The ACIT, Circle-1(1)(2), Surat V. M/s. Jay Bharat Dyeing & Printing Mills Pvt.Ltd., Surat

ITA 800/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8675 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Revised return; Unabsorbed depreciation
• Section: 80IA

Judgement Text

JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 1 OF 12 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./I.T.A. NO.2730/AHD/2014 [ [ /ASSESSMENT YEAR : 2010-11 . . ./I.T.A. NO.800/AHD/2016 [ [ /ASSESSMENT YEAR : 2008-09 [ /ASSESSEE BY SHRI RASESH SHAH CA /REVENUE BY SHRI O.P.SINGH, CIT - DR & SHRI J.K.CHANDNANI SR.DR / DATE OF HEARING : 1 2 .0 7 .2019 /PRONOUNCEMENT ON : 12 .07 .2019 /O R D E R PER O.P.MEENA, AM: 1. THE ABOVE TWO CAPTIONED APPEALS IN WHICH APPEAL FOR THE ASSESSMENT YEAR 2008-09 IS BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD.CIT(A)-1, SURAT DATED 27.01.2016 AND ANOTHER APPEAL BY THE JAY BHARAT DYE. & PTD. MILLS PVT. LTD., P-216, KADODARA CHAR RASTA, TAL. PALSANA, DIST. SURAT. [PAN: AAACJ 7428 C] VS. THE INCOME TAX OFFICER, WARD-1(3), SURAT. /APPELLANT /RESPONDENT ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(2), SURAT 395001. VS. JAY BHARAT DYE. & PTD. MILLS PVT. LTD., P-216, KADODARA CHAR RASTA, TAL. PALSANA, DIST. SURAT. [PAN: AAACJ 7428 C] /APPELLANT /RESPONDENT JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 2 OF 12 ASSESSEE FOR THE ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST THE ORDER OF LD.CIT(A)-1, SURAT DATED 02.08.2014. 2. SINCE THE ISSUE IN BOTH THE APPEALS ARE IDENTICAL, HENCE, THESE WERE HEARD TOGETHER AND THE ORDER IS BEING PASSED BY CONSIDERING THE A.Y. 2008-09 AS LEAD CASE OF WHICH FINDINGS WOULD APPLY TO THE A.Y.2010-11 ALSO. ITA NO.800/AHD/2016 FOR A.Y. 2008-09 (BY REVENUE): 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO.800/AHD/2016 READ AS UNDER : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD.CIT(A) WAS JUSTIFIED IN CONSIDERING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80IA(4) OF THE ACT DESPITE THE FACT THAT ASSESSEE HAD NOT MADE ANY SUCH CLAIM IN RETURN OF INCOME OR THROUGH REVISED RETURN OF INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD.CIT(A) WAS JUSTIFIED IN ALLOWING THE DEDUCTION U/S.. 80IA(4) OF THE ACT DESPITE THE FACT THAT THE ISSUE OF POWER GENERATION WAS NOT ALL EXAMINED BY CIT(A) FOR THE YEAR UNDER CONSIDERATION. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE RATIO OF DECISION OF SPECIAL BENCH OF THE HON'BLE ITAT IN THE CASE OF M/S.GOLDMINE SHARE & FINANCE PVT LTD WILL NOT APPLY TO THE CASE OF ASSESSEE AND THUS THE UNABSORBED DEPRECIATION & BUSINESS LOSS OF THE ELIGIBLE UNIT PERTAINING TO THE PERIOD PRIOR TO INITIAL ASSESSMENT YEAR NEED NOT TO BE CARRIED FORWARD ON NOTIONAL BASIS TO SUBSEQUENT YEARS FOR SET OFF AGAINST PROFIT OF ELIGIBLE UNIT. 4. FACTS EMANATING FROM THE ORDERS OF THE LOWER AUTHORITIES ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 29.09.2008 SHOWING TOTAL INCOME OF RS.2,54,51,540/-. IN THE SAID RETURN, THE ASSESSEE DID NOT JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 3 OF 12 CLAIM THE DEDUCTION U/S.80IA(4)(IV). HOWEVER, IN THE COMPUTATION OF TOTAL INCOME A NOTE WAS MENTIONED THAT THE COMPANY IS ELIGIBLE FOR DEDUCTION U/S.80IA(4)(IV) OF THE ACT IN RESPECT OF PROFITS FROM UNIT OF POWER DIVISION AND RESERVES ITS RIGHT TO THE CLAIM OF THE SAME. THE ASSESSING OFFICER HAS PASSED AN ASSESSMENT ORDER U/S.143(3) ON 28.10.2010 IN WHICH THE CLAIM OF THE ASSESSEE WAS CONSIDERED BUT IT WAS NOT ACCEPTED AS IT WAS NOT MADE BY FILING THE REVISED RETURN WITHIN TIME LIMIT FOR MAKING THE NEW CLAIM. 5. THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE LD.CIT(A), BUT HE HAS DISMISSED THE APPEAL AND REJECTED THE CLAIM FOR DEDUCTION U/S.80IA(4)(IV) OF RS.92,78,803/- IN RESPECT OF PROFIT AND GAINS FROM POWER GENERATION. THE ASSESSEE HAS FILED AN APPEAL BEFORE ITAT. THE ITAT VIDE ITS ORDER DATED 23.01.2015 IN ITA NO.1372/AHD/2011 HAS DIRECTED THE LD.CIT(A) TO VERIFY FACT WHETHER THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GENERATION OF POWER, AND PASS FRESH ORDER. 6. IN COMPLIANCE THEREOF, IN THE SECOND ROUND THE LD.CIT(A) HAS PASSED THE DETAILED ORDER AND EXAMINED THE FACT THAT THE ASSESSEE WAS ENGAGED IN THE GENERATION OF POWER AND ACCORDINGLY THE LD.CIT(A) ALLOWED THE ASSESSEES CLAIM OF DEDUCTION U/.80IA(4)(IV) OF THE ACT. JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 4 OF 12 WHILE ADJUDICATING THE APPEAL IN FAVOUR OF THE ASSESSEE COMPANY, THE LD.CIT(A) HAS RELIED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF M/S.GOETZE INDIA LTD. VS. CIT 284 ITR 323 SC WHEREIN IT WAS HELD THAT ANY DEDUCTION IS CLAIMED AFTER THE RETURN OF INCOME IS FILED, THE ASSESSING OFFICER HAS NO POWER TO ENTERTAIN SUCH CLAIM MADE, OTHERWISE REVISED RETURN, BUT THE APPELLATE AUTHORITY CAN ADMIT SUCH CLAIM. AFTER QUOTING THE VARIOUS CASE LAWS, THE LD.CIT(A) HAS CONSIDERED THE CLAIM IN THE LIGHT OF DECISION OF TRIBUNAL AND RELYING ON THE DECISION OF VARIOUS DECISIONS OF TRIBUNAL AS PER THE STATEMENT OF FACTS OF THE ASSESSING OFFICER THE LD.CIT(A) HAS GIVEN THE FOLLOWING THREE FINDINGS AS UNDER: I. THE LD.CIT(A) HAS FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IA(4)(IV) OF THE ACT. II. THE RATIO OF DECISION OF HON'BLE APEX COURT IN THE CASE OF M/S.GOETZE INDIA LTD (SUPRA) DOES NOT RESTRICT AN APPELLATE AUTHORITY IN ENTERTAINING A FRESH CLAIM OF THE ASSESSEE DURING APPELLATE STAGE. III. THE RATIO OF DECISION OF SPECIAL BENCH OF THE HON'BLE ITAT, AHMEDABAD IN THE CASE OF M/S.GOLDMINE SHARE & FINANCE PVT. LTD REPORTED IN (2008) 116 TTJ (AHD)(SC) IS NO MORE A GOOD LAW IN THE LIGHT OF SUBSEQUENT DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF M/S.VELAYUDHANSWAMY SPINNING MILLS PVT LTD. VS. ACIT REPORTED IN [2010] 38 DTR 57 (MAD) & THE HON'BLE ITAT, JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 5 OF 12 AHMEDABAD IN THE CASE OF M/S. JIVRAJ TEA LTD IN ITA NO.3013/AHD/2010 DATED 19.12.2013. 7. THE LD.CIT(A) HAS CONSIDERED THE FOLLOWING FACTS AS MENTIONED IN PARA NO.6.3 OF THE APPELLATE ORDER WHILE DECIDING THE ISSUE THAT THE ASSESSEE WAS IN THE BUSINESS OF POWER GENERATION WHICH IS COVERED U/S.80IA(4)(IV) OF THE ACT: I. ASSESSEE HAVE SET UP AN INDEPENDENT POWER UNIT FOR GENERATING POWER THROUGH WINDMILL IN DIST. BHAVNAGAR IN THE STATE OF GUJARAT IN ACCORDANCE WITH WIND POWER GENERATION POLICY 2002, OF GOVERNMENT OF GUJARAT. APPELLANTS POWER UNIT COMMENCED ITS OPERATIONS FROM F.Y. 2003-04. THE ASSESSEE COMPANYS POWER UNIT HAS SET UP ONE 1.25MW SUZLON MAKE WIND MILL IN WIND FARM AT BHADI, TALUKA AND DIST. BHAVNAGAR BASED ON THE WIND POWER GENERATION POLICY 2002, OF GOVERNMENT OF GUJARAT. II. THE ASSESSING OFFICER HAS PASSED ASSESSMENT ORDERS U/S.143(3) OF THE ACT FOR A.Y. 2009-10, 2010-11, 2011-12 & 2012-13 WHERE THE CLAIM OF DEDUCTION U/S.80IA(4)(IV) WAS EXAMINED BY ASSESSING OFFICER IN ALL THESE YEARS AND RELYING ON THE DECISION OF SPECIAL BENCH IN GOLDMINE SHARE, THE SAID CLAIM WAS DISALLOWED IN A.Y. 2009-10 AND PARTLY ALLOWED IN A.Y. 2010-11. THE DEDUCTION U/S.80IA(4)(IV) HAS BEEN ALLOWED IN FULL AT ASSESSMENT STAGE IN A.Y. 2011-12 & 2012-13. AS SUCH, IN ALL THE SUBSEQUENT YEARS JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 6 OF 12 THERE IS NO DISPUTE AS TO THE BUSINESS OF POWER GENERATION CARRIED ON BY THE ASSESSEES POWER UNIT. 8. FURTHER, AT PARA NO.6.4, THE LD.CIT(A) HAS NOTED THE FOLLOWING: I. ON PERUSAL OF PARA NO.5 OF THE ASSESSMENT ORDER, IT IS SEEN THAT THE ASSESSEE VIDE LETTER DATED 18.05.2010 REQUESTED TO ALLOW DEDUCTION U/S.80IA(4)(IV) OF THE ACT OF RS.92,78,803/- BEING PROFIT DERIVED FROM POWER GENERATION UNDERTAKING. THIS IS AN ADMITTED FACT THAT ALTHOUGH DEDUCTION U/S.80IA(4)(IV) HAS NOT BEEN CLAIMED IN THE RETURN OF INCOME BUT BY PUTTING A NOTE BELOW THE COMPUTATION OF INCOME SAYING THAT THE COMPANY IS ELIGIBLE FOR DEDUCTION U/S.80IA(4)(IV) OF THE ACT IN RESPECT OF PROFITS FROM UNIT-POWER DIVISION AND RESERVES IT S RIGHT TO CLAIM THE SAME. II. THE ASSESSEE HAS ALSO OBTAINED AUDIT REPORT IN THE FORM NO.10CCB FROM AN ACCOUNTANT AS REQUIRED UNDER SUBSECTION 7 OF S. 80IA OF THE ACT. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE COMPANY OWNS WIND MILL OF 1.25 MV IN WIND MILL FARM AT BHADI, TALUKA, DIST. BHAVNAGAR AND GENERATING POWER AND UNITS GENERATED ARE USED AFTER WHEELING IT OWN PROCESSING DIVISION (CAPTIVE POWER CONSUMPTION). III. THE ASSESSEE FILED THE COPIES OF WHEELING AGREEMENT BETWEEN GEB AND ASSESSEE COMPANY. JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 7 OF 12 IV. THE ASSESSEE COMPANYS POWER GENERATION UNIT COMMENCED IT OPERATION FROM F.Y. 2003-04. DURING THE YEAR, THE SHARE OF ASSESSEE COMPANY IN POWER UNITS GENERATED BY WIND MILL IS EVIDENT FROM THE COPIES OF CERTIFICATED ISSUED BY GEDA. 9. FURTHER, AT PARA NO.6.15 HAS NOTED THE FOLLOWING : I AGREE WITH THE CONTENTION OF THE LD.AR OF THE APPELLANT THAT THE HON'BLE ITAT HAS RESTORED THE MATTER TO UNDERSIGNED FOR A LIMITED ISSUED I.E.WHETHER ASSESSEE IS ENGAGED IN THE BUSINESS OF GENERATION OF POWER AND IF IT IS FOUND THAT THE ASSESSEE IS ENGAGED IN THE GENERATION POWER, THE CLAIM OF DEDUCTION IS TO BE ALLOWED AS PER LAW. THUS, THE SCOPE OF PRESENT PROCEEDINGS IS A LIMITED ONE. HOWEVER, IT IS SEEN THAT ON ISSUE OF NOTIONAL PROFIT EARNED IN RESPECT OF CAPTIVE POWER, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE CASE LAWS REFERRED IN WRITTEN SUBMISSION DATED 21.12.2015. AS REGARDS TO RATES TO BE CHARGED ON TRANSFER OF POWER UNITS TO PROCESSING DIVISION OF THE ASSESSEE, THE AR OF THE ASSESSEE COULD SUCCESSFULLY DEMONSTRATED THAT RATES WERE AT MARKET RATE I.E. THE RATE CHARGED BY GEB FROM ASSESSEE FOR POWER UNITS PURCHASED BY THE ASSESSEE. HENCE, I AM SATISFIED WITH THE EXPLANATION OF THE AR OF THE ASSESSEE WHO COULD SATISFACTORILY ANSWERED THE QUERIES RAISED BY THE ERSTWHILE CIT(A), THOUGH THE SAME ARE NOT REQUIRED TO BE ANSWERED. HOWEVER, ON PROPRIETY OF THE MATTER, THE LD.AR DISCHARGED HIS ONUS. 10. BEING AGGRIEVED, THE REVENUE FILED APPEAL BEFORE THIS TRIBUNAL, THE LD.CIT-DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 11. PER CONTRA, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN GROUND NO.2 THE REVENUE HAS RAISED THE POINT THAT ISSUE OF THE POWER GENERATION WAS NOT AT ALL EXAMINED BY THE LD.CIT(A) FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THIS GRIEVANCE OF THE REVENUE IS NOT AT ALL TENABLE AS LD.CIT(A) HAS PASSED THE DETAILED SPEAKING ORDER ON THIS ISSUE EVEN THE ASSESSING OFFICER HAS ACCEPTED OF THIS FACT IN THE JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 8 OF 12 STATEMENT OF FACTS MENTIONED BY HIM. THEREFORE, THIS GROUND OF REVENUE IS REQUIRED TO BE REJECTED. 12. FURTHER, THE LD.CIT(A) HAS EXAMINED IN DETAILS THAT THE ASSESSEE HAS SETUP AN INDEPENDENT POWER UNIT FOR GENERATION POWER THROUGH WIND MILL IN DISTRICT BHAVNAGAR IN ACCORDANCE WITH POWER GENERATION POLICY - 2002, OF GOVERNMENT OF GUJARAT. THE ASSESSEE HAS CLAIMED THAT DEDUCTION U/S.80IA(4)(IV) BY PUTTING A NOTE BELOW TO THE COMPUTATION OF INCOME FOR WHICH AN AUDIT REPORT AND FORM NO.10CCB WAS ALSO OBTAINED. IT WAS FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. VS. ACIT 38 DTR 57 (MADRAS) OF WHICH SLP IS ALSO REJECTED BY HON'BLE SUPREME COURT IN SPECIAL LEAVE PETITION NO.33474/2012 ORDER DATED 05.09.2016. THE LD.COUNSEL FURTHER PLACED RELIANCE IN THE CASE OF CIT-10 VS. HERCULES HOISTS LTD., IN ITA NO.707 OF 2014 DATED 14.06.2017 AND ALSO SUPPORTED HIS ORDER BY CBDT CIRCULAR NO.1/2016 DATED 15.02.2016, THUS, IT WAS SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. 13. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE CONSIDERING ALL THE THREE GROUND ABOVE IN CONSOLIDATED MANNER AS SAME PERTAINS TO SINGLE ISSUE. GROUND NO.2 JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 9 OF 12 TAKEN BY THE REVENUE IS FACTUALLY INCORRECT, HENCE SAME IS THEREFORE TREATED AS DISMISSED. 14. GROUND NO.2 & 3 RELATES TO ALLOWING DEDUCTION U/S.80IA(4)(IV) OF THE ACT. WE FIND THAT THE LD.CIT(A) HAS EXAMINED THE ISSUE IN DETAIL IN VIDE PARA 6.3 OF HIS ORDER. HE HAS GIVEN CLEAR CUT FINDING THAT THE ASSESSEE HAS SETUP AN INDEPENDENT POWER UNIT FOR GENERATING POWER THROUGH WIND MILL IN DISTRICT BHAVNAGAR IN THE STATE OF GUJARAT. THIS POWER UNIT WAS COMMENCED ITS OPERATION FROM F.Y. 2003-04. IT WAS NOTICED THAT THE ASSESSEE COMPANY HAS SETUP 1.25 MW SUZLON MAKE WIND MILL IN WIND FARM AT BHADI TALUK, DISTRICT BHAVNAGAR. IT IS FURTHER NOTICED THAT THE ISSUE OF POWER GENERATION IN THE CASE OF ASSESSEE WAS EXAMINED UNDER SCRUTINY ASSESSMENT U/S.143(3) FOR A.Y. 2009-10, 2010-11, 2011-12 AND 2012-13, WHERE THE PART CLAIM OF DEDUCTION U/S.80IA(4)(IV) WAS EXAMINED BY THE AO IN ALL THESE YEARS AND RELYING ON THE DECISION OF THE SPECIAL BENCH IN GOLDMINE SHARES AND FINANCE PVT. LTD., [2008] 116 TTJ (AHD) (SB) 705 DISALLOWED THE CLAIM PARTLY. HOWEVER, THE DEDUCTION U/S.80IA(4)(IV) WAS ALLOWED IN FULL AT THE ASSESSMENT STAGE IN A.Y. 2011-12 AND 2012-13. AS SUCH IN ALL THE SPECIFIC YEARS, THERE IS NO DISPUTE AS TO THE BUSINESS OF POWER GENERATION CARRIED ON BY THE ASSESSEE. WE FIND THAT THE RATIO OF SPECIAL BENCH DECISION OF ITAT AHMEDABAD IN THE CASE OF M/S.GOLDMINE SHARES FINANCIAL PVT LD., (SUPRA) IS NOT MORE A GOOD LAW IN THE LIGHT OF JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 10 OF 12 SUBSEQUENT DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF M/S.VELAYUDHASWAMY SPINNING MILLS PVT LTD., (SUPRA) OF WHICH SLP IS ALSO DISMISSED AND ALSO IN THE CASE OF ITAT AHMEDABAD IN M/S.JIVRAJ TEA LTD. IN ITA NO.3013/AHD/2010 DATED 19.12.2013. FURTHER, THE APPELLATE AUTHORITY HAS POWER TO ENTERTAIN CLAIM OF DEDUCTION WHICH HAS NOT MADE IN THE ORIGINAL RETURN IN THE LIGHT OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD.(SUPRA). THEREFORE, THE LD.CIT(A) HAS RIGHTLY ENTERTAINED THE SAID CLAIM. WITH REGARD TO GROUND NO.3 OF THE REVENUE, WE FIND THAT LOSSES IN THE PRECEDING YEAR IN THE POWER UNIT WAS ABSORBED IN THE PROFIT OF OTHER UNIT ARE NOT REQUIRED TO BE NOTIONALLY SET OFF AGAINST THE PROFIT OF THE POWER UNIT IN CURRENT YEAR. THE LD.COUNSEL HAS RELIED IN THIS REGARD ON THE FINDINGS GIVEN BY THE LD.CIT(A) IN PARA 6.5 TO 6.12 WHICH HAS BEEN REPRODUCED IN ABOVE PARAS OF OUR ORDER. FURTHER, WE FIND THAT THE HON'BLE BOMBAY HIGH COURT IN CIT VS. HERCULES HOISTS LTD.,(SUPRA) HAS ACCEPTED THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS PVT LTD(SUPRA). FURTHER THE DECISION OF HON'BLE MADRAS HIGH COURT HAS BEEN CONFIRMED BY THE HON'BLE SUPREME COURT IN CIVIL APPEAL NO.33475/2012 DATED 05.09.2016. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE CBDT CIRCULAR NO.1/2016 DATED 15.02.2016., WHICH ALSO SUPPORTS THE CASE OF THE ASSESSEE. JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 11 OF 12 15. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A), ACCORDINGLY THE SAME IS UPHELD, CONSEQUENTLY ALL THE ABOVE THREE GROUNDS OF APPEAL ARE ACCORDINGLY DISMISSED. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED FOR THE ASSESSMENT YEAR 2008-09. ITA NO.2730/AHD/2014 FOR A.Y. 2010-11 (BY ASSESSEE): 17. THE GROUND OF APPEAL NO.1 TO 3 OF ASSESSEE APPEAL RELATES TO CONFIRMING THE ACTION OF THE ASSESSING OFFICER RESTRICTING THE DEDUCTION U/S.80IA(4)(IV) OF RS.88,76,873/- AS AGAINST THE CLAIM OF RS.1,24,39,050/- MADE IN RESPECT OF PROFIT AND GAINS FROM POWER GENERATION ACTIVITY OF THE ASSESSEE IN THE LIGHT OF SPECIAL BENCH DECISION. 18. WE HAVE HEARD THE RIVAL PARTIES AND FIND THAT THE ISSUE UNDER CONSIDERATION IS IDENTICAL AS FOR A.Y. 2008-09 IN ITA N.800/AHD/2016 WHEREIN THE LD.CIT(A) ELABORATELY DISCUSSED THE CLAIM OF THE ASSESSEE AND FIND THE SAID CLAIM IN ORDER IN THE LIGHT OF DECISION OF HON'BLE MADRAS HIGH COURT IN VELAYUDHASWAMY SPINNING MILLS PVT LTD., (SUPRA). BOTH PARTIES HAVE AGREED THAT THE FACTS ARE IDENTICAL AS FOR A.Y. 2008-09, THEREFORE FOLLOWING OUR REASONING AND FINDINGS FOR THE A.Y. 2008-09 AND ALSO RELYING ON FINDING GIVEN BY LD.CIT(A) FOR THE A.Y. 2008-09, WE ALLOW JAY BHARAT DYG. & PTG. MILLS PVT. LTD., / ITA NO.2730/AHD/2014 & 800/AHD/2016 FOR A.Y. 2010-11 & 2008-09 PAGE 12 OF 12 THE APPEAL OF THE ASSESSEE FOR THIS YEAR, ACCORDINGLY GROUND NO.1 TO 3 OF APPEAL OF THE ASSESSEE ARE ALLOWED. 19. GROUND NO.4 & 5 RELATING TO INTEREST U/S.234A/B/C & D OF THE ACT AND INITIATION OF PENALTY U/S.271(1)(C) ARE CONSEQUENTIAL IN NATURE. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR A.Y. 2010-11. 21. TO SUM UP, APPEAL OF REVENUE IN ITA NO.800/AHD/2016 IS DISMISSED AND APPEAL OF THE ASSESSEE IN ITA NO.2730/AHD/2014 IS ALLOWED. 22. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.07.2019 SD/- SD/- (V. DURGA RAO) (O.P.MEENA) ( /JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) / SURAT, DATED : 12 TH JULY , 2019/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT