DCIT, Hubli V. M/s Mahalingshetty & Company Limited, Hubli

ITA 250/BANG/2012

• Counselvise Citation: 25021114 RSA 2012
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SUNDAR RAJAN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRI BNAL BANGALORE BENCH C, BANGALORE BEFORE SMT. P. MADAHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.250(BNG.)/2012 (ASSESSMENT YEAR : 2008-09) THE DY. CIT, M/S MAHALINGS HETTY & CO.,LTD., CIRCLE-3(1), NO.64, VISHWESHWAR NAGAR, HUBLI HUBLI PAN NO.AAACM 2531L VS APPELLANT RESPONDENT REVENUE BY : SHRI A SUNDAR RAJAN, JCIT ASSESSEE BY : SMT. PRATIBHA R, ADVOCATE DATE OF HEARING : 25-10-2012 DATE OF PRONOUNCEMENT : 02 -11-2012 O R D E R PER SMT P. MADHAVI DEVI, JM: THIS IS REVENUES APPEAL FOR THE ASSESSMENT YEAR 20 08-09 AGAINST THE ORDER OF THE CIT(A), HUBLI. 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN HOLDING THAT THE LOSS ON ACCOUNT OF WIND MILL BU SINESS I.E. ELIGIBLE BUSINESS AS PER SEC.80IA IS ALLOWABLE FOR SET OFF A GAINST INCOME FROM ANOTHER HEAD OF INCOME. 2.1 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL; ITA NO.250(B)/2012 2 1. THE LD. CIT(A) ERRED IN HOLDING THAT THE LOSS ON ACCOUNT OF WIND MILL BUSINESS I.E. ELIGIBLE BUSINESS AS PER SEC.80I A, IS ALLOWABLE FOR SET OFF AGAINST INCOME UNDER OTHER HEADS. 2.THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE WIND MILL BUSINESS FALLS UNDER THE CATEGORY OF ELIGIBLE BUSIN ESS AS PER SEC.80IA AND ALSO THAT SEC.80IA(5) HAS OVERRIDING E FFECT ON ANY OTHER PROVISIONS UNDER THE ACT INCLUDING SEC.70 AND 71. 3. THE DECISION OF THE HIGH COURT OF KARNATAKA, CI RCUIT BENCH DHARWAD IN THE CASE OF M/S SWARNAGIRI WIRE INSULATI ONS IN ITA NO.5050/2010 HAS BEEN ACCEPTED BY THE DEPARTMENT ME RELY ON THE GROUND OF MONETARY CEILINGS FIXED BY THE CBDT F OR FILING SLP. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY, WHICH IS IN THE BUSINESS OF CIVIL CONTRACTS, DERIVED INCO ME FROM EXECUTING CIVIL CONTRACTS. IN ADDITION TO THIS, THE ASSESSEE COMPA NY HAS INSTALLED WIND TURBINE GENERATOR IN TAMILNADU WHICH IS ELIGIBLE FO R DEDUCTION U/S 80IA OF THE ACT. HOWEVER, THE ASSESSEE DID NOT MAKE ANY CLAIM U/S 80IA OF THE IT ACT. THE AO DURING THE ASSESSMENT PROCEEDINGS U /S 143(3), OBSERVED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80I A WITH REGARD TO INCOME FROM WIND TURBINE GENERATOR AT THE RATE OF 100% OF PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR 10 CONSECUTIVE ASSES SMENT YEARS OUT OF 15 YEARS BEGINNING WITH THE YEAR IN WHICH THE ASSESSEE GENERATES POWER OR COMMENCES TRANSMISSION/DISTRIBUTION OF POWER. HE OB SERVED THAT THE WIND TURBINE GENERATOR WAS COMMISSIONED ON 28-03-20 07. THEREFORE, THE INCOME/LOSS UNDER THIS BUSINESS HAS TO BE COMPUTED SEPARATELY IN ORDER ITA NO.250(B)/2012 3 TO PROVIDE ELIGIBLE DEDUCTION FOR 10 CONSECUTIVE AS SESSMENT YEARS. THE ASSESSEES EXPLANATION WAS CALLED FOR. IN REPLY TO THE SAME, THE ASSESSEE COMPANY OBJECTED TO THE PROPOSAL OF EXCLUDING THE S AID AMOUNT FROM THE TOTAL INCOME AS DEDUCTION ON THE GROUND THAT THE LO SS HAS ARISEN ON ACCOUNT OF INTEREST AND DEPRECIATION CLAIMED AS PER THE PROVISIONS OF IT ACT, WITHOUT CLAIMING DEDUCTION U/S 80IA OF THE IT ACT, 1961 AND HENCE HAS TO BE SET OFF FROM THE PROFITS AND GAINS OF BUS INESS OF THE ASSESSEE. THE AO HOWEVER, REJECTED THE ASSESSEES OBJECTION A ND HELD THAT LOSS OUT OF WIND MILL IS TO BE SEPARATELY COMPUTED AND ALLOWED TO BE CARRIED FORWARD AND NOT SET OFF FROM THE [PROFIT AND GAINS OF PROFE SSION OR BUSINESS. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A) WHO ALLOWED THE SAME BY FOLLOWING THE DECISION OF THE C O-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S SWARNAGIRI WIRE INSULAT IONS (P)LTD., AN APPEAL BY THE REVENUE AGAINST WHICH IS DISMISSED BY THE HO NBLE JURISDICTIONAL HIGH COURT OF DHARWAR BENCH. HE DIRECTED THE AO TO ALLOW THE SET OFF OF ENTIRE LOSS FROM WIND MILL BUSINESS FROM THE INCOME FROM THE OTHER HEADS. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5.1 WHILE THE LEARNED DR STRONGLY SUPPORTED THE OR DER OF THE AO, THE LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THA T THE SAME ISSUE HAD ARISEN IN THE ASSESSEES OWN CASE FOR THE ASSESSMEN T YEAR 2007-08 AND THIS TRIBUNAL AFTER TAKING NOTE OF THE DECISION OF THE ITAT IN THE CASE OF M/S SWARNAGIRI WIRE INSULATION (P)LTD., HAS UPHELD THE FINDING OF THE ITA NO.250(B)/2012 4 CIT(A). THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE HONBLE HIGH COURT OF KARNATAKA DHARWAR BENCH ALREA DY HAD DISMISSED THE REVENUES APPEAL AGAINST THE DECISION OF THE TR IBUNAL IN THE CASE OF SWARNAGIRI WIRE INSULATION CITED SUPRA AND THEREFOR E, THE DECISION OF ITAT HAS BECOME FINAL. A COPY OF THE ORDER OF THE TRIB UNAL IN ASSESSEES OWN CASE IN ITA NO.200/BANG/2010 DATED 30-01-2012 TO WH ICH ONE OF US I.E JM IS A PARTY IS FILED. 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT THE FOLLOWING THE DECISIO N OF THE ITAT IN THE CASE OF M/S SWARNAGIRI WIRE INSULATIONS (P) LTD., CITED SUPRA. THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200 7-08, HAS DIRECTED THE AO TO ALLOW THE CLAIM OF SET OFF OF LOSS FROM THE W IND MILL BUSINESS FROM INCOME FROM OTHER SOURCES OF BUSINESS WHICH ARE B OTH TAXABLE UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION. IN VIEW OF THE SAME, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A ) WHICH IS IN CONSONANCE WITH THE ORDER OF THE JUDICIAL PRECEDENTS ON THIS I SSUE. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THE 2 ND NOVEMBER, 2012. SD/- SD/- (JASON P BOAZ) (P. MADHA VI DEVI) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE: D A T E D : 02-11-2012 AM* ITA NO.250(B)/2012 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-IV, BANGALORE. 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE (1+1) BY ORDER SR. PRIVATE SECRETARY ITAT, BANGALORE