Deputy Commissioner of Income-tax, V. Prima Paper Engineering Pvt. Ltd., Pune

ITA 291/PUN/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2670 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 20-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Depreciation; Opportunity of being heard; Revised return; Unabsorbed depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.534/PN/2014 #& & / ASSESSMENT YEAR : 2009-10 ACIT, CIRCLE-10, PUNE . / APPELLANT V/S PRIMA PAPER ENGINEERING PVT. LTD., T-73, MIDC, BHOSARI, PUNE 411026 PAN NO.AABCP1938J . / RESPONDENT . / ITA NO.291/PN/2015 #& & / ASSESSMENT YEAR : 2010-11 DCIT, CIRCLE-10, PUNE . / APPELLANT V/S PRIMA PAPER ENGINEERING PVT. LTD., T-73, MIDC, BHOSARI, PUNE 411026 PAN NO.AABCP1938J . / RESPONDENT / ASSESSEE BY : SHRI SHARAD SHAH / REVENUE BY : SHRI HITENDRA NINAWE / ORDER PER R.K. PANDA, AM : ITA NO.534/PN/2014 FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 19-12-2013 OF THE CIT(A)-V, PUN E RELATING TO ASSESSMENT YEAR 2009-10. ITA NO.291/PN/2015 FILED B Y THE / DATE OF HEARING :01.03.2016 / DATE OF PRONOUNCEMENT:02.03.2016 2 ITA NO.534/PN/2014 AND ITA NO.291/PN/2015 REVENUE IS DIRECTED AGAINST THE ORDER DATED 15-12-2014 OF THE CIT(A)-VI, PUNE RELATING TO ASSESSMENT YEAR 2010-11. S INCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN BOT H THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE B EING DISPOSED OF BY THIS COMMON ORDER. ITA NO.534/PN/2014 (A.Y. 2009-10) : 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT FOR THE PURPOSE OF SE CTION 80LA THE YEAR IN WHICH THE ASSESSEE CHOOSES TO CLAIM DEDUCTION HAS T O BE TREATED AS 'INITIAL ASSESSMENT YEAR'? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT PROFIT OF THE ELIGIBL E BUSINESS HAS TO BE COMPUTED WITHOUT DEDUCTING THEREFROM BROUGHT FORWAR D LOSSES OR UNABSORBED DEPRECIATION PRIOR TO THE INITIAL YEAR O F CLAIM DE HORS THE PROVISION U/S. 80IA(5) OF THE ACT? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) ERRED IN IGNORING THAT THE ASSESSEE WAS IN POWER GE NERATION BUSINESS AND HOLDING THAT EACH WINDMILL HAS TO BE TAKEN AS INDEP ENDENT 'ELIGIBLE BUSINESS'. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HOLDING THAT EACH WINDMILL UNIT HAS TO BE TREATED ON STANDALONE BASIS DE HORS THE SPECIFIC STIPULATION IN SECTION 80IA(5) OF THE ACT THAT 'PROFIT AND GAINS OF ELIGIBLE BUSINESS' BEING POWER GENERATION BUSINESS HAVE TO BE TAKEN? 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PLASTIC MOULDING PRODUC TS. IT HAS ALSO INSTALLED VARIOUS WIND POWER GENERATION PROJECTS. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 30-10-2009 DECLARING INCOME OF RS.2,49,93,790/- WHICH WAS REVISED ON 02-05-2011 DECLARING TOTAL INCOME OF RS.2,95,36,210/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT ASSESSEE COMPANY HAS C LAIMED DEDUCTION U/S.80IA AMOUNTING TO RS.96,88,863/- IN ITS ORIGINA L 3 ITA NO.534/PN/2014 AND ITA NO.291/PN/2015 RETURN OF INCOME. SUBSEQUENTLY, THE SAID DEDUCTION WAS R EDUCED TO RS.87,36,664/- IN THE REVISED RETURN. THE ASSESSEE OW NS 4 WINDMILLS AT SATARA, 5 WINDMILLS AT KANYAKUMARI, TAMILNADU AND 5 WINDMILLS AT TIRUNELVELI, TAMILNADU. THE AO NOTED THAT THE CLAIM OF DEDUCTION U/S.80IA WAS MADE BY THE ASSESSEE TRE ATING ALL THE 14 WINDMILLS AS ONE UNIT. THE AO ASKED THE ASSESSEE TO FILE YEAR-WISE WORKING OF PROFITS IN RESPECT OF EACH UNIT SEPARA TELY U/S.80IA(5). AFTER VERIFICATION OF DETAILS SUBMITTED BY THE ASS ESSEE COMPANY THE AO NOTED THAT THE COMPUTATION OF DEDUCTION U/S.80IA IS WITHOUT SETTING OFF THE DEPRECIATION ON WINDMILL AS THE SAME HAS ALREADY BEEN ADJUSTED IN EARLIER ASSESSMENT YE ARS 2006- 07 AND 2007-08 AGAINST THE OTHER INCOME. THE ASSESSEE STARTED CLAIMING DEDUCTION FOR A.Y. 2008-09. THEREFORE, WHEN THE ASSESSEE FURNISHED THE YEAR-WISE WORKING OF PROFITS IN RESP ECT OF EACH UNIT SEPARATELY AS PER SECTION 80IA(5) THERE WAS N O PROFITS IN ANY OF THE UNITS. ACCORDINGLY, THE AO HELD THAT SINCE THE RE WAS NO PROFIT IN ANY OF THE UNITS, DEDUCTION U/S.80IA OF THE ACT WAS NOT ADMISSIBLE. IN APPEAL THE LD.CIT(A) FOLLOWING THE ORDER OF HIS PREDECESSOR FOR A.Y. 2008-09 DIRECTED THE AO TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/S.80IA OF THE ACT. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASS ESSEES OWN CASE FOR A.YRS. 2007-08 AND 2008-09. THE TRIBUNAL VIDE ITA NOS.120 AND 121/PN/2013 ORDER DATED 31-03-2015 HAS R ESTORED THE ISSUE TO THE FILE OF THE CIT(A) FOR DECIDING THE ISSUE A FRESH. HE 4 ITA NO.534/PN/2014 AND ITA NO.291/PN/2015 ACCORDINGLY SUBMITTED THAT HE HAS NO OBJECTION IF THE MA TTER IS RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO FAIRLY CONCEDED THAT TH E MATTER HAS BEEN SET ASIDE TO THE FILE OF THE CIT(A) BY THE TRIBUN AL IN THE PRECEDING 2 ASSESSMENT YEARS. 6. AFTER HEARING BOTH THE SIDES, WE FIND THE CIT(A) FOLLOWING T HE ORDER OF HIS PREDECESSOR FOR A.Y. 2008-09 HAS ALLOWED THE CLAIM OF THE ASSESSEE. WE FIND WHEN THE REVENUE CHALLENGED THE ORDER OF THE CIT(A) THE TRIBUNAL VIDE ITA NOS. 120 AND 121/PN/2013 ORD ER DATED 31-03-2015 FOR A.YRS. 2007-08 AND 2008-09 RESTOR ED THE ISSUE TO THE FILE OF THE CIT(A) BY OBSERVING AS UNDER : 5. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSING OFFICER WHILE DISALLOWING THE CLAIM OF DEDUCTION U/S.80IA HAS FOLLOWED THE ORDER OF HIS PREDECESSOR FOR A.Y. 2006-07 WHICH HAS BEE N UPHELD BY THE LD.CIT(A). WE FIND ON AN APPEAL FILED BY THE A SSESSEE FOR A.YRS. 2005-06 AND 2006-07 THE TRIBUNAL VIDE ITA NOS. 1239 AND 1240/PN/2009 ORDER DATED 24-08-2011 HAS RESTORED THE ISSUE TO THE FILE OF THE LD.CIT(A) BY OBSERVING AS UNDER: 5. IN THE BACKGROUND OF THE AFORESAID PLEA SET UP BY THE ASSESSEE, WE HAVE PERUSED THE IMPUGNED ORDER AND FIND THAT THE A SSESSEE HAD SPECIFICALLY RAISED THE ISSUE THAT EACH OF THE WIND MILL INSTALLED WAS LIABLE TO BE CONSIDERED AS A SEPARATE UNIT. IN THE ABSENCE OF ANY DETERMINATION ON THIS ASPECT, WE DEEM IT FIT AND PR OPER TO SET ASIDE THE ORDER OF THE CIT(A) TO DECIDE THE ISSUE RELATIN G TO THE CLAIM OF THE ASSESSEE U/S 80IA AFRESH IN ACCORDANCE WITH LAW AND KEEPING IN MIND THE PRECEDENT IN THE ASSESSEE'S OWN CASE. NEEDLESS T O MENTION THAT THE CIT(A) SHALL ADJUDICATE THE ISSUE AFRESH AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THIS MANNER, THE GROUND NOS. 1, 3 AND 4 RAISE BY THE ASSESSEE IN THE RESPECTIVE APPEALS ARE DISPOSED OF. ALTHOUGH THE ORDER OF HIS PREDECESSORS AS WELL AS THE ORD ER OF THE TRIBUNAL IN ASSESSEES OWN CASE WAS AVAILABLE BEFORE HIM, THE LD.CIT(A) HAS NOT AT ALL CONSIDERED THE SAME. UNDER T HESE CIRCUMSTANCES AND FOLLOWING THE DECISION OF THE TRIBUN AL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING TWO ASSE SSMENT YEARS, WE RESTORE THE ISSUE TO THE FILE OF THE LD.CIT(A ) WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT MAY BE PERTINENT TO NOTE HERE THAT ALTHOUGH THE ORDER OF THE TRIBUNAL F OR A.YRS. 2005-06 AND 2006-07 WAS SET ASIDE TO THE FILE OF THE CIT(A) IN THE MONTH OF AUGUST 2011, IT WAS BROUGHT TO OUR NOTICE THAT NO ORD ER HAS BEEN PASSED BY THE CIT(A) TILL DATE. WE, THEREFORE, DIREC T THE LD.CIT(A) TO 5 ITA NO.534/PN/2014 AND ITA NO.291/PN/2015 DISPOSE OF THE APPEALS WITHIN A PERIOD OF SIX MONTHS FRO M THE DATE OF RECEIPT OF THIS ORDER IN HIS OFFICE. THE ASSESSEE IS ALSO DIRECTED TO FILE A COPY OF THIS ORDER BEFORE THE LD.CIT(A) AND BRING TO HIS NOTICE ABOUT NON-DISPOSAL OF THE APPEAL. WE HOLD AND DIRECT ACCORDINGLY. GROUNDS OF APPEAL NO. 1 TO 4 BY THE REVENUE ARE ACCO RDINGLY ALLOWED FOR STATISTICAL PURPOSES. 7. SINCE THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE ORDER FOR A.Y. 2008-09 AND SINC E THE ORDER FOR A.Y. 2008-09 HAS BEEN SET ASIDE TO THE FILE OF THE CIT(A) BY THE TRIBUNAL, THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNA L, WE RESTORE THE ISSUE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDIC ATION OF THE ISSUE. GROUNDS RAISED BY THE REVENUE ARE ACCORDING LY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.291/PN/2015 (A.Y. 2010-11) : 8. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT FOR THE PURPOSE OF SE CTION 80LA THE YEAR IN WHICH THE ASSESSEE CHOOSES TO CLAIM DEDUCTION HAS T O BE TREATED AS 'INITIAL ASSESSMENT YEAR'? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT PROFIT OF THE ELIGIBL E BUSINESS HAS TO BE COMPUTED WITHOUT DEDUCTING THEREFROM BROUGHT FORWAR D LOSSES OR UNABSORBED DEPRECIATION PRIOR TO THE INITIAL YEAR O F CLAIM DE HORS THE PROVISION U/S. 80IA(5) OF THE ACT? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) ERRED IN IGNORING THAT THE ASSESSEE WAS IN POWER GE NERATION BUSINESS AND HOLDING THAT EACH WINDMILL HAS TO BE TAKEN AS INDEP ENDENT 'ELIGIBLE BUSINESS'. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HOLDING THAT EACH WINDMILL UNIT HAS TO BE TREATED ON STANDALONE BASIS DE HORS THE SPECIFIC STIPULATION IN SECTION 80IA(5) OF THE ACT THAT 'PROFIT AND GAINS OF ELIGIBLE BUSINESS' BEING POWER GENERATION BUSINESS HAVE TO BE TAKEN? 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) WAS CORRECT TO TREAT THE JUDGEMENT OF NON-JURISDICT IONAL HIGH COURT AS THE BINDING PRECEDENT THAT MUST BE FOLLOWED IN DISREGAR D TO THE PRINCIPLE LAID DOWN ON THIS ISSUE BY THE DIVISION BENCH OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. THANE ELECTRICITY SUPP LY LTD. REPORTED IN 206 ITR 727? 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 6 ITA NO.534/PN/2014 AND ITA NO.291/PN/2015 9. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUNDS RAISE D BY THE REVENUE ARE IDENTICAL TO THE GROUNDS OF APPEAL IN ITA NO.534/PN/2014. WE HAVE ALREADY DECIDED THE ISSUE AND T HE MATTER HAS BEEN SET ASIDE TO THE FILE OF THE CIT(A) FOR FRE SH ADJUDICATION. FOLLOWING THE SAME REASONINGS THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION OF T HE ISSUE IN THE LIGHT OF THE DIRECTIONS GIVEN THEREIN. GROUNDS RAIS ED BY THE REVENUE AREA ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02-03-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 02 ND MARCH, 2016. ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) - 6 , PUNE 4. 5. 6. THE CIT-6, PUNE $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , $ ' //TRUE COPY// // TRUE COPY // // $ ' //TRUE C // /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE