TO BE UNDERSTOOD CONTEXTUALLY I.E. PLACE WHERE IT A RISES AND THE MANNER IN WHICH IT ARISES DURING THE PROCESSING OF SOME AR TICLE. THE FACT THAT SUGAR INDUSTRY ALSO REGARDS BAGASSE AS WASTE IS EVI DENT FROM CIRCULAR DATED 4/2/2006 ISSUED BY THE SUGAR COMMISSIONER, MA HARASHTRA STATE, PUNE. BESIDES THE ITC CLASSIFICATION OF THE EXIM PO LICY ALSO CLASSIFIES BAGASSE AS A WASTE OF SUGAR INDUSTRY UNDER CHAPTER 23 HEADING 23.20 THEREOF. FURTHER, THE CENTRAL EXCISE TARIFF ACT 198 5 ALSO REGARDS BAGASSE AS WASTE OF SUGAR MANUFACTURE AND IS CLASSIFIED UND ER CHAPTER 23 HEADING 23.01 OF THE CENTRAL EXCISE TARIFF ACT, 198 5. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE APPELLANT'S COUNSEL THA T COLLECTION WOULD MEAN COLLECTING FREE OF CHARGE AND NOT BY PURCHASIN G THE SAME. THE WORD 'COLLECTING' MEANS TO GATHER; TO FETCH. IT IS A NEU TRAL WORD AND DOES NOT MEAN COLLECTION FOR CONSIDERATION OR COLLECTION WIT HOUT CONSIDERATION. IT IS AN ADMITTED/UNDISPUTED POSITION THAT THE RESPONDENT ASSESSEE HAS COLLECTED BAGASSE FROM SUGAR FACTORIES AFTER HAVING MADE PAYMENT FOR THE SAME. THEREFORE, THE AFORESAID REQUIREMENT OF C OLLECTING AS PROVIDED UNDER SECTION 80JJA OF THE ACT IS SATISFIED. IT IS A UNDISPUTED FINDING OF FACT THAT THE COLLECTED BAGASSE HAS BEEN USED BY TH E RESPONDENT ASSESSEE TO MAKE BRIQUETTES FOR FUEL AS THAT INDEED IS THE BUSINESS OF THE RESPONDENT-ASSESSEE. THE RELIANCE UPON THE CIRCULAR NO.772 DATED 23/12/1998 BY THE APPELLANT IS MISPLACED. THE AFORE SAID CIRCULAR DOES NOT RESTRICT ITS BENEFITS ONLY TO LOCAL BODIES. IN ANY EVENT THE CIRCULAR CANNOT OVERRIDE THE CLEAR WORDS OF SECTION 80JJA OF THE ACT WHICH PROVIDES DEDUCTION IN RESPECT OF PROFITS AND GAINS DERIVED FROM THE BUSINESS OF COLLECTING AND PROCESSING/TREATING OF B IO- DEGRADABLE WASTE I.E. BAGASSE INTO BRIQUETTES FOR FUEL. IN THESE CIR CUMSTANCES, WE FIND NO FAULT WITH THE ORDER OF THE TRIBUNAL BOTH ON FACTS AS WELL AS IN LAW. 13. THUS, IN VIEW OF THE FACTS OF THE CASE AND THE JUDGME NT OF HON'BLE HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. PADMA S. BORA (SUPRA) WE ARE OF THE CONSIDERED VIEW THAT THE AS SESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80JJA. THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) ON ISSUE ARE WELL REASONED AND THU S, NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, GROUND NO. 1 RAISED IN THE 12 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 CONCISE GROUNDS OF THE APPEAL OF THE DEPARTMENT IS DISMIS SED BEING DEVOID OF ANY MERITS. 14. THE SECOND ISSUE RAISED BY THE DEPARTMENT IN GROU ND NOS. 2 AND 3 RELATE TO CLAIM OF DEPRECIATION ON WINDMILLS. THE ASSESSIN G OFFICER REJECTED THE DEPRECIATION CLAIM ON THE GROUND THAT THE ASSESSEE IS NOT A REGISTERED OWNER OF THE WINDMILLS. WHEREAS, THE CONTENTION OF THE LD. AR IS THAT THE ASSESSEE HAS PURCHASED WINDMILL FOR A TOT AL CONSIDERATION OF ` 1,10,00,000/-. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR HAS REFERRED TO THE LEDGER ACCOUNT AT PAGES 121 AN D 122 OF THE PAPER BOOK. A PERUSAL OF THE SAME SHOWS THAT THE PAYMENT TOWARDS T HE CONSIDERATION OF WINDMILL HAS BEEN MADE BY THE ASSESSEE T HROUGH BANK ON VARIOUS DATES STARTING FROM 06-08-2007 TO 14-03-200 8. THE LD. AR HAS ALSO PLACED ON RECORD THE LETTERS ADDRESSED BY THE NMCOML TO MEDA, THE IMPLEMENTING AGENCY FOR TRANSFER/APPROVAL OF TRA NSFER OF WINDMILL IN FAVOUR OF THE ASSESSEE. THE SAID LETTERS ARE DAT ED 22-01-2007 AND 02-08-2007. A FURTHER PERUSAL OF SALES TAX ENTITLEMENT CERTIFICATE FOR AVAILING SALES TAX BENEFIT DATED 12 -12-2007 ISSUED BY JOINT COMMISSIONER OF SALE TAX (HQ)2, MAHARASHTRA STATE, MUMBAI CLEARLY SHOWS THE MODIFICATION CARRIED OUT IN RESPEC T OF THE UNDERTAKING ELIGIBLE TO CLAIM SALES TAX BENEFIT. THE SAID MODIFIC ATION AS PER THE CERTIFICATE ISSUED BY THE SALES TAX DEPARTMENT IS EFFECTIVE FROM 05-12-2007 IN FAVOUR OF THE ASSESSEE. THE LD. AR ALSO RE FERRED TO MEMORANDUM OF UNDERSTANDING DATED 01-06-2007 BETWEEN NMCOML AND THE ASSESSEE WITH REGARD TO TRANSFER OF WINDMILL AND M OBILITY IN RESPECT THEREOF AT PAGES 137 TO 143 OF THE PAPER BOOK , AS WELL AS THE LETTER WRITTEN BY NMCOML DATED 01-06-2007 ADDRESSED T O ENERCON FOR TRANSFER OF A.M.C. IN THE NAME OF THE ASSESSEE AT PAGE 130 OF THE PAPER 13 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 BOOK. THUS, FROM THE PERUSAL OF DOCUMENTS ON RECORD IT IS CLEARLY EVIDENT THAT THE ASSESSEE HAD PURCHASED WINDMILL FROM NMC OML DURING THE FINANCIAL YEAR 2007-08 AND IS ELIGIBLE TO CLAIM DE PRECIATION ON THE WINDMILL. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ACCEPTED THE DEPRECIATION CLAIM OF THE ASSESSEE AFTER CON SIDERING THE FACTS OF THE CASE AND DOCUMENTS ON RECORD. THE COMMISS IONER OF INCOME TAX (APPEALS) HAS OBSERVED AS UNDER: 5.3 IN THE PRESENT CASE, THE APPELLANT HAS BEEN US ING THE WINDMILLS, SALES BILL HAS BEEN ISSUED IN ITS FAVOUR, IT HAS CO NSUMED ELECTRICITY FOR ITS OWN MANUFACTURING PROCESS. THE FACTS BROUGHT ON REC ORD CLEARLY INDICATE THAT THE APPELLANT HAS ACQUIRED THE POSSESSION OVER THE WINDMILLS AND HAS BEEN PRODUCING ELECTRICITY FOR ITS OWN CONSUMPT ION AND THE ASSET IS UTILIZED. THE A.O. HAS NOT QUESTIONED THIS ASPECT DURING THE ASSESSMENT PROCEEDINGS. IT IS IN THIS CONTEXT THAT THE APEX CO URT'S DECISION OF MYSORE MINERALS LTD. VS. CIT CITED SUPRA BECOMES IMPORTANT AND WHICH HAS' HELD THAT THE TERM 'OWNED' AS OCCURRING IN SECTION 32(1) MUST BE ASSIGNED A WIDER MEANING. ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE EXERCISING SUCH DOMINION OVER THE PROPERTY AS WOULD ENABLE OTHERS BEING EXCLUDED THEREFROM AND HAVING RIGHT TO USE AND OCCU PY THE PROPERTY AND / OR TO ENJOY ITS USUFRUCT IN HIS OWN RIGHT WOULD B E THE OWNER OF THE BUILDING THOUGH A FORMAL DEED OF TITLE MAY NOT HAVE BEEN EXECUTED AND REGISTERED AS CONTEMPLATED BY TRANSFER OF PROPERTY ACT, REGISTRATION ACT ETC. THE VERY CONCEPT OF DEPRECIATION SUGGEST THAT THE TAX BENEFIT ON ACCOUNT OF DEPRECIATION LEGITIMATELY BELONGS TO ONE WHO HAS INVESTED IN THE CAPITAL ASSET, IS UTILIZING THE CAPITAL ASSET A ND THEREBY LOSING GRADUALLY INVESTMENT CAUSED BY WEAR AND TEAR, AND W OULD NEED TO REPLACE THE SAME BY HAVING LOST ITS VALUE OVER A PE RIOD OF TIME. IT IS WELL SETTLED THAT THERE CANNOT BE TWO OWNERS OF THE PROP ERTY SIMULTANEOUSLY AND IN THE SAME SENSE OF THE TERM. THE INTENTION OF THE LEGISLATURE IN ENACTING SECTION 32 WOULD BE BEST FULFILLED BY ALLO WING DEDUCTION IN RESPECT OF DEPRECIATION TO THE PERSON IN WHOM FOR T HE TIME BEING VESTS THE DOMINION OVER THE BUILDING AND WHO IS ENTITLED TO U SE IT IN HIS OWN RIGHT AD IS USING THE SAME FOR HIS BUSINESS OR PROFESSION . ASSIGNING ANY DIFFERENT MEANING WOULD NOT SUB-SERVE THE LEGISLATI VE INTENT. IN CIT VS NATIONAL COOPERATIVE CONSUMERS FEDERATION LTD. (200 2),254 ITR 599 (DEL), THE DELHI HIGH COURT FOLLOWED ITS FULL BENCH DECISION IN GOWERSONS PUBLISHERS (P) LTD. VS CIT (1999) 240 ITR 191 (DEL) (FB) AND HELD THAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION ALLOWANCE IN RESPECT OF GODOWN- 14 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 CUM-SHOWROOM PURCHASED BUT, NOT REGISTERED IN ITS N AME. 5.4 IN VIEW OF THE ABOVE FACTS AND THE RATIO OF THE JUDICIAL CITATIONS THE DISALLOWANCE MADE BY THE A.O. WITH RESPECT TO THE D EPRECIATION ON WINDMILLS AMOUNTING TO RS.1,09,60,000/- IS LIABLE T O BE DELETED. GROUND NO. 4 RAISED BY THE APPELLANT IS ALLOWED. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS OF FIRST APPELLATE AUTHORITY. THUS, IN VIEW OF THE DOCUMENTS ON REC ORD WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ACCEPTING THE CLAIM OF DEPRECIATION OF THE ASSESS EE. ACCORDINGLY, GROUND NOS. 2 AND 3 RAISED BY THE DEPARTME NT IN THE RESPECTIVE APPEALS ARE DISMISSED BEING DEVOID OF ANY MERIT. 15. THE THIRD ISSUE RAISED BY THE DEPARTMENT IN GROUND NO. 4 IS WITH RESPECT TO DISALLOWANCE ON ACCOUNT OF EMPLOYEES CONTRIBU TION TO PROVIDENT FUND AND ESIC AND LABOUR WELFARE FUND AS THE ASSESSEE HAD MADE CONTRIBUTIONS IN THE RESPECTIVE FUNDS AFTER THE DUE DATE AS SPECIFIED UNDER THE PROVISIONS OF RELEVANT ACTS. THE LD. AR HAS CONTENDED THAT ALTHOUGH THE CONTRIBUTION TO THE ABOVE FUNDS WERE MADE AFTER DUE DATE AS SPECIFIED UNDER THE RELEVANT ACTS , BUT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER THE INCOME TAX ACT. THIS FACT HAS NOT BEEN DISPUTED BY THE DEPARTMENT. THE H ON'BLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX V S. ALOM EXTRUSIONS LTD. (SUPRA) HAS HELD THAT THE CONTRIBUTIONS MA DE AFTER DUE DATE AS PRESCRIBED UNDER THE PROVIDENT FUND ACT BUT B EFORE THE DUE DATE OF FILING OF RETURN OF INCOME, THE ASSESSEE IS ELIGIBLE TO C LAIM DEDUCTION THEREOF. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GHATGE PATIL TRANSPORT LTD . (SUPRA) WHILE DEALING WITH THE SIMILAR ISSUE HAS HELD THAT THE CONTRIB UTION 15 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 TOWARDS THE EMPLOYEES SHARE OF PROVIDENT FUND ETC. IS ALLO WABLE IF DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. THE RELEVANT EXTRACT OF THE FINDINGS OF HON'BLE HIGH COURT IS REPRODUCED HERE-IN- BLOW: 13. IN THAT JUDGMENT, THIS COURT HELD THAT NO SUBS TANTIAL QUESTIONS OF LAW WOULD ARISE SINCE SECTION 43B IS INSERTED IN TH E I.T. ACT WITH EFFECT FROM 1ST APRIL, 1984 BY WHICH THE MERCANTILE SYSTEM OF ACCOUNTING WITH REGARD TO TAX, DUTY AND CONTRIBUTION TO WELFARE FUN DS STOOD DISCONTINUED. UNDER SECTION 43B OF THE I.T. ACT, IT BECAME MANDAT ORY FOR THE ASSESSEE TO ACCOUNT FOR SUCH PAYMENT INCLUDING TO WELFARE FU NDS NOT ON MERCANTILE BASIS BUT ON CASH BASIS. THE JUDGMENT FURTHER MENTI ONS THAT THIS SITUATION CONTINUED BETWEEN 1 ST APRIL, 1984 AND 1S T APRIL, 1988. IT IS ALSO NOTICED THATSECTION 43B WAS AGAIN AMENDED AND T HE FIRST PROVISO THERETO HAS BEEN ADDED WHICH WAS RESTRICTED TO TAX, DUTY, CESS OR FEE EXCLUDING LABOUR WELFARE. IN VIEW THEREOF, THE SECO ND PROVISO AS FOLLOWS CAME TO BE INSERTED:- ' PROVIDED FURTHER THAT NO DEDUCTION SHALL, IN RESP ECT OF ANY SUM REFERRED TO IN CLAUSE (B), BE ALLOWED UNLESS SUCH S UM HAS ACTUALLY BEEN PAID DURING THE PREVIOUS YEAR ON OR BEFORE THE DUE DATE AS DEFINED IN THE EXPLANATION BELOW CLAUSE (VA) OF SUB -SECTION (1) OF SECTION 36.' THE SECOND PROVISO WAS FURTHER AMENDED WITH EFFECT FROM 1ST APRIL, 1989 TO READ AS UNDER:- ' PROVIDED FURTHER THAT NO DEDUCTION SHALL, IN RESP ECT OF ANY SUM REFERRED TO IN CLAUSE (B), BE ALLOWED UNLESS SUCH S UM HAS ACTUALLY BEEN PAID IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE ON OR BEFORE THE DUE DATE AS DEFINED IN THE EX PLANATION BELOW CLAUSE (VA) OF SUB-SECTION (1) OF SECTION 36, AND WHERE SUCH PAYMENT HAS BEEN MADE OTHERWISE THAN IN CASH, THE S UM HAS BEEN REALISED WITHIN FIFTEEN DAYS FROM THE DUE DATE .' 14. FROM A READING OF ABOVE, IT IS CLEAR THAT THE E MPLOYER-ASSESSEE WOULD BE ENTITLED TO DEDUCTION ONLY IF THE CONTRIBUTION T O THE EMPLOYEE'S WELFARE FUND STOOD CREDITED ON OR BEFORE THE DUE DATE AND N OT OTHERWISE. IT TRANSPIRES THAT INDUSTRY ONCE AGAIN MADE REPRESENTA TIONS TO THE MINISTRY OF FINANCE TO REMOVE THIS ANOMALY. THE RESULT WAS T HAT AN AMENDMENT WAS INSERTED WHICH CAME INTO FORCE WITH EFFECT FROM 1ST APRIL, 2004 AND TWO CHANGES WERE MADE IN SECTION 43B FIRSTLY BY DEL ETING THE SECOND 16 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 PROVISO AND FURTHER AMENDMENT IN THE FIRST PROVISO WHICH READS AS UNDER:- PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SH ALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE A SSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURN ISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 IN R ESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SU M WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FU RNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN.' 15. IN THIS MANNER, THE AMENDMENT PROVIDED BY FINAN CE ACT, 2003 PUT ON PAR THE BENEFIT OF DEDUCTIONS OF TAX, DUTY, CESS AND FEE ON THE ONE HAND WITH CONTRIBUTIONS TO VARIOUS EMPLOYEES' WELFA RE FUNDS ON THE OTHER. ALL THIS CAME UP FOR CONSIDERATION BEFORE TH E HON'BLE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA). THE TRIBUNAL IN THE CASE AT HAND RELIED UPON THE SAID JUDGMENT. THERE I S NO REASON TO FAULT THE ORDER PASSED BY THE TRIBUNAL. WE ARE OF THE VIE W THAT THE DECISION OF THE SUPREME COURT IN ALOM EXTRUSIONS LTD. APPLIES T O EMPLOYEES' CONTRIBUTION AS WELL AS EMPLOYERS' CONTRIBUTION. Q UESTION NOS.2, 3 & 4 ARE ACCORDINGLY ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 16. THUS, IN VIEW OF THE UNDISPUTED FACT AND THE DECISION O F HON'BLE JURISDICTIONAL HIGH COURT THE GROUND NO. 4 RAISED IN THE CO NCISE GROUNDS OF APPEAL BY THE DEPARTMENT IS DISMISSED BEING DE VOID OF ANY MERIT. 17. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. CO NO. 29/PN/2015 (A.Y. 2008-09) 18. THE ASSESSEE IN ITS CROSS OBJECTION HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING THE SOLITARY ISSUE IN CONFIRMING DISALLOWANCE OF DEDUCTION U/S. 80IA(4) AMOUNTING TO ` 34,89,416/-. THE SIMILAR GROUND HAS BEEN RAISED BY THE AS SESSEE IN 17 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 ITS APPEAL FOR THE ASSESSMENT YEAR 2009-10 AS GROUND NO. 2. WHEREIN, THE ASSESSEE HAS CHALLENGED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S. 80IA(4) AMOUNTING TO ` 33,08,413/-. THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IA(4) ON INCOME FROM GENERATION OF POWER THROUGH WINDMILL. THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE DEALING WITH THE ISS UE HAS CATEGORICALLY STATED THAT THE PROFIT FROM RUNNING OF THE W INDMILL HAS BEEN CALCULATED AFTER INCLUDING SALES TAX BENEFITS RECEIVED B Y THE ASSESSEE IN RESPECT OF WINDMILL. THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S. 80IA(4) ON SUCH BENEFITS. THE DEDUCTION U/S . 80IA(4) CAN BE CLAIMED ONLY ON THE PROFITS DERIVED FROM THE BUSINE SS OF GENERATION OF POWER FROM WINDMILL. THE SALES TAX BENEFITS REC EIVED BY THE ASSESSEE CANNOT BE SAID TO BE DERIVED FROM OR ATTR IBUTABLE TO THE RUNNING OF WINDMILL. THE LD. AR OF THE ASSESSEE FAIRLY CONCEDE D THAT SO FAR AS THE SALE TAX ELEMENT IN THE PROFITS IS CONCERNED, T HE ISSUE IS DECIDED AGAINST THE ASSESSEE BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF LAP FINANCE AND CONSULTANCY P. LTD. VS. ADD L. COMMISSIONER OF INCOME TAX IN ITA NO. 1292/PN/2010 FOR TH E ASSESSMENT YEAR 2006-07 DECIDED ON 28-02-2012. HOWEV ER, THE BENEFIT OF DEDUCTION U/S. 80IA(4) CAN BE GRANTED TO THE ASSESSEE ON THE REMAINING RECEIPTS AFTER EXCLUDING SALES TAX INCENTIVES RECE IVED BY THE ASSESSEE. 19. ON THE OTHER HAND THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE AND PR AYED FOR REJECTING THE GROUND RAISED BY THE ASSESSEE IN CLAIMING D EDUCTION U/S. 80IA(4). 18 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 20. THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IA(4) ON T HE ENTIRE SALE PROCEEDS WHICH INCLUDE SALES TAX INCENTIVE. THE LD. AR OF THE ASSESSEE FAIRLY CONCEDED THAT THE ASSESSEE IS NOT ELIGIBL E TO CLAIM DEDUCTION U/S. 80IA(4) ON THE SALES TAX INCENTIVE RECEIPTS IN VIEW OF THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF LAP FINANCE AND CONSULTANCY P. LTD. VS. ADDL. COMMISSIONER OF INCOME TAX (SUPRA). HOWEVER, THE ASSESSEE IS CLAIMING DEDUCTION U/S. 8 0IA(4) IN RESPECT OF REMAINING AMOUNT. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR HAS DRAWN SUPPORT FROM THE DECISION OF PUNE BENCH OF TH E TRIBUNAL IN THE CASE OF SERUM INTERNATIONAL LTD. VS. ADDL. CIT IN ITA N OS. 290 TO 292/PN/2010 FOR THE ASSESSMENT YEARS 2004-05 TO 2006 -07 DECIDED ON 28-09-2011. WE ARE OF THE CONSIDERED VIEW THAT THIS ISSU E NEEDS A REVISIT TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE CLAIM OF ASSESSEE IN RESPECT OF DEDUCTION U/S. 80IA(4) IN THE LIGHT OF DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CA SE OF SERUM INTERNATIONAL LTD. VS. ADDL. CIT (SUPRA). THE ASSESSING OFFIC ER BEFORE DECIDING THE ISSUE AFRESH SHALL GIVE AN OPPORTUNITY OF HEARIN G TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, THE ISSUE RAISED BY THE ASSESSEE IN CROSS O BJECTION FOR ASSESSMENT YEAR 2008-09 AND GROUND NO. 2 RAISED IN THE APPEAL FOR THE ASSESSMENT YEAR 2009-10 ARE PARTLY ALLOWED FOR STATISTICAL PU RPOSE. 21. IN THE APPEAL FOR THE ASSESSMENT YEAR 2009-10 THE ASSESSEE HAS RAISED 7 GROUNDS. THE GROUND NOS. 1,5,6 AND 7 ARE GENER AL IN NATURE. THE LD. AR OF THE ASSESSEE STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NOS. 3 AND 4 RAISED IN THE GROUNDS OF APPEAL. ACC ORDINGLY, THE SAME ARE DISMISSED AS NOT PRESSED. 19 ITA NOS. 714/PN/2012, 362 & 166/PN/2013 AND CO NO. 29/PN/2015 22. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE D ISMISSED. THE CROSS OBJECTION OF THE ASSESSEE FOR ASSESSMENT YEAR 20 08-09 AND THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON MONDAY, THE 09 TH DAY OF MAY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 09 TH MAY, 2016 RK ,-*%./#0#). / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-II, PUNE 4. ' / THE CIT-II, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE