ACIT, Tuticorin V. M/s. R.S.Windtech Engineers Pvt.Ltd., Nagercoil

ITA 921/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61340 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2012
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2012
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: N DEVANATHAN
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO.921 /MDS/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, TUTICORIN. V. M/S. R.S. WINDTECH ENGINEERS PVT. LTD., 8/126-E3, MAIN ROAD, ARALVOIMOZHI, NAGERCOIL-629 301. (PAN: AAACR7743Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RAI, CIT-DR RESPONDENT BY : SHRI N. DEVANATHAN, ADVOCATE DATE OF HEARING : 11. 07.2012 DATE OF PRONOUNCEMENT : 11.07.20 12 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 09-01-2012 PASSED BY THE CIT(APPEALS)-I, MADU RAI FOR THE ASSESSMENT YEAR 2008-09. ITA NO.921/MDS/2012 2 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY ENGAGED IN THE BUSINESS OR ERECTION AND MAINTENANCE OF WINDMILL AND GENERATION AND DISTRIBU TION OF ELECTRICITY. THE ASSESSEE FILED A RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BY DECLARING A TOTAL INCOME OF ` 36,39,090/-. INITIALLY IT WAS PROCESSED U/S. 143(1) . SUBSEQUENTLY IT WAS SELECTED FOR SCRUTINY. AFTER DU E PROCESS THE AO HAS DISALLOWED AN AMOUNT OF ` 25,86,135/- CLAIMED AS A DEDUCTION UNDER SECTION 80-IA OF THE INCOME TAX A CT, 1961 (THE ACT FOR SHORT). THE AO HAS HELD THAT THE WOR KING OF THE ASSESSEE FOR CLAIMING THE DEDUCTION U/S 80-IA WAS N OT IN ORDER. AFTER RE-COMPUTING THE AO ARRIVED AT LOSS A ND DISALLOWED THE ASSESSEES CLAIM OF SEC. 80-IA OF TH E ACT. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE LEARNED CIT(A). IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE HAD FULFILLED ALL THE CONDITIONS TO CLAIM THE DEDUCTION UNDER SECTION 80-IA OF THE A CT. BEFORE THE LEARNED CIT(A) THE LEARNED COUNSEL FOR THE ASSE SSEE RELIED ON THE DECISION IN THE CASES OF WEST COAST PAPER MI LLS LTD. V. CIT (2006) 103 ITD 19 AND CIT V. EMERALD JEWEL IND USTRY (P) ITA NO.921/MDS/2012 3 LTD. (TAX CASE APPEAL NO. 715 OF 2010) AND ALSO THE DECISION IN THE CASE OF M/S. SRI VELAYUDHASAMY SPINNING MILL S (P) LTD. (2010) 231 CTR (MAD) 368. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CALLED FOR THE INCOME TAX RECORDS AND GAVE A CATEGORICAL FINDING T HAT THE ASSESSEE OWNED A WINDMILL FROM FINANCIAL YEAR 2004- 05 ONWARDS AND THAT THE ASSESSEE HAD SATISFIED ALL TH E CONDITIONS TO CLAIM THE DEDUCTION U/S 80-I OF THE ACT. HE OBS ERVED THAT THE AO WORKED OUT ALL THE INCOME OF WINDMILL AS IF OPERATION AND MAINTENANCE OF THE WINDMILL WAS THE ONLY SOURCE OF INCOME. THE PROFIT OF THE INCOME OF THE WINDMILL W AS COMPUTED AFTER PROVIDING DEPRECIATION. THE ASSESSE E HAD ABSORBED DEPRECIATION OF WINDMILL WITH THE OTHER IN COME IN EARLIER YEARS. THE LEARNED CIT(A) CONSIDERED THE D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F EMERALD JEWEL INDUSTRY (P) LTD. (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THE ASSESSEE COMPANY IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA IN RESPECT OF WINDMILL INSTALLE D BY IT AND THE UNABSORBED DEPRECIATION SET OFF IN EARLIER YEAR S COULD NOT BE REDUCED FROM PROFITS FOR COMPUTING DEDUCTION U/S 80-IA. HE FURTHER, BY FOLLOWING THE DECISION IN THE CASE O F M/S. SRI ITA NO.921/MDS/2012 4 VELAYUDHASAMY SPINNING MILLS (P) LTD. (SUPRA), ALLO WED THE CLAIM OF THE ASSESSEE U/S 80-IA. 4. ON BEING AGGRIEVED, THE REVENUE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AT THE TIME OF HEARING, BOTH THE PARTIES AGREED THAT THE ISSUE INVOLVED IN THIS APPEAL IS CLEARLY COVERED IN FAVOUR OF THE ASS ESSEE BY THE TWO DECISIONS OF THE HONBLE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT V. EMERALD JEWEL INDUSTRY (P) LTD. (SUP RA) AND M/S. SRI VELAYUDHASAMY SPINNING MILLS (P) LTD. (SUP RA). WE FIND THAT SPECIFIC FINDING HAS BEEN GIVEN BY THE LE ARNED CIT(A) THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS TO CLAIM THE DEDUCTION U/S 80-IA OF THE ACT AND THE ASSESSEE HAS ABSORBED DEPRECIATION OF WINDMILL WITH THE OTHER INCOME OF T HE ASSESSEE IN EARLIER YEARS. HE HAS ALSO, BY FOLLOWING THE DEC ISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT, ALLOWED THE CLAI M OF THE ASSESSEE U/S 80-IA. WE FIND NO INFIRMITY IN THE OR DER PASSED BY THE LEARNED CIT(A). WE THEREFORE CONFIRM HIS OR DER AND DISMISS THE REVENUES APPEAL. ITA NO.921/MDS/2012 5 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 11 TH OF JULY, 2012, AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) ( V.DURGA RAO ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 11 TH JULY, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE