Deputy Commissioner of Income-tax, Circle - 7, Pune V. M/s. L.B. Kunjir, Pune

ITA 2614/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0924 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 13-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU
• Section: 143(3); 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO .76/PUN/2019 / ASSESSMENT YEAR : 2012 - 13 ASST. COMMISSIONER OF INCOME TAX, CIRCLE 7, PUNE ....... / APPELLANT / V/S. M/S. L.B. KUNJIR, S. NO. 52/1, SWANAND BUILDING, SHRIRAM CO - OP. HSG. SOC. KHARADI, PUNE 411014 PAN : AABFL9816E / RESPONDENT . / ITA NO . 2614 /PUN/201 7 / ASSESSMENT YEAR : 20 13 - 14 DY. COMMISSIONER OF INCOME TAX, CIRCLE 7 , PUNE ....... / APPELLANT / V/S. M/S. L.B. KUNJIR, S. NO. 50/1, SWANAND BUILDING, SHRIRAM CO - OP. HSG. SOC. KHARADI, PUNE 411014 PAN : AABFL9816E / RESPONDENT 2 ITA NO S.76/PUN/2019, 2614/PUN/2017 & 07/PUN/2018 . / ITA NO .07/PUN/2018 / ASSESSMENT YEAR : 2014 - 15 JT. COMMISSIONER OF INCOME TAX (OSD), CIRCLE 7, PUNE ....... / APPELLANT / V/S. M/S. L.B. KUNJIR, S. NO. 52/1, SWANAND BUILDING, SHRIRAM CO - OP. HSG. SOC. KHARADI, PUNE 411014 PAN : AABFL9816E / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI N. ASHOK BABU / DATE OF HEARING : 25 - 07 - 2019 / DATE OF PRONOUNCEMENT : 27 - 0 8 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH ESE THREE APPEALS BY THE REVENUE FOR THE ASSESSMENT YEARS 2012 - 13, 2013 - 14 AND 2014 - 15 ARE DIRECTED AGAINST THE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 5, PUNE FOR THE RESPECTIVE ASSESSMENT YEARS. THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2012 - 13 IS DATED 17 - 09 - 2018. THE IMPUGNED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEAR 2013 - 14 IS DATED 30 - 06 - 2017 AND THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEAR 2014 - 15 IS DATED 18 - 09 - 2017. 3 ITA NO S.76/PUN/2019, 2614/PUN/2017 & 07/PUN/2018 SINCE, THE ISSUE RAISED IN ALL THESE APPEALS IS IDENTICAL AND IS EMANATING FROM SAME SET OF FACTS, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE B EING DISPOSED OF VIDE THIS COMMON ORDER. 2. THE REVENUE IN ALL THE THREE APPEALS HAS ASSAILED THE ACTION OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S. 80IA(4) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). SINCE, THE ORDER OF FIRST APPELLATE AUTHORITY FOR ASSESSMENT YEAR 2013 - 14 IS FIRST IN TIME, THE FACTS ARE CU LLED OUT FROM THE APPEAL FOR ASSESSMENT YEAR 2013 - 14. ITA NO. 2614/PUN/2017 (A.Y. 2013 - 14) 3. THE ASSESSEE HAS SET UP FOUR WINDMILLS AT DIFFERENT LOCATIONS VIZ. JAISALMER ( RAJASTHAN ) , DHULIA, NANDURBAR AND SINNAR. THE ASSESSEE CLAIMED DEDUCTION U/S. 80IA(4) OF THE ACT IN RESPECT OF INCOME DERIVED FROM THE FOUR WINDMILLS SEPARATELY. THE ASSESSING OFFICER REJECTED ASSESSEES C LAIM BY TREATING ALL THE FOUR WINDMILLS AS SINGLE UNDERTAKING. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 29 - 02 - 2016 PASSED U/S. 143(3) OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE FIRST APPELLATE AUTHORI TY AFTER APPRECIATING THE FACTS OF THE CASE AND THE DECISION OF PUNE BENCH OF TRIBUNAL IN THE CASE OF MALPANI TEA CORPORATION VS. DY. COMMISSIONER OF INCOME TAX IN ITA NO. 912/PN/2011 FOR ASSESSMENT YEAR 2006 - 07 DECIDED ON 31 - 12 - 2012 ALLOWED ASSESSEES CLA IM OF DEDUCTION U/S. 80IA(4) OF THE ACT IN FULL. 4 ITA NO S.76/PUN/2019, 2614/PUN/2017 & 07/PUN/2018 AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL. 4. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ASSESSING OFFICER HAS ER RED IN HOLDING THAT ALL THE FOUR WINDMILLS SET UP BY THE ASSESSEE AT FOUR DIFFERENT LOCATIONS ARE SINGLE UNDERTAKING. THE TRIBUNAL IN THE CASE OF DY. COMMISSIONER OF INCOME TAX VS. J - SONS FOUNDRY PVT. LTD. IN ITA NO. 2349/PN/2012 FOR ASSESSMENT YEAR 2009 - 10 DECIDED ON 28 - 01 - 2014 HAS HELD THAT EVERY UNIT CONSTITUTE SEPARATE UNDERTAKING ENGAGED IN ELIGIBLE BUSINESS. SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL IN THE CASE OF D.J. MALPANI VS. ACIT IN ITA NOS. 1148 TO 1154/PN/2013 FOR ASSESSMENT YEARS 2004 - 05 TO 20 10 - 11 DECIDED ON 30 - 10 - 2015. THE TRIBUNAL HELD THAT EACH WINDMILL HAS TO BE CONSIDERED AS SEPARATE UNDERTAKING ELIGIBLE FOR DEDUCTION U/S. 80IA AND THE DEDUCTION SHOULD BE COMPUTED INDEPENDENTLY FOR EACH UNIT AND NOT ON CONSOLIDATED BASIS. THE COMMISSION ER OF INCOME TAX (APPEALS) HAS GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE DECISION OF TRIBUNAL AND THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED AS 340 ITR 477. 5. ON THE OTHER HAND SHRI N. ASHOK BABU REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT THE DEPARTMENT HAS FILED APPEAL AGAINST THE ORDER OF TRIBUNAL IN THE CASE OF D.J. MALPANI VS. ACIT (SUPRA). 6. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE HAS 5 ITA NO S.76/PUN/2019, 2614/PUN/2017 & 07/PUN/2018 SET UP FOUR WINDMILLS AND CLAIMED DEDUCTION U/S. 80IA(4) IN RESPECT OF EACH OF THE WINDMILLS AS PER THE TABLE GIVEN BELOW : SR. NO. LOCATION OF WINDMILLS DATE OF COMMENCEMENT OF OPERATION INCOME FROM OPERATION CLAIM ED AS DEDUCTION U/S. 80IA(4) INITIAL ASSESSMENT YEAR FROM WHEN DEDUCTION IS BEING CLAIMED 1 J AISALMER, RAJASTHAN 31.03.2004 11,39,020/ - 2011 - 12 2 DHULIA 20.09.2005 64,10,668/ - 2011 - 12 3 NANDURBAR 06.03.2006 61,53,036/ - 2011 - 12 4 SINNAR 30.03.2009 57,03,873/ - 2013 - 14 TOTAL 1,94,06,597/ - 7. THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IA(4) SEPARATELY FOR EACH UNIT OF WINDMILL . IT IS AN UNDISPUTED FACT THAT THE DATE OF COMMENCEMENT OF OPERATION OF EACH WINDMILL IS DIFFERENT. THE STAND OF THE REVENUE IS THAT INSTEAD OF CLAIMING DEDUCTION U/S. 80IA(4) ON EACH WINDMILL AS SEPARATE UNIT , THE ASSESSEE SHOULD HAVE COMPUTED DEDUCTIO N ON ALL THE WINDMILL S AS SINGLE UNDERTAKING. WE FIND THAT THE ISSUE WHETHER DEDUCTION U/S. 80IA(4) IS TO BE COMPUTED ON EACH WINDMILL UNIT SEPARATELY OR ON CONSOLIDATED BASIS WAS CONSIDERED BY THE CO - ORDINATE BENCH IN THE CASE OF M/S. D.J. MALPANI VS. ACIT (SUPRA). THE TRIBUNAL AFTER CONSIDERING THE EARLIER DECISION RENDERED IN THE CASE OF DY. COMMISSIONER OF INCOME TAX VS. J - SONS FOUNDRY PVT. LTD. (SUPRA) CONCLUDED AS UNDER : 58. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIB UNAL CITED (SUPRA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE HOLD THAT EACH PHASE OF WINDMILL HAS TO BE CONSIDERED AS SEPARATE UNDERTAKING ELIGIBLE FOR DEDUCTION U/S.80IA AND THEREFORE DEDUCTION U/S.80IA(4) SHOULD HAVE BEEN COMPUTED INDEPENDENTLY FOR EACH PHASE AND NOT ON CONSOLIDATED BASIS . THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE IS ACCORDINGLY ALLOWED. 6 ITA NO S.76/PUN/2019, 2614/PUN/2017 & 07/PUN/2018 8. SINCE, THE ISSUE HAS ALREADY BEEN CONSIDERED BY THE TRIBUNAL AND HAS HELD THAT EACH UNIT OF WINDMILL HAS TO BE CONSIDER ED SEPARATELY FOR COMPUTING DEDUCTION U/S. 80IA(4), WE SEE NO REASON TO DEVIATE FROM THE VIEW ALREADY TAKEN. NO CONTRARY JUDGMENT HAS BEEN PLACED ON RECORD BEFORE US BY THE REVENUE. THE LD. DR HAS POINTED THAT THE DEPARTMENT HAS FILED APPEAL AGAINST THE TRIBUNALS DECISION IN THE CASE OF M/S. D.J. MALPANI VS. ACIT (SUPRA), HOWEVER, NO ORDER BY THE HONBLE HIGH COURT EITHER STAYING OR REVERSING THE AFORESAID DECISION OF TRIBUNAL HAS BEEN FURNISHED BY THE LD. DR. 9. WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S. 80IA(4) CONSIDERING EACH WINDMILL AS SEPARATE UNIT FOR ALLOWING DEDUCTION U/S. 80IA(4) OF THE ACT. HENCE, THE IMPUGNED ORDER IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED. ITA NOS. 76/PUN/20019 FOR A.Y. 2012 - 13 AND ITA NO. 07/PUN/2018 FOR A.Y. 2014 - 15) 10. BOTH THE SIDES ARE UNANIMOUS IN STATING THAT THE FACTS IN ASSESSMENT YEARS 2012 - 13 AND 2014 - 15 ARE IDENTICAL TO THE FACTS IN ASSESSMENT YEAR 2013 - 14. THE DISALLOWANCE OF DEDUCTION U/S. 80IA(4) IN RESPECT OF WINDMILLS HAS BEEN MADE BY THE ASSESSING OFFICER ON SIMILAR LINES AND THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION BY FOLLOWING THE DECISION OF TRIBUNAL IN THE CASE OF M/S. D.J. MALPANI VS. ACIT (SUPRA) IN BOTH THE IMPUGNED ASSESSMENT YEARS . SINCE, THE ISSUE IN BOTH THE APPEALS ARE IDENTICAL TO THE ONE ALREADY ADJUDICATED BY US IN APPEAL OF REVENUE FOR ASSESSMENT YEAR 2013 - 14, THE FINDINGS GIVEN 7 ITA NO S.76/PUN/2019, 2614/PUN/2017 & 07/PUN/2018 BY US WHILE ADJUDICATING THE APPEAL FOR ASSESSMENT YEAR 2013 - 14 WOULD MUTATIS MUTANDIS APPLY TO THE APPEAL S FOR ASSESSMENT YEARS 2012 - 13 AND 2014 - 15 . B OTH THE APPEALS OF REVENUE ARE DISMISSED , ACCORDINGLY. 11. IN THE RESULT, ALL THE THREE APPEALS BY TH E REVENUE ARE DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 27 TH DAY OF AUGUST, 2019. SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 27 TH AUGUST, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5 , PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 4 , PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE