ACIT, Coimbatore V. M/s. Ambika Cotton Mills Ltd., Coimbatore

ITA 1931/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96293 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SRINIVASA RAO
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Services rendered outside India; Deemed to accrue or arise in india; Cost of acquisition; Capital receipt

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.1931/MDS/2013 ( / ASSESSMENT YEAR: 2010-11) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(3) 63-A RACE COURSE ROAD, COIMBATORE. VS M/S. AMBIKA COTTON MILLS LTD., 9A, VALLUVAR STREET, SIVANANDA COLONY, COIMBATORE-641 012. PAN:AABCA8985E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. M.SRINIVASA RAO, CIT /RESPONDENT BY : DR.ANITA SUMANTH, ADVOCATE /DATE OF HEARING : 15 TH SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 29 TH OCTOBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBAT ORE DATED 27.08.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. THE FIRST ISSUE IN THE APPEAL OF THE REVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONSI DERING THAT CLEAN DEVELOPMENT MECHANISM (CDM) RECEIPTS ARE NOT SUBSIDIES BUT TRADING RECEIPT. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSES SEE IN 2 ITA NO.1931/MDS/2013 ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO.1836/MDS/2012 DATED 16.04.2013. REFERRING TO THE SAID DECISION, COUNSEL SUBMITS THAT THE TRIBUNAL HELD TH AT SAID RECEIPTS ARE CAPITAL IN NATURE AND NOT REVENUE RECE IPTS. 4. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON T HE ORDER OF THE ASSESSING OFFICER . 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. ON GOING THROUGH THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS) WE FIND THAT COMMISSIONER OF INCOME T AX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE HODLING THAT CLEAN DEVELOPMENT MECHANISM WOULD CONSTITUTE CAPIT AL RECEIPT IN THE HANDS OF THE ASSESSEE FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2009-10. THE CO-ORDINATE BENCH WHIL E DECIDING THE NATURE OF RECEIPT I.E WHETHER CAPITAL OR REVENUE HELD AS UNDER:- WE HAVE HEARD BOTH PARTIES AND PERUSED THE RELEVAN T FINDINGS AS WELL AS CASE LAW CITED (SUPRA). THE FIR ST CONTENTION OF THE ASSESSEE IS THAT THE AMOUNT OF ` 3,39,64,303/- REPRESENTING REALIZATION OF ENTIRE CA RBON CREDITS IS A CAPITAL RECEIPT WHICH IS CONTESTED BY THE REVENUE, WHO TERMS IT AS REVENUE RECEIPT LIABLE TO BE TAXED. WE MAKE IT CLEAR THAT THERE IS NO ISSUE BETW EEN THE PARTIES QUA REALIZATION OF THE AMOUNT IN QUESTI ON OR ITS SOURCE AND THE DISPUTE IS REGARDING NATURE OF R ECEIPT I.E. WHETHER CAPITAL OR REVENUE. IN THIS BACKDROP, WE FIND THAT THE VERY ISSUE STANDS ADJUDICATED BY THE COORD INATE 3 ITA NO.1931/MDS/2013 BENCH OF ITAT, HYDERABAD (SUPRA) WHEREIN IT HAS BEE N HELD AS UNDER: 24. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. CARBON CREDIT IS IN THE NATURE OF 'AN ENTITLEMENT' RECEIVED TO IMPROVE WORLD ATMOSPHERE A ND ENVIRONMENT REDUCING CARBON, HEAT AND GAS EMISSIONS . THE ENTITLEMENT EARNED FOR CARBON CREDITS CAN, AT B EST, BE REGARDED AS A CAPITAL RECEIPT AND CANNOT BE TAXE D AS A REVENUE RECEIPT. IT IS NOT GENERATED OR CREATED D UE TO CARRYING ON BUSINESS BUT IT IS ACCRUED DUE TO 'WORL D CONCERN'. IT HAS BEEN MADE AVAILABLE ASSUMING CHARACTER OF TRANSFERABLE RIGHT OR ENTITLEMENT ONLY DUE TO WORLD CONCERN. THE SOURCE OF CARBON CREDIT IS WORLD CONCERN AND ENVIRONMENT. DUE TO THAT THE ASSESSEE G ETS A PRIVILEGE IN THE NATURE OFTRANSFER OF CARBON CRED ITS. THUS, THE AMOUNT RECEIVED FOR CARBON CREDITS HAS NO ELEMENT OF PROFIT OR GAIN AND IT CANNOT BE SUBJECTE D TO TAX IN ANY MANNER UNDER ANY HEAD OF INCOME. IT IS N OT LIABLE FOR TAX FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IN TERMS OF SECTIONS 2(24), 28, 45 AN D 56 OF THE INCOME-TAX ACT, 1961. CARBON CREDITS ARE MAD E AVAILABLE TO THE ASSESSEE ON ACCOUNT OF SAVING OF ENERGY CONSUMPTION AND NOT BECAUSE OF ITS BUSINESS. FURTHER, IN OUR OPINION, CARBON CREDITS CANNOT BE CONSIDERED AS A BI-PRODUCT. IT IS A CREDIT GIVEN TO THE ASSESSEE UNDER THE KYOTO PROTOCOL AND BECAUSE OF INTERNATIONAL UNDERSTANDING. THUS, THE ASSESSEES WH O HAVE SURPLUS CARBON CREDITS CAN SELL THEM TO OTHER ASSESSEES TO HAVE CAPPED EMISSION COMMITMENT UNDER THE KYOTO PROTOCOL. TRANSFERABLE CARBON CREDIT IS N OT A RESULT OR INCIDENCE OF ONE'S BUSINESS AND IT IS A C REDIT FOR REDUCING EMISSIONS. THE PERSONS HAVING CARBON CREDI TS GET BENEFIT BY SELLING THE SAME TO A PERSON WHO NEE DS CARBON CREDITS TO OVERCOME ONE'S NEGATIVE POINT CAR BON CREDIT. THE AMOUNT RECEIVED IS NOT RECEIVED FOR PRODUCING AND/OR SELLING ANY PRODUCT, BI-PRODUCT OR FOR RENDERING ANY SERVICE FOR CARRYING ON THE BUSINESS. IN OUR OPINION, CARBON CREDIT IS ENTITLEMENT OR ACCRE TION OF CAPITAL AND HENCE INCOME EARNED ON SALE OF THESE CREDITS IS CAPITAL RECEIPT. FOR THIS PROPOSITION, W E PLACE RELIANCE ON THE JUDGEMENT OF THE SUPREME COURT IN T HE CASE OF CIT VS. MAHESHWARI DEVI JUTE MILLS LTD. (57 ITR 36) WHEREIN HELD THAT TRANSFER OF SURPLUS LOOM HOUR S TO OTHER MILL OUT OF THOSE ALLOTTED TO THE ASSESSEE UN DER AN AGREEMENT FOR CONTROL OF PRODUCTION WAS CAPITAL REC EIPT AND NOT INCOME. BEING SO, THE CONSIDERATION RECEIVE D BY THE ASSESSEE IS SIMILAR TO CONSIDERATION RECEIVED B Y TRANSFERRING OF LOOM HOURS. THE SUPREME COURT 4 ITA NO.1931/MDS/2013 CONSIDERED THIS FACT AND OBSERVED THAT TAXABILITY O F PAYMENT RECEIVED FOR SALE OF LOOM HOURS BY THE ASSESSEE IS ON ACCOUNT OF EXPLOITATION OF CAPITAL A SSET AND IT IS CAPITAL RECEIPT AND NOT AN INCOME. SIMILA RLY, IN THE PRESENT CASE THE ASSESSEE TRANSFERRED THE CARBO N CREDITS LIKE LOOM HOURS TO SOME OTHER CONCERNS FOR CERTAIN CONSIDERATION. THEREFORE, THE RECEIPT OF SU CH CONSIDERATION CANNOT BE CONSIDERED AS BUSINESS INCO ME AND IT IS A CAPITAL RECEIPT. ACCORDINGLY, WE ARE OF THE OPINION THAT THE CONSIDERATION RECEIVED ON ACCOUNT OF CARBON CREDITS CANNOT BE CONSIDERED AS INCOME AS TAXABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. CARBON CREDIT IS NOT AN OFFSHOOT OF BUSINESS BUT AN OFFSHOOT OF ENVIRONMENTAL CONCERNS. NO ASSET IS GENERATED IN THE COURSE OF BUSINESS BUT IT IS GENER ATED DUE TO ENVIRONMENTAL CONCERNS. CREDIT FOR REDUCING CARBON EMISSION OR GREENHOUSE EFFECT CAN BE TRANSFERRED TO ANOTHER PARTY IN NEED OF REDUCTION O F CARBON EMISSION. IT DOES NOT INCREASE PROFIT IN ANY MANNER AND DOES NOT NEED ANY EXPENSES. IT IS A NATU RE OF ENTITLEMENT TO REDUCE CARBON EMISSION, HOWEVER, THERE IS NO COST OF ACQUISITION OR COST OF PRODUCTI ON TO GET THIS ENTITLEMENT. CARBON CREDIT IS NOT IN THE NATUR E OF PROFIT OR IN THE NATURE OF INCOME. 25. FURTHER, AS PER GUIDANCE NOTE ON ACCOUNTING FOR SELF- GENERATED CERTIFIED EMISSION REDUCTIONS (CERS) ISSU ED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI) IN JUNE, 2009 STATES THAT CERS SHOULD BE RECOGNISED IN BOOKS WHEN THOSE ARE CREATE D BY UNFCCC AND/OR UNCONDITIONALLY AVAILABLE TO THE GENERATING ENTITY. CERS ARE INVENTORIES OF THE GENERATING ENTITIES AS THEY ARE GENERATED AND HELD FOR THE PURPOSE OF SALE IN ORDIN ARY COURSE. EVEN THOUGH CERS ARE INTANGIBLE ASSETS THOS E SHOULD BE ACCOUNTED AS PER AS-2 (VALUATION OF INVENTORIES) AT A COST OR MARKET PRICE, WHICHEVER I S LOWER. SINCE CERS ARE RECOGNISED AS INVENTORIES, TH E GENERATING ASSESSEE SHOULD APPLY AS-9 TO RECOGNISE REVENUE IN RESPECT OF SALE OF CERS. 26. THUS, SALE OF CARBON CREDITS IS TO BE CONSIDERE D AS CAPITAL RECEIPT. THIS GROUND IS ALLOWED. TAKING CUE FROM THE SAME, WE ALSO HOLD THAT THE CIT (A) HAS ERRED IN CONFIRMING ADDITION MADE BY THE ASSESS ING OFFICER HOLDING HEREIN THAT THE REALIZATION OF CARB ON CREDIT IN QUESTION BY THE ASSESSEE GIVES RISE TO A REVENUE RECEIPT. THEREFORE, THE ADDITION STANDS DEL ETED. 5 ITA NO.1931/MDS/2013 6. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2009-10, WE HOLD THAT CARBO N CREDIT RECEIPTS ARE CAPITAL IN NATURE AND THUS, WE UPHOLD THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND REJECT THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE. 7. THE NEXT ISSUE IN THE GROUNDS OF APPEAL OF THE R EVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER FOREIGN COMMISSION PAYMENT WAS MADE ONLY F OR THE PURPOSE OF MANAGING SALES OF THE ASSESSEE OUTSIDE I NDIA BY MEANS OF ENGAGING AGENTS AND AS PER THE PROVISIONS OF SECTION 9(1)(VII) OF THE ACT ANY PAYMENT MADE FOR T HE PURPOSE OF RENDERING MANAGERIAL SERVICES OUTSIDE INDIA SHAL L BE CONSIDERED ONLY AS PAYMENT MADE FOR FEES FOR TECHNI CAL SERVICES. 8. THE ASSESSING OFFICER WHILE COMPLETING THE ASSES SMENT DISALLOWED FOREIGN COMMISSION PAID BY THE ASSESSEE TO NON- RESIDENT AGENTS FOR THE REASON THAT ASSESSEE HAS FA ILED TO DEDUCT TDS ON THE ABOVE SAID PAYMENTS, THUS MAKING DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT. TH E ASSESSING OFFICER WAS OF THE VIEW THAT SALES COMMIS SION PAID TO FOREIGN AGENTS IS IN THE NATURE OF FEES FOR TECH NICAL SERVICES 6 ITA NO.1931/MDS/2013 AS IT WAS PAID FOR MANAGERIAL SERVICES. IT WAS THE CONTENTION OF THE ASSESSEE THAT SALES COMMISSION PAID TO FOREI GN AGENT IS NOT TAXABLE IN INDIA THEREFORE PROVISIONS OF SEC TION 195 HAVE NO APPLICATION. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANCE FOLLOWING TH E DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ITO VS. FAIZAN SHOES (34 TAXMANN.COM 79) AND THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF G.E. INDIA TECHNOLOGY CENTRE PVT. LTD. (327 ITR 456). 9. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE ASSESSING OFFICER IN DISALLOWING SALES COMMISSION PAID TO FOREIGN AGENTS. 10. COUNSEL FOR THE ASSESSEE PLACES RELIANCE ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE O F ITO VS. FAIZAN SHOES (SUPRA). 11. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES AND THE DECISIONS RELIED ON. THIS ISSUE HAS BEEN CO NSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS) WITH RE FERENCE TO THE CONTENTIONS OF THE ASSESSEE AS WELL AS THE A SSESSING 7 ITA NO.1931/MDS/2013 OFFICER AND BY FOLLOWING THE JURISDICTIONAL HIGH CO URT DECISION IN THE CASE OF ITO VS. FAIZAN SHOES (SUPRA) DELETED THE DISALLOWANCE OBSERVING AS UNDER:- 6. GROUND NO.3 : THIS GROUND OF APPEAL IS AGAINST THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION U/S 40(A)( IA) FOR NON- DEDUCTION OF TDS IN RESPECT OF COMMISSION PAID TO F OREIGN AGENT. THE APPELLANT MADE DETAILED SUBMISSIONS IN T HE GROUND OF APPEAL. THE FOREIGN COMMISSION AGENT PROCURED EX PORT ORDERS AND THEY ARE ALSO ACTING AS AGENT FOR OTHER SPINNING MILLS IN INDIA AS WELL AS SPINNING MILLS IN PAKISTAN, IND ONESIA, KOREA AND OTHER COUNTRIES. THEY ARE ENGAGED IN THE BUSINE SS OF COMMISSION AGENT FOR SALE OF YARN. THE EXPORT SALES ARE MADE BASED ON PRICE AND CREDITWORTHINESS OF THE BUYER. S ALES ARE AGAINST IRREVOCABLE LETTER OF CREDIT. THE ISSUE OF DISALLOWANCE U/S 40(A)(IA) IS CONTRARY TO THE DECISION OF THE HO N'BLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE PRI VATE LIMITED VS CIT (2007) 327 ITR 456 WHEREIN THE HON'B LE APEX COURT HAS HELD THAT TO INVOKE THE PROVISIONS OF SEC TION 195 OF THE ACT, THE INCOME SHOULD BE CHARGEABLE TO TAX IN INDIA. FURTHER, THE ISSUE OF DISALLOWANCE U/S 40(A)(IA) FO R NON- DEDUCTION OF TDS IN RESPECT OF FOREIGN COMMISSION A GENTS IS COVERED UNDER RECENT JURISDICTIONAL ITAT DECISION I NCOME TAX OFFICER VS FAIZAN SHOES PRIVATE LIMITED (2013) 34 TAXMAN.COM 79. 7. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AND ALSO THE ORDER OF THE ASSESSING OFFICER. THE HO N'BLE ITAT, CHENNAI IN FAIZAN SHOES PRIVATE LIMITED (2013) DELE TED THE ADDITION MADE U/S 40(A)(IA) FOR NON-DEDUCTION OF TD S IN THE MATTER OF PAYMENT OF COMMISSION TO NON-RESIDENT AGE NT FOR PROCURING EXPORT ORDERS. THE HON'BLE TRIBUNAL HELD THAT PAYMENT TO THEM DID NOT FALL UNDER THE CATEGORY OF ROYALTY OR FEES FOR TECHNICAL SERVICES U/S 9(1)(VI) AND FURTHE R WHEN THE SERVICES ARE PROVIDED OUTSIDE INDIA, THE COMMISSION PAYMENTS MADE TO NON-RESIDENT, CANNOT BE TREATED AS INCOME D EEMED TO ACCRUE OR ARISE IN INDIA AND PROVISION OF SECTION 1 95 HAS NO APPLICATION. THE HON'BLE ITAT ALSO STATED THAT THE CASE IS SQUARELY COVERED BY THE DECISION OF THE SUPREME COU RT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE PRIVATE LIMITED VS CIT (2007) 327 ITR 456 WHEREIN THE HON'BLE SUPREME COUR T HELD THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS WHEN NON- RESIDENT PROVIDED SERVICE OUTSIDE INDIA. IT WAS HEL D THAT WHEN THE SERVICES ARE PROVIDED OUTSIDE INDIA, THE COMMIS SION PAYMENTS MADE TO NON-RESIDENT CANNOT BE TREATED AS INCOME DEEMED TO ACCRUE OR ARISE IN INDIA, THEREFORE THE P ROVISIONS OF SECTION 195 HAS NO APPLICATION. IT IS CLEAR THAT IN ORDER TO INVOKE THE PROVISIONS OF SECTION 195 OF THE INCOME TAX ACT, THE INCOME SHOULD BE CHARGEABLE TO TAX IN INDIA. HERE, THE 8 ITA NO.1931/MDS/2013 COMMISSION PAYMENTS TO NON-RESIDENT IN THE CASE OF THE APPELLANT ARE NOT CHARGEABLE TO TAX IN INDIA AND TH EREFORE THE PROVISIONS OF SECTION 195 ARE NOT APPLICABLE. IN TH E CASE OF APPELLANT, THE FACTS ARE SIMILAR AND THE DECISION O F THE HON'BLE SUPREME COURT AND ALSO THE JURISDICTIONAL TRIBUNAL DECISION REFERRED TO ABOVE IS SQUARELY APPLICABLE. HENCE, TH E ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION MADE U/S 40(A)(IA} FOR NON-DEDUCTION OF TDS IN RESPECT OF COMMISSION PAYME NTS TO NON-RESIDENT. THIS GROUND OF APPEAL IS ALLOWED. 12. ON GOING THROUGH THE ABOVE ORDER , WE DO NOT FI ND ANY INFIRMITY IN THE FINDINGS OF THE COMMISSIONER OF IN COME TAX (APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPECT OF SALES COMMISSION PA ID TO FOREIGN AGENTS. THUS, WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE AND REJECT THE GROUNDS RAISED BY THE REVENUE. 13. THE LAST ISSUE IN THE APPEAL OF THE REVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDI NG THAT ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80 IA OF THE ACT ON WINDMILLS. THE ASSESSEE IN THE RETURN OF INC OME CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT IN RESPECT OF INSTALLATION OF WINDMILL BY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF SRI VELAYU DHASAMY SPINNING MILLS PVT.LTD. (231 CTR 368). HOWEVER, TH E ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE FOR 9 ITA NO.1931/MDS/2013 THE REASON THAT THE DECISION OF THE JURISDICTIONAL HIGH COURT HAS NOT BECOME FINAL AND THE DEPARTMENT HAS PREFERR ED SLP BEFORE THE HONBLE SUPREME COURT AND IS PENDING FOR DECISION. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE AGAINST WHICH RE VENUE IS IN APPEAL BEFORE US. 14. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDER OF THE ASSESSING OFFICER. 15. COUNSEL FOR THE ASSESSEE PLACES RELIANCE ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF SRI VELAYUDHASAMY SPINNING MILLS PVT.LTD. (SUPRA). 16. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES AND THE DECISION RELIED ON. THE COMMISSIONER OF INC OME TAX (APPEALS) ALLOWED THE CLAIM OF DEDUCTION UNDER SECT ION 80IA IN RESPECT OF WINDMILL OF THE ASSESSEE OBSERVING AS UNDER:- 8. . GROUND NO.4 : THIS GROUND OF APPEAL IS REGARDING DISALLOWANCE OF THE CLAIM OF DEDUCTION U/S 80LA OF THE INCOME TAX ACT. AS SEEN FROM FACTS, THE ASSESSEE HAS CLAIM ED 80LA DEDUCTION ON THE BASIS OF THE HON'BLE JURISDICTIONA L DECISION IN THE CASE OF SRI VELAYUDHASAMY SPINNING MILLS PRI VATE LIMITED 231 CTR 368 (MADRAS). THE ASSESSING OFFICER IN HIS ORDER HAS DISALLOWED THE CLAIM U/S 80LA ON ACCOUNT OF SPECIAL LEAVE PETITION FILED BEFORE THE HON'BLE SUPREME COU RT. HOWEVER, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE 10 ITA NO.1931/MDS/2013 HIGH COURT IN THE CASE OF SRI VELAYUDHASAMY SPINNIN G MILLS PRIVATE LIMITED, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE APPELLANT U/S 801A. THIS GROUND OF APP EAL IS ALLOWED. 17. SINCE THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BASED ON THE DECI SION OF JURISDICTIONAL HIGH COURT IN THE CASE OF SRI VELAYU DHASAMY SPINNING MILLS PVT.LTD.(SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY HIM. THUS, WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE AND REJECT THE GROUNDS RAISED BY THE REVENUE. 18. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 29 TH OCTOBER, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2.RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .