DCIT, Hubli V. Shri. Kashyap J majethia, Hubli

ITA 212/BANG/2012

• Counselvise Citation: 21221114 RSA 2012
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ETWA MUNDA
• Assessee Lawyers: V SRINIVASAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH C BEFORE SHRI N BARATHVAJA SANKAR, VICE RESIDENT AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO.212/BAN G/2012 (ASST. YEAR - 2008-09) |THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE- 1(1), HUBLI. . APPELLANT VS. SHRI KASHYAP J MAJETHIA, , HUBLI. . RESPONDENT APPELLANT BY : SHRI ETWA MUNDA, CIT RESPONDENT BY : SHRI V SRINIVASAN, C.A DATE OF HEARING : 12-12-2012 DATE OF PRONOUNCEMENT : 12 -12-2012 O R D E R PER P MADHAVI DEVI, JUDICIAL MEMBER THIS APPEAL IS FILED BY THE REVENUE. THE RELEVANT A SSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS) HUBLI. THE A PPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143 OF THE INCOME-T AX ACT, 1961. ITA NO.212/B/12 2 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) HOLDING THAT THE LOSS ON ACCOUNT OF WIND MI LL BUSINESS I.E ELIGIBLE BUSINESS AS PER SEC. 80IA IS ALLOWABLE FOR SET OFF AGAINST THE INCOME UNDER OTHER HEADS. 3. THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) HAS FAILED TO APPRECIATE THAT THE WIND MILL BUSINESS FALLS UNDER THE CATEGORY OF ELIGIBLE BUSINESS AS PER SEC. 80IA AND ALSO THAT SU B SEC. 5 OF SEC. 80IA HAS OVERRIDING EFFECT ON ANY OTHER PROVISIONS UNDE R THE ACT INCLUDING SEC. 70 AND 71 AND THAT THE CIT(A) HAS ERRONEOUSLY PLACED RELIANCE UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF SW ARNAGIRI WIRE INSULATIONS, WHICH HAS BEEN ACCEPTED BY THE HONB LE HIGH COURT OF KARNATAKA AND THE DEPARTMENTAL APPEAL HAS BEEN DI SMISSED AND NOT APPEALED AGAINST THE GROUND OF MONETARY CEILINGS F IXED BY THE CBDT FOR FILING SLP. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WHO IS AN INDIVIDUAL DERIVES INCOME FROM PROPERTY AND ALSO FR OM WINDMILL POWER GENERATING ELECTRICITY. FOR THE RELEVANT ASS ESSMENT YEAR I.E ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS FILED A R ETURN OF INCOME DECLARING A LOSS OF RS.1,57,11,020/-. THE AO OBSERVED FROM THE DETAILS FILED ITA NO.212/B/12 3 BEFORE HIM THAT THIS LOSS IS ARISING FROM WIND MILL PROJECT AND THE ASSESSEE HAS SET OFF THE SAME FROM HIS OTHER SOURC ES OF INCOME I.E PROPERTY AND OTHER SOURCES RESULTING IN NET LOSS OF RS.1,57,11,020/-. HE OBSERVED THE WINDMILL PROJECT IN AN ELIGIBLE BUS INESS U/S 80IA OF THE ACT AND THAT SUB SEC. 5 OF SEC. 80IA COMES INTO PLAY AND, THEREFORE, THE ASSESSEE IS ENTITLED TO SET OFF OF T HE LOSS OF WINDMILL PROJECT ONLY AGAINST THE PROFITS OF ELIGIBLE BUSINE SS AND WHERE THERE IS NO SUCH PROFIT, THE SAME IS TO BE CARRIED FORWARD TO THE SUBSEQUENT YEARS. HE THUS DISALLOWED THE SET OFF OF LOSS OF W INDMILL PROJECT FROM INCOME FROM PROPERTY AND INCOME FROM OTHER SOURCES. 5. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DELETED THE DISALLOWANCE AND DIRECTED THE AO TO ALL OW THE SET OFF OF LOSSES FROM WIND MILL BUSINESS AGAINST THE INCOME F ROM OTHER SOURCES BY FOLLOWING THE DECISION OF THE ITAT IN THE CASE S WARNAGIRI WIRE INSULATIONS (CITED SUPRA) AND ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SYNCO INDUSTRIES LTD. VS. AO AND OTHERS REPORTED IN 299 ITR 444 (SC). 6. AGAINST THE RELIEF GIVEN BY THE CIT(A), THE REVE NUE IS IN APPEAL BEFORE US. ITA NO.212/B/12 4 7. THE LEARNED DR, WHILE SUPPORTING THE ORDER OF TH E AO, SUBMITTED THAT IN THE CASE OF SWARNAGIRI WIRES INSU LATIONS (CITED SUPRA), THE TRIBUNAL WAS DEALING WITH THE CASE WHER E THERE WAS A LOSS FROM ONE SOURCE WHICH WAS DIRECTED TO BE SET OFF AG AINST ANOTHER SOURCE OF INCOME UNDER THE SAME HEAD U/S 70(1). HE SUBMITTED THAT IN THE CASE OF THE ASSESSEE, IT IS SEEKING TO SET OFF OF THE LOSS FROM THE ELIGIBLE BUSINESS AGAINST THE INCOME FROM OTHER HEA DS, WHICH IS NOT PERMISSIBLE. HE FURTHER SUBMITTED THAT THE DEPARTM ENT COULD NOT FILE AN APPEAL BEFORE THE HONBLE SUPREME COURT AGAINST THE ORDER OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF SWARNAG IRI WIRE INSULATIONS (CITED SUPRA), BUT THE MERITS OF THE CA SE SHOULD BE CONSIDERED BY THIS TRIBUNAL IN THIS CASE INDEPENDEN TLY. 8. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHE R HAND SUBMITTED THAT TILL THE RELEVANT ASSESSMENT YEAR, T HE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION U/S 80IA OF THE INCOME-TAX AC T AND, THEREFORE, THE LOSS FROM THE ELIGIBLE BUSINESS HAS TO BE TREAT ED LIKE ANY OTHER BUSINESS LOSS AND HAS TO BE SET OFF AGAINST THE INC OME UNDER OTHER HEADS AS PROVIDED UNDER SUB SEC 1 OF SEC. 71 OF TH E INCOME-TAX ACT. HE PLACED RELIANCE UPON THE DECISION OF THE HONBLE APEX COURT IN THE ITA NO.212/B/12 5 CASE OF SYNCO INDUSTRIES (CITED SUPRA) AND THAT OF THE TRIBUNAL IN THE CASE OF SWARNAGIRI WIRE INSULATIONS (CITED SUPRA) A ND ALSO THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08. 9. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THEIR RIVAL CONTENTIONS, WE FIND THAT FACTS AND CIRCUMSTANCES I N THE PRESENT ASSESSMENT YEAR ARE EXACTLY THE SAME AS IN THE ASSE SSMENT YEAR 2007- 08 IN THE ASSESSEES OWN CASE AND, THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) WHICH IS IN CONSONANCE WITH THE PRECEDENTS ON THE ISSUE. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 2 TH DEC,2012. SD/- SD/- (N BARAT HVAJA SANKAR) (P MADHAVI DEVI) VICE PRESIDENT JUDICIAL MEMBER ( VMS. BANGALORE DATED : 12/12/2012 ITA NO.212/B/12 6 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETA RY, ITAT, BANGALORE.