NSL Renewable Power Private Limited, Hyderabad, Hyderabad V. DCIT, Circle-16(1), Hyderabad, Hyderabad

ITA 988/HYD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5931 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 12-01-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 08-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ALIASGHAR RAMPURWALA
• Keywords: Business income; Depreciation; Rectification of order; Revised return; Unabsorbed depreciation; Set aside
• Section: 143(3); 14A; 115JB; 80IB; 143(1); 80IA; 251; 80HH; 54; 154

Judgement Text

ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.988/HYD/2017 ASSESSMENT YEAR: 2012-13 NSL RENEWABLE POWER PRIVATE LIMITED, HYDERABAD PAN:AABCN6009L VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 16(1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI ALIASGHAR RAMPURWALA REVENUE BY : SRI RAJENDRA KUMAR, DR DATE OF HEARING: 16/09/2020 DATE OF PRONOUNCEMENT: 29/09/2020 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2012-13 AGAIN ST THE ORDER OF THE CIT (A)-4, HYDERABAD, DATED 24.03. 2017. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV ('LD. CIT(A)' ERRED IN UPHOLDING THE RECTIFICATION ORDER PASSED U/S. 154 OF THE INCOME TAX ACT, 1961 ('THE A CT') BY DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 16(1), HYDERABAD (LD. AO)') ON THE ALLEGED GROUND THAT NO DEBATABLE ISSUE WAS RECTIFIED U/S. 154. THE APPELLANT THEREFORE PRAYS THAT THE RECTIFICATIO N ORDER PASSED U/S. 154 OF THE ACT BY THE AO, BE HELD AS BA D IN LAW AND LIABLE TO BE QUASHED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF LD . AO IN RESTRICTING THE CLAIM OF DEDUCTION U/S. 80IA OF THE ACT ONLY TO THE EXTENT OF INCOME FROM BUSINESS AND PROFESSIO N ON THE ALLEGED GROUND THAT DEDUCTION U/S. 80IA SHALL B E ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 2 OF 10 ALLOWED TO THE EXTENT OF BUSINESS INCOME ONLY AND N OT FROM THE GROSS TOTAL INCOME. THE APPELLANT THEREFORE PRAYS THAT THE LD. AO BE DI RECTED TO ALLOW THE CLAIM OF DEDUCTION U/S. 80IA OF THE AC T AGAINST THE GROSS TOTAL INCOME. 3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE GROUND OF DISALLOWANCE U/S. 14A R.W.R. 8D OF THE ACT ON THE A LLEGED GROUND THAT DISALLOWANCE U/S 14A R.W.R. 8D WAS MADE IN THE ORDER PASSED U/S. 143(3) OF THE ACT AND SUCH OR DER WAS NOT THE SUBJECT MATTER OF APPEAL. THE APPELLANT THEREFORE PRAYS THAT THE ACTION OF TH E LD. CIT(A) BE QUASHED AND DISALLOWANCE U/S. 14A R.W.R. 8D OF THE ACT BE DELETED. 4 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE GROUND OF TAXABILITY OF DIVIDEND INCOME AS 'INCOME FROM OTHER SOURCES' ON THE ALLEGED GROUND THAT ~ THE DIVIDEND INCOME WAS MADE TAXABLE IN THE ORDER PASSED U/S. 143(3) OF THE ACT AND SUCH ORDER WAS NOT THE SUBJECT MATTER OF AP PEAL. THE APPELLANT THEREFORE PRAYS THAT THE ACTION OF TH E LD. CIT(A) BE QUASHED AND DIVIDEND INCOME BE HELD AS EX EMPT U/ S. 10(35) OF THE ACT. 5 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AA ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ACT. THE APPELLANT THEREFORE PRAYS THAT THE ACTION OF TH E LD. AO IN INITIATING PENALTY PROCEEDINGS BE QUASHED. THE ABOVE GROUNDS OF ANNEAL ARE WITHOUT PREJUDICE T O EACH OTHER. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER , AMEND, DELETE OR WITHDRAW ANY GROUND OF APPEAL EITHER BEFO RE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUNDS OF APPEAL NOS. 3, 4 AND 5 ARE NOT PRESSED BY THE ASSESSEE. THEY ARE ACCORDINGLY REJEC TED AS NOT PRESSED. ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 3 OF 10 3. BRIEF FACTS RELATING TO THE OTHER GROUNDS I.E. 1 AND 2 ARE AS UNDER: 4. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE A.Y 2012-13 ON 30.09.2012 ADMITTING NIL INCOME AF TER CLAIMING RS.21,67,91,677/- AS A DEDUCTION U/S 80IA OF THE AC T AND BOOK PROFITS OF RS.13,78,32,670/- U/S 115JB OF THE ACT. THE RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT AND SUBSE QUENT THERETO, THE ASSESSEE COMPANY FILED A REVISED RETURN OF INCO ME ON 05.10.2012 ADMITTING NIL INCOME AFTER CLAIMING RS.21,67,91,677/- AS A DEDUCTION U/S 80IA OF THE AC T. THEREAFTER, THE ASSESSEE FILED ANOTHER REVISED RETURN OF INCOME ON 21.11.2012 ADMITTING NIL INCOME AFTER CLAIMING RS.21,35,54,3 27/- AS A DEDUCTION U/S 80IA OF THE ACT. THEREFORE, THE CASE WAS SELECTED FOR SCRUTINY AND THE AO OBSERVED THAT THE ASSESSEE COMP ANY DERIVED CARBON CREDITS OF RS.10,61,04,375/- WHICH HAVE BEEN CREDITED TO THE P&L A/C OF THE POWER DIVISIONS AND HAS CLAIMED DEDUCTION U/S 80IA ON THE CARBON CREDITS AS WELL. HE WAS OF T HE OPINION THAT CARBON CREDIT IS NOT BUSINESS INCOME, BUT IT IS OTH ER INCOME. THEREFORE, THE AO RECOMPUTED THE DEDUCTION U/S 80IA AT RS.16,55,99,026/- AFTER REDUCING THE CARBON CREDITS . 5. SUBSEQUENT THERETO, THE AO ISSUED A NOTICE U/S 1 54 OF THE ACT ON THE GROUND THAT THE DEDUCTION U/S 80IA W AS ALLOWED TO THE ASSESSEE ON THE GROSS TOTAL INCOME INSTEAD OF R ESTRICTING THE SAME TO THE AVAILABLE BUSINESS PROFIT AND THEREFORE , THERE IS A MISTAKE APPARENT FROM RECORD WHICH NEEDS RECTIFICAT ION. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE SUBMITTED THAT THE DEDUCTION U/S 80IA IS AVAILABLE FROM THE GROSS TOTA L INCOME WHICH HAS BEEN CORRECTLY ALLOWED DURING THE ASSESSMENT PR OCEEDINGS. ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 4 OF 10 BUT THE AO WAS NOT CONVINCED AND HE RECOMPUTED THE INCOME BY RESTRICTING THE DEDUCTION U/S 80IA TO THE BUSINESS INCOME/LOSS ONLY. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL B EFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO U/S 154. AS R EGARDS THE ASSESSEES CHALLENGE TO THE APPLICABILITY OF SECTIO N 154 TO DEDUCTION U/S 80IA, THE CIT (A) HELD THAT THERE IS NO DEBATABLE ISSUE AND HENCE CAN BE RECTIFIED U/S 154 OF THE ACT . THUS, HE UPHELD THE INITIATION OF PROCEEDINGS U/S 154 AND AL SO FINAL ORDER U/S 154 OF THE ACT. AGGRIEVED, THE ASSESSEE IS IN S ECOND APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THIS ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE A SSESSEES OWN CASE FOR THE EARLIER A.Y WHEREIN THE TRIBUNAL HAS C ONSIDERED RELEVANT PROVISIONS OF THE ACT TO HOLD THAT DEDUCTI ON U/S 80IA IS ALLOWABLE FROM THE GROSS TOTAL INCOME OF THE ASSESS EE FOR THE RELEVANT A.Y. HE HAS ALSO DRAWN OUR ATTENTION TO SE CTION 80IA AND SUB-SECTION (1) AND (2) THEREOF TO DEMONSTRATE THAT DEDUCTION U/S 80IA SHALL BE ALLOWED FROM THE GROSS TOTAL INCOME O F THE ASSESSEE. 7. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD AND ALSO THE DECISION OF THE COORDINATE B ENCH OF THE TRIBUNAL AND THE PROVISIONS OF SECTION 80IA AND SUB -SECTION 1 AND 2 THEREOF, WE HOLD THAT DEDUCTION U/S 80IA IS TO BE ALLOWED FROM THE GROSS TOTAL INCOME AND SHOULD NOT BE RESTRICTED TO THE NET BUSINESS INCOME OF THE ASSESSEE. FOR THE SAKE OF RE ADY REFERENCE, THE RELEVANT PARAGRAPHS OF THE ORDER OF THE TRIBUNA L FROM THE EARLIER A.YS ARE REPRODUCED HEREUNDER: ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 5 OF 10 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80 IA OF THE ACT IN THE RETURN OF INCOME FILED ALONG WITH FORM 10CCB. THE A O HAS ACCEPTED AND ALLOWED THE CLAIM U/S 80IA. IT IS ONLY SUBSEQUE NT THERETO, THAT HE HAS ISSUED NOTICE U/S 154 ON THE GROUND THAT THERE IS A N EXCESS CLAIM OF DEDUCTION U/S 80IA. THE ARGUMENT OF THE ASSESSEE TH AT IT IS A DEBATABLE ISSUE AND THEREFORE, IT COULD NOT BE RECTIFIED U/S 154 OF THE ACT HAS TO BE EXAMINED FIRST. IT IS NOT MERE QUANTIFICATION BUT T HE METHOD OF QUANTIFICATION THAT HAS BEEN CONSIDERED U/S 154 OF THE ACT. IF THERE IS MISTAKE IN THE CALCULATION OF QUANTUM TO BE ALLOWED , IT IS A MISTAKE WHICH CAN BE RECTIFIED U/S 154 OF THE ACT. HOWEVER, IF TH E ISSUE SOUGHT TO BE RECTIFIED, IS THE METHOD OF CALCULATION, THEN WE AG REE WITH THE CONTENTION OF THE ASSESSEE THAT IT IS A DEBATABLE ISSUE AND CA NNOT BE RECTIFIED U/S 154 OF THE ACT. THE HON'BLE SUPREME COURT IN THE CASE O F CIT VS. HERO CYCLES (P) LTD (SUPRA) HAS CLEARLY HELD THAT 'RECTIFICATIO N UNDER SECTION 154 CAN ONLY BE MADE WHEN GLARING MISTAKE OF FACT OR LAW HA S BEEN COMMITTED BY THE OFFICER PASSING THE ORDER AND IT BECOMES APPARE NT FROM THE RECORD. RECTIFICATION IS NOT POSSIBLE IF THE QUESTION IS DE BATABLE. MOREOVER, THE POINT WHICH IS NOT EXAMINED ON FACT OR IN LAW CANNO T BE DEALT WITH AS MISTAKE APPARENT ON THE RECORD. THE DISPUTE IN THE INSTANT CASE RAISED A MIXED QUESTION OF FACT AND LAW. HENCE, THE TRIBUNAL WAS IN ERROR IN UPHOLDING THE ASSESSING OFFICER'S ORDER ALLOWING TH E ASSESSEE'S CLAIM FOR WEIGHTED DEDUCTION BY WAY OF RECTIFICATION ORDER UN DER SECTION 154'. 9. IN THE CASE OF T.S BALARAM, ITO VS. VOLKART BROT HERS (SUPRA), THE HON'BLE SUPREME COURT HAS HELD AS UNDER: 'SECTION 17(1) OF 1922 ACT CAN APPLY TO A 'PERSON'. THE EXPRESSION 'PERSON' IS DEFINED IN SECTION 2(9) OF 1922 ACT TO INCLUDE A HUF AND A LOCAL AUTHORITY. UNLESS A FIRM CAN BE CONSIDERED AS A 'PERSON', SECTION 17(1) OF THE 1922 ACT CANNOT GOVERN THE ASSESSMENT OF THE ASSESSEE-FIRM. IN THE 1961 ACT THE EXPRESSION 'PERSON' IS DEFINED DIFFERENTLY. IT IS A MATTER FOR CONSIDERATION WHETHER THE DEFINITION CON TAINED IN SECTION 2(31) OF THE 1961 ACT IS AN AMENDMENT OF THE LAW OR IS MERELY DECLARATORY OF THE LAW THAT WAS IN FORCE EARLIER. T O PRONOUNCE UPON THIS QUESTION, IT MAY BE NECESSARY TO EXAMINE VARIOUS PR OVISIONS IN THE ACT AS WELL AS ITS SCHEME. THUS, THE QUESTION WHETHER SECT ION 17(1) WAS APPLICABLE TO THE CASE OF THE ASSESSEE-FIRM WAS NOT FREE FROM DOUBT. THEREFORE, THE ITO WAS NOT JUSTIFIED IN THINKING TH AT ON THAT QUESTION THERE COULD BE NO TWO OPINIONS. IT WAS NOT OPEN TO THE ITO TO GO INTO THE TRUE SCOPE OF THE RELEVANT PROVISIONS OF THE ACT IN A PROCEEDING UNDER SECTION 154 OF THE 1961 ACT. A MISTAKE APPARE NT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMET HING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. THUS, THE ITO WAS WHOLLY WRONG IN HOLDING THAT THER E WAS A MISTAKE APPARENT FROM THE RECORD OF THE ASSESSMENTS OF THE ASSESSEE-FIRM. THE REVENUE'S APPEAL WAS ACCORDINGLY DISMISSED'. 10. AFTER CONSIDERING THE ABOVE DECISIONS, THE HON' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RICHA & CO (SUPRA) HAS HELD AS UNDER: 'THE ADJUSTMENT, WHICH WAS SOUGHT TO BE MADE BY THE ASSESSING OFFICER, WAS NOT ONE OF THOSE PRIMA FACIE ADJUSTMENTS, PERMI SSIBLE WHILE ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 6 OF 10 EXERCISING POWER UNDER SECTION 143(1)(A). LAW IS FA IRLY WELL SETTLED THAT SECTION 154 HAS NO APPLICATION WHERE DEBATABLE ISSUES ARE INVOLVED. WHERE THE ERROR SOUGHT TO BE RECTIFIED IS FAR FROM SELF-EVIDENT, IT CEASES TO BE AN APPARENT ERROR. AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD SHOULD BE ONE WHICH IS NOT AN ERROR WHICH DEPENDS F OR ITS DISCOVERY ON ELABORATE ARGUMENTS ON QUESTIONS OF FACT OR LAW. TH E POWER EXERCISABLE UNDER SECTION 154 TO CORRECT 'ANY MISTAKE APPARENT FROM THE RECORD' IS UNDOUBTEDLY NOT MORE THAN THAT OF THE HIGH COURT TO ENTERTAIN A WRIT PETITION ON THE BASIS OF AN 'ERROR APPARENT ON THE FACE OF THE RECORD'. THAT BEING THE POSITION, THE TRIBUNAL'S CONCLUSION THAT THE MATTER COULD BE TAKEN UP IN A REGULAR PROCEEDING AND NOT UNDER SECT ION 154 WAS IN ORDER. ACCORDINGLY, THIS APPEAL WAS NOT ENTERTAINED. 11. FROM THE ABOVE JUDGEMENTS, IT IS CLEAR THAT ONL Y A MISTAKE WHICH IS GLARING AND APPARENT CAN BE RECTIFIED U/S 154 OF TH E ACT. IN THE CASE BEFORE US, THE AO HAD SET OFF THE LOSS OF THE ELIGI BLE UNITS FROM THE PROFITS OF THE ELIGIBLE UNITS TO CALCULATE THE DEDUCTION U/ S 80IA OF THE ACT. WHETHER THE LOSS FROM THE ELIGIBLE UNITS CANNOT BE SET OFF FROM THE PROFITS OF OTHER ELIGIBLE UNITS IS A DATABLE ISSUE AND THER EFORE, IT CANNOT BE RECTIFIED U/S 154 OF THE ACT. THEREFORE, WE ALLOW T HE GROUND OF APPEAL OF THE ASSESSEE. EVEN OTHERWISE, ON MERITS OF THE ISSU E WHICH IS RAISED IN GROUND NO.2, WE FIND THAT THE ISSUE IS COVERED IN F AVOUR OF THE ASSESSEE BY VARIOUS DECISIONS WHICH ARE RELIED UPON BY THE L D COUNSEL FOR THE ASSESSEE. SUB-SECTION 5 OF SECTION 80IA PROVIDES TH AT THE DEDUCTION SHOULD BE CALCULATED IN RESPECT OF AN ELIGIBLE UNIT ON A STANDALONE BASIS I.E. AS IF IT IS THE ONLY SOURCE OF INCOME TO THE A SSESSEE. THIS IS FOR THE REASON THAT AN ASSESSEE IS ELIGIBLE FOR DEDUCTION U /S 80IA FOR A PERIOD OF 10 YEARS AND THE FIRST OF THESE TEN YEARS CAN BE SE LECTED BY THE ASSESSEE. 12. IN THE CASE OF CIT VS. DEWAN KRAFT SYSTEMS () L TD (2008) 297 ITR 305, THE HON'BLE DELHI HIGH COURT HAS CLEARLY BROUG HT OUT THAT LOSS OF ELIGIBLE UNIT CANNOT BE SET OFF AGAINST THE PROFITS OF ANOTHER ELIGIBLE UNIT. RELEVANT PARAGRAPHS OF THE HON'BLE DELHI HIGH COURT DECISION ARE AS UNDER: '13. PERUSAL OF THE ABOVE PROVISION SHOWS THAT IT I S A DISTINCT AND SEPARATE DEEMING PROVISION WHICH LAYS DOWN THE SPEC IAL METHOD OF COMPUTING THE PROFITS AND GAINS ENTITLED TO DEDUCTI ON UNDER SECTION 80- IA OF THE ACT. MOREOVER, THIS PROVISION IS OF OVERR IDING NATURE PROVIDING SPECIFICALLY THAT DURING EACH OF THE ASSESSMENT YEA RS IN THE TAX HOLIDAY, PERIOD IN WHICH THE ASSESSEE IS ENTITLED TO DEDUCTI ON UNDER SECTION 80- IA OF THE ACT, THIS PROVISION WILL BE APPLIED AS IF THE INDUSTRIAL UNIT IS AN INDEPENDENT UNIT AND IS THE ONE AND ONLY SOURCE OF INCOME POSSESSED BY THE ASSESSEE. 14. IT IS CLEAR THAT WHILE COMPUTING DEDUCTION UNDE R SECTION 80-IA OF THE INCOME-TAX ACT, 1961, THE PROFITS AND GAINS OF KALA MB UNIT FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION UND ER SECTION 80- IA(5) OF THE ACT IS TO BE COMPUTED IF SUCH ELIGIBLE BUSINESS OF THE SAID UNIT IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. THE A SSESSING OFFICER MIXED THE PROFITS OF THE KALAMB UNIT WITH THE PROFITS OF UNITS AT DELHI AND NOIDA AND, THUS, HE ITA NO 2146 OF 2017 NSL RENEWAB LE POWER P LTD HYDERABAD ERRONEOUSLY RESTRICTED THE DEDUCTION TO T HE EXTENT OF BUSINESS INCOME AND THIS WAS DONE BY HIM IN TOTAL DISREGARD OF THE PREVISIONS OF SUB-SECTION (7) OF SECTION 80-IA OF THE ACT AS MENT IONED ABOVE. ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 7 OF 10 15. THUS, THE KALAMB UNIT BEING THE ONLY UNIT OF TH E ASSESSEE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE ACT IS TO BE T REATED AS AN INDEPENDENT UNIT AND THE SAME IS TO BE TREATED AS T HE ONLY SOURCE OF INCOME FOR ASSESSEE FOR THE PURPOSE OF COMPUTING DE DUCTION UNDER SECTION 80-IA OF THE ACT. THE DEDUCTION CLAIM ED BY THE ASSESSEE UNDER SECTION 80-IA OF THE ACT, THUS, IS IN ACCORDA NCE WITH THE SAID PROVISIONS AND AS SUCH WE FIND THAT THERE IS NO INF IRMITY IN THE IMPUGNED ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL'. 13. IN THE CASE OF PUNIT CONSTRUCTION CO (SUPRA), T HE COORDINATE BENCH OF THE TRIBUNAL AT MUMBAI HAS CONSIDERED VARIOUS JU DICIAL PRECEDENTS INCLUDING THE DECISION OF THE HON APEX COURT IN THE CASE OF PLASTIBLENDS INDIA LTD VS. ADD. CIT WHICH WAS RELIED UPON BY THE LEARNED DR, AND HAS HELD AS UNDER: '13. IN THIS CASE, THE ASSESSEE IS INTO TWO SEGMENT OF BUSINESS I.E. CONSTRUCTION BUSINESS WHICH IS NON ELIGIBLE AND POW ER GENERATION BUSINESS WHICH IS ELIGIBLE BUSINESS U/S 80IA OF THE ACT. ADMITTEDLY, THE ASSESSEE HAS SET UP 5 WIND MILLS OUT OF WHICH TWO W IND MILLS ARE SET UP IN THE FINANCIAL YEAR RELEVANT A.YS. 2005- 06 AND 2006 -07 AND REMAINING 3 WIND MILLS HAVE BEEN SET UP DURING THE FINANCIAL YE AR RELEVANT TO A.Y. 2011-12. ALL 5 WIND MILLS ARE SITUATED AT DIFFERENT LOCATIONS AND COMMENCED PRODUCTION AT DIFFERENT POINT OF TIME. AL L 5 WIND MILLS ARE ELIGIBLE UNITS FOR DEDUCTION U/S 80IA OF THE ACT. T HE ASSESSEE HAS DERIVED PROFIT FROM 2 WIND MILLS AND INCURRED LOSSES FROM 3 WIND MILLS. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IA IN RESPECT OF PROFIT OF 2 WIND MILLS WITHOUT SET OFF OF LOSSES OF 3 WIND MILLS, CO NSIDERING EACH WIND MILL AS A SEPARATE UNIT ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE'S CLAIM OF DEDUCTION U/S 80IA IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 80IA(5) OF THE ACT AND ALSO I N CONSONANCE WITH THE DECISIONS OF ITAT, AHMEDABAD SPECIAL BENCH AND ITAT , BANGALORE DECISION. HENCE, WE DIRECT THE AO TO ALLOW DEDUCTIO N CLAIMED U/S 80IA OF THE INCOME TAX ACT, 1961. 14. IN THE CASE OF JINDAL ALUMINIUM LTD (SUPRA), IN SIMILAR CIRCUMSTANCES IT WAS HELD AS UNDER: '13. COMING BACK TO THE FACTS OF OUR CASE WE OBSERV E THAT THE GROSS TOTAL INCOME OF THE ASSESSEE IS AT RS. 8,03,26,598 LAKHS AFTER ADJUSTING THE LOSSES SUFFERED BY IT IN THE ELIGIBLE AS WELL AS PR OFITS OF THE NON-ELIGIBLE UNITS. THERE ARE NO BROUGHT FORWARD LOSSES OR UNABS ORBED DEPRECIATION. THE CLAIM OF DEDUCTION UNDER SECTION 80-IA WAS IN R ESPECT OF ELIGIBLE UNIT 4.14 MW WIND ENERGY DIVISION AT RS. 4,72,28,143 AND THE DEDUCTION U/S.80HHC OF THE ACT WAS CLAIMED IN RESPECT OF OTHE R UNITS AT RS.15,51,440. EVEN IF BOTH THE DEDUCTIONS ARE ADDED THE SUM TOTAL IS OBVIOUSLY LESS THAN THE GROSS TOTAL INCOME. IN OUR CONSIDERED OPINION THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS IT A NO 2146 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD ERRED IN INTERP RETING THE RELEVANT PROVISION WHEN HE HELD THAT THE LOSSES SUF FERED BY THE ASSESSEE IN TWO ELIGIBLE UNITS BE REDUCED FROM THE INCOME OF THE OTHER ELIGIBLE UNIT BEFORE GRANTING THE DEDUCTION UNDER SECTION 80-IA. SINCE THE FACTS OF THE CASE IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPRA) L IE IN AN ALTOGETHER DIFFERENT COMPARTMENT, WE HOLD THAT THE RATIO OF TH AT CASE CANNOT BE CONSIDERED FOR APPLICATION TO THE ASSESSEE' S CASE. ACCORDINGLY, THE ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 8 OF 10 IMPUGNED ORDER IS OVERTURNED AND THE ASSESSEE IS AL LOWED DEDUCTION UNDER SECTION 80-IA ON THE PROFIT DERIVED BY IT FRO M ELIGIBLE UNIT 4.14 MW WIND ENERGY UNIT AT RS.4,72,28,143. 14. WE FIND THAT THE CIT(A) IN THE PRESENT CASE HAS DISREGARDED THE BINDING DECISION OF THE ITAT. THE BASIS ON WHICH TH E CIT(A) REFUSED TO FOLLOW THE ORDER OF THE ITAT IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2006-07 CANNOT BE SUSTAINED. IN THE CASE OF ME ERA COTTON & SYNTHETIC MILLS (P) LTD. (SUPRA) THE BOMBAY BENCH O F THE ITAT AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPRA) HAD CLEARLY HELD THAT THE STAGE AT WHICH SET OFF HAS TO BE DONE IS ONLY AFTER AGGREGATION OF INC OME UNDER ALL HEADS. THE CIT(A) DID NOT AGREE WITH THIS REASONING OF THE ITAT. THE FACTS OF THE PRESENT CASE ARE CLEARLY IDENTICAL TO THE FACTS, AS IT PREVAILED IN THE CASE OF MEERA COTTON & SYNTHETIC MILLS (P) LTD. (SUPRA) THE CIT(A) BEING AN AUTHORITY LOWER IN THE TIER OF AUTHORITIES UNDER TH E ACT TO THAT OF THE ITAT, IS BOUND TO FOLLOW THE DECISION OF THE ITAT. IN OUR VIEW, THE CIT(A) IN THE PRESENT CASE HAS FOR NO VALID REASON REFUSED TO FOL LOW THE DECISION OF THE HON'BLE ITAT'. 15. FURTHER, IN THE CASE OF MEERA COTTON & SYNTHETI CS MILLS (P) LTD (SUPRA), THE COORDINATE BENCH OF THE TRIBUNAL HAS H ELD AS UNDER: '9. SECTION 80A(1) PROVIDES THAT IN COMPUTING TOTAL INCOME OF THE ASSESSEE, THERE SHALL BE ALLOWED FROM THE GROSS TOT AL INCOME THE DEDUCTIONS SPECIFIED IN SECTIONS 80-C TO 80-U. SUB- SECTION (2) FURTHER PROVIDES THAT THE AGGREGATE AMOUNT OF DEDUCTIONS UN DER THIS CHAPTER SHALL NOT IN ANY CASE EXCEED THE GROSS TOTAL INCOME OF THE ASSESSEE. THE GROSS TOTAL INCOME HAS BEEN DEFINED UNDER SECTION 8 0B (5) TO MEAN 'THE TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE PROVIS IONS OF THIS ACT, BEFORE MAKING ANY DEDUCTION UNDER THIS CHAPTER.' IT THEREFORE FOLLOWS THAT THE PRIMARY STEP FOR CONSIDERING THE GRANT OF DEDUCTIONS UNDER CHAPTER VI-A IS TO DETERMINE THE GROSS TOTAL INCOME , WHICH, IN TURN, IS COMPUTED BY AGGREGATING THE INCOME FROM ALL THE SOU RCES IN THIS YEAR AFTER ADJUSTING THE LOSSES OF THE CURRENT YEAR UNDE R ANY HEAD. THE BROUGHT FORWARD LOSS OR UNABSORBED DEPRECIATION ETC ., ARE ALSO REDUCED. THE RESULTANT FIGURE IS DETERMINED AS GROSS TOTAL I NCOME. TO PUT IT SIMPLY GROSS TOTAL INCOME IS THE INCOME AVAILABLE AT THE D ISPOSAL OF THE ASSESSEE IMMEDIATELY BEFORE ALLOWING DEDUCTIONS UNDER CHAPTE R VI-A. IF THE GROSS TOTAL INCOME IS SAY RS. 100 AND THE ASSESSEE IS ENT ITLED TO DEDUCTION UNDER SECTION 80-IB AT RS. 150, THEN THE AMOUNT OF DEDUCTION UNDER SECTION 80-IB WILL BE RESTRICTED TO RS. 100 A S PER THE MANDATE OF SECTION 80A WHICH PROVIDES THAT THE DEDUCTIONS S HALL BE ALLOWED FROM THE GROSS TOTAL INCOME AND THE AGGREGATE AMOUNT OF ALL THE DEDUCTIONS SHALL NOT IN ANY CASE EXCEED THE GROSS TOTAL INCOME OF THE ASSESSEE. IF HOWEVER THE AMOUNT OF ELIGIBLE RELIEF UNDER SECT ION 80-IB IS SAY RS. 90, THEN FULL AMOUNT WILL BE ELIGIBLE FOR DEDUCTION BEC AUSE THE AMOUNT OF THE ELIGIBLE RELIEF DOES NOT EXCEED THE GROSS TOTAL INC OME. THEREFORE IT IS MANDATORY TO WORK OUT THE ELIGIBLE AMOUNT OF DEDUCT ION UNDER VARIOUS SECTIONS OF CHAPTER VI-A INDIVIDUALLY AND THEN SUCH AGGREGATE AMOUNT HAS TO BE RESTRICTED TO THE AMOUNT OF GROSS TOTAL I NCOME AS COMPUTED UNDER SECTION 80B(5), WHICH MEANS THE INCOME AVAILA BLE AFTER ADJUSTING ALL THE BROUGHT FORWARD LOSSES AND UNABSORBED DEPRE CIATION ETC. ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 9 OF 10 16. IN THE CASE OF SRIRAM PROPERTIES (P) LTD (SUPRA ), THE COORDINATE BENCH AT CHENNAI HAS HELD AS UNDER: '19. WE ARE REMINDED OF THE CELEBRATED JUDGMENT REN DERED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. CANARA WORKSHOP (P.) LTD. [1986] 27 TAXMAN 262/161 ITR 320 IN WHICH THE ASSES SEE WAS ENGAGED IN THE MANUFACTURE OF AUTOMOBILE SPARES. THE PRODUC TS MANUFACTURED BY IT WERE COVERED BY THE LIST IN THE FIFTH SCHEDULE T O THE INCOME-TAX ACT. DURING THE RELEVANT PERIOD, THE ASSESSEE COMMENCED ANOTHER ACTIVITY, THAT IS THE MANUFACTURE OF ALLOY STEELS, WHICH WAS ALSO AN INDUSTRY COVERED IN THE FIFTH SCHEDULE. THE ASSESSEE SUSTAINED LOSS IN THE ALLOY STEEL INDUSTRY BUT PROFIT IN THE OTHER INDUSTRY. IT CLAIMED DEDUCT ION IN RESPECT OF THE PROFIT WITHOUT REDUCING THE LOSS FROM THE ALLOY STE EL INDUSTRY. THE ITO HELD THAT THE ASSESSEE WILL BE ENTITLED TO DEDUCTIO N UNDER SECTION 80E ON THE PROFITS FROM THE MANUFACTURE OF AUTOMOBILE PART S ONLY AFTER SETTING OFF THE LOSS IN ALLOY STEEL MANUFACTURE. THE HIGH COURT DECIDED THE POINT IN ASSESSEE'S FAVOUR. THE REVENUE ASSAILED THE JUDGMEN T OF THE HON'BLE HIGH COURT BEFORE THE HON'BLE SUPREME COURT. WHILE AFFIR MING THE VIEW TAKEN BY THE HON'BLE HIGH COURT, IT WAS HELD THAT IN COMP UTING THE PROFITS FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80E, THE LOS S INCURRED BY THE ASSESSEE IN THE MANUFACTURE OF ALLOY STEELS (A PRIO RITY INDUSTRY) COULD NOT BE SET OFF AGAINST THE PROFITS OF THE MANUFACTURE O F AUTOMOBILE ANCILLARIES (ANOTHER PRIORITY INDUSTRY) AND HENCE THE ASSESSEE WAS ENTITLED TO DEDUCTION AT THE SPECIFIED RATE ON THE ENTIRE PROFI TS OF THE AUTOMOBILE PARTS INDUSTRY INCLUDED IN THE TOTAL INCOME WITHOUT DEDUCTING THERE FROM THE LOSS IN THE ALLOY STEEL MANUFACTURE. FACTS INVO LVED IN THE INSTANT APPEAL ARE MUTATIS MUTANDIS SIMILAR. 20. THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CA SE OF CIT V. VISAKHA INDUSTRIES LTD. [2001] 251 ITR 471/118 TAXM AN 777 HAS ALSO TAKEN THE SIMILAR VIEW BY HOLDING THAT THE DEDUCTIO NS CONTEMPLATED UNDER SECTION 80HH AND 80-I ARE TO BE ALLOWED WITH REFERENCE TO THE PROFITS OF THE PARTICULAR INDUSTRIAL UNDERTAKING AN D NOT WITH REFERENCE TO THE TOTAL INCOME OF THE ASSESSEE AND THEREFORE LOSS IN AN OTHER UNIT CANNOT BE SET OFF AGAINST THE PROFITS OF ELIGIBLE UNIT. 21. IN THE INSTANT CASE, WE OBSERVE THAT GROSS TOTA L INCOME OF THE ASSESSEE IS RS. 2,56,37,975/- AFTER ADJUSTING LOSSES SUFFERE D BY THE ASSESSEE IN THE ITA NO 2146 OF 2017 NSL RENEWABLE POWER P LTD H YDERABAD OTHER TWO 'PROJECTS VIZ. 'SHREYAS' AND 'COIMBATORE'. THER E ARE NO BROUGHT FORWARD LOSSES OR UNABSORBED DEPRECIATION. THE CLAI M OF DEDUCTION U/S 80IB IN RESPECT OF THE TWO ELIGIBLE UNITS VIZ. 'SPA NDHANA' AND 'SAMRUDDHI' OF RS. 2,23,22,237/- IS OBVIOUSLY LESS THAN THE GRO SS TOTAL INCOME. IN OUR CONSIDERED OPINION, THE ASSESSING OFFICER AS WELL A S THE LD. CIT(A) ERRED IN INTERPRETING THE RELEVANT PROVISIONS WHEN THEY H ELD THAT THE LOSSES SUFFERED BY THE ASSESSEE FROM TWO PROJECTS, VIZ. 'S HREYAS' AND 'COIMBATORE' BE REDUCED FROM THE PROFITS OF THE OTH ER TWO UNITS VIZ. 'SPANDHANA' AND 'SAMRUDDHI' FOR GRANTING DEDUCTION U/S 80IB. ACCORDINGLY, THE IMPUGNED ORDERS OF THE LOWER AUTHO RITIES ARE SET ASIDE. THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTIO N U/S 80IB ON THE PROFITS DERIVED BY THE ASSESSEE FROM TWO PROJECTS V IZ. 'SPANDHANA' AND 'SAMRUDDHI' OF RS. 2,23,22,237/-. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED'. ITA NO 988 OF 2017 NSL RENEWABLE POWER P LTD HYDERABAD PAGE 10 OF 10 17. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE HOLD THAT THE LOSS OF THE ELIGIBLE UNITS CANNOT BE SET OFF AGAINST THE PR OFITS OF OTHER ELIGIBLE UNITS. 18. AS REGARDS THE THIRD GROUND OF THE APPEAL AGAIN ST THE OBSERVATIONS OF THE CIT (A) THAT IT IS ONLY THE BUSINESS INCOME OF THE ELIGIBLE UNIT AND NOT THE GROSS TOTAL INCOME ELIGIBLE FOR DEDUCTION U/S 8 0IA OF THE ACT, WE FIND THAT THE CASE LAW RELIED UPON BY THE ASSESSEE AND I N SUPPORT OF GROUND NO.2 ARE ALSO APPLICABLE TO THIS ISSUE. RESPECTFULL Y FOLLOWING THE SAME, WE DELETE THE FINDINGS OF THE CIT (A). 9. THUS, THE ASSESSEES GROUNDS OF APPEAL NOS. 1 & 2 ARE ALLOWED, PARTICULARLY BECAUSE, SUCH AN ISSUE CANNOT BE DECIDED IN THE PROCEEDINGS U/S 154 OF THE I.T. ACT AS ONLY SUC H MISTAKES WHICH ARE APPARENT FROM THE RECORD CAN BE RECTIFIED AND THE LAW IS CLEAR THAT DEDUCTION U/S 80IA IS TO BE ALLOWED FROM THE GROSS TOTAL INCOME. THEREFORE, THERE IS NO MISTAKE APPARENT FRO M THE RECORD WHICH NEEDED RECTIFICATION U/S 154 OF THE ACT. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2020. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 29 TH SEPTEMBER, 2020. VINODAN/SPS COPY TO: 1 NSL RENEWABLE POWER (P) LTD, 8-2-684/2/A, NSL ICO N, ROAD NO.12, BANJARA HILLS, HYDERABAD 500034 2 DY. CIT, CIRCLE 16(1) IT TOWERS, AC GUARDS, HYDER ABAD 500004 3 CIT (A)-4, HYDERABAD 4 PR. CIT -4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER