WARMTH WINDPOWER LLP,MUMBAI V. ITO WARD 20(3)(1), MUMBAI

ITA 596/MUM/2025

AI Insights

The case involves Warmth Windpower LLP, which appealed against the orders of the National Faceless Appeal Centre (NFAC), Delhi, concerning the denial of deductions claimed under Section 80IA(4)(iv) of the Income Tax Act, 1961, for the assessment years 2018-19 and 2020-21. The primary contention was whether the assessee, as a transferee of a wind power generation undertaking through a slump sale, was eligible for deductions under the said section. The Tribunal examined the nature of the transaction between JAL and Vision Finstock LLP and found it to be a slump sale, thus entitling the assessee to the deductions claimed. The Tribunal also addressed the issue of depreciation claimed by the assessee, affirming its correctness based on the written down value of the asset as per the previous owner's depreciation schedule.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47042 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2020-2021
• Other Referred Cases: Armstrong Knitting Mills Private Limited v. DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHANGEPATIL PUSHKARAJ RAMESH
• Assessee Lawyers: VIJAY MEHTA; TARANG MEHTA
• Keywords: Depreciation; Gift
• Section: 143(3); 143(2); 250; 32; 13; 2(A); 80IA

Judgement Text

"1 595 & 596/Mum/2025 Warmth Windpower LLP IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.595/Mum/2025 - A.Y. 2018-19 ITA No.596/Mum/2025 - A.Y. 2020-21 M/s Warmth Windpower LLP 3, Narayan Building, 23, LN Lane, Dadar (East), Mumbai- 400 014 PAN: AACFW4790P vs NFAC, Delhi/ Income Tax Officer 20(3)(1) Piramal chamber, Lalbaug Parel, Mumbai-400 013 APPELLANT RESPONDENT Assessee by :Shri Vijay Mehta & Shri Tarang Mehta Respondent by : Shri Bhangepatil Pushkaraj Ramesh – Sr AR Date of hearing : 03/04/2025 Date of pronouncement : 09/04/2025 O R D E R Per Anikesh Banerjee (JM): Both the appeals of the assessee were filed against the orders of the National Faceless Appeal Centre (NFAC), Delhi *in short ‘Ld.CIT(A)’+, order passed under section 250 of the Income-tax Act, 1961 for A.Ys 2018-19 & 2020-21, date of orders for both the appeals, 24/12/2024. The impugned orders were emanated from the order of the Assessment Unit, Income-tax Department, order passed under section 143(3) read with section 144B of the Act, date of order for A.Ys. 2018-19 & 2020-21 on dated 17/06/2021 and 19/09/2022, respectively. 2 595 & 596/Mum/2025 Warmth Windpower LLP 2. Both the cases are same nature of fact & common issue. Accordingly, we have taken together, heard together, and disposed of together. The ITA No. 595/Mum/2025 is taken as lead case. 3. The assessee has taken the following grounds. “Being aggrieved by the appellate order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeals Centre (NFAC), Delhi, this appeal petition is submitted on the following grounds, which it is prayed may be considered independently without prejudice to one another:- 1. On facts and circumstances of the case and in law, the order passed by Ld. CIT(A) stating that opportunity of personal hearing was granted through personal hearing but appellant did not attend is completely incorrect statement.as we had requested on 16-12-2024 to grant VC on either 19th or 20th of December, 2024. Thus, appellate order passed without granting VC is an arbitrary order and bad in law which needs to be quashed. 2. Eligibility of Claim of deduction u/s. 801A of Rs. 6,15,01,555/- a. On facts and circumstances of the case and in law, Ld CIT(A) erred in confirming the disallowance of the deduction claimed u/s. 80IA of Rs. 6,15,01,555/-by holding that the appellant has failed to prove that the seller had treated ten windmills as an undertaking and offered the same under section 50B and Form 3CEA filed by the appellant of the seller is not digitally signed and no acknowledgment number for digitally filed form were filed. Disallowance of claim of deduction u/s. 801A ignoring the submissions of the appellant and without providing further opportunity to elaborate the submissions, is bad in law and needs to be cancelled. b. On facts and circumstances of the case and in law, Ld CIT(A) erred in holding that the existing business of M/s. Jaiprakash Associates have been split to create an undertaking by selling ten wind mills as fixed assets and no undertaking is acquired by the appellant resulting in automatically applicability of the provisions of s. 801A(3). Ignoring the confirmation and Form 3CEA of M/s. Jaiprakash Associates wherein transfer of undertaking is proved, confirmation of the disallowance holding that the undertaking is formed by splitting of the business already in existence is bad in law and needs to be cancelled. On facts and circumstances of the case and in law, Le CIT(A) erred indamissing the ground of appeal relating to disallowance of depreciation of Rs. 68,40.972-worked out and deducted by the appellant holding the ground as superfluous Ld CIT(A) erred in not deciding the ground relating to the disallowance worked out at Rs. 14,56,66,344/- by Ld. AO but not reduced from the income as it was subject to the decision related to the allowance of the deduction claimed by the appellant under section 801A(4)(iv). Depreciation of Rs. 68,40,972- duty worked out on Written down value and duly claimed in the computation, no further deduction needs to be made as worked out by Ld. AO. 3 595 & 596/Mum/2025 Warmth Windpower LLP 3. The appellant craves leave to add, to amend, alter / delete and/or modify the above grounds of appeal on or before the final hearing.” 4. Facts of the case are that the assessee is engaged in the business of generation and distribution of power. For the year under consideration, the assessee had filed its return of income declaring income at Rs. Nil after claiming a deduction of Rs. 6,15,01,555/- u/s 80IA(4)(iv) of the Act. During the year, the assessee has generated power through its wind power generation unit situated at Maharashtra (undertaking). The power generated from the undertaking was distributed to Maharashtra State Electricity Distribution Company (in short MSEDC). 5. The said undertaking was formed in Financial Year 2007-08 (A.Y. 2008- 09) by one M/s. Jaiprakash Associates Limited when it received a Commencement Certificate in respect of its power generating windmills (APB 22, 25, 28). The said undertaking was formed in compliance with conditions u/s. 80IA(3) of the Act and hence, Jaiprakash Associates Limited (in short JAL) was entitled for a deduction u/s. 80IA(4)(iv) of the Act in respect of its power generating undertaking for a period of ten years out of the first fifteen years of operation. 6. Thereafter, on 30.09.2015, JAL sold the entire undertaking by way of a slump sale to one M/s. Vision Finstock LLP, which is a group entity of the assessee. Pursuant to such slump sale, a tripartite agreement was entered into amongst JAL, Vision FinstockLLP and Maharashtra State Electricity Distribution Company on 21.01.2016. (APB 31) 7. Thereafter, the entire undertaking was gifted by Vision Finstock LLP to the assessee on a going concern basis on 31.03.2017 (APB 43). A No Objection Certificate was issued by the MSEDC for the transfer of the ten windmills in the 4 595 & 596/Mum/2025 Warmth Windpower LLP name of the assessee (APB 55, 56). Pursuant to the said transfer, a tripartite agreement was entered into amongst Vision Finstock LLP, the assessee, and MSEDC on 04.07.2018 (PBP 57). 8. The case of the assessee was selected for complete scrutiny and notice u/s. 143(2) was issued on 28.09.2019. The Ld. AO observed that the claim of deduction u/s. 80IA(4)(iv) of the Act was made for the first time by the assessee in the year under consideration. During the assessment proceedings, the Ld.AO proposed to deny the entire claim of deduction u/s. 80IA(4)(iv) of the Act made by the assessee. The Ld. AO was of the view that there is no evidence that the assessee has generated and distributed the power to the MSEDC. Further, the assessee has not filed the copies of invoices and certain other documents. 9. The Ld. AO has further observed, without prejudice to his denial of claim in toto, that the quantification of the claim made by the assessee is also incorrect. According to the AO, while calculating the deduction u/s. 80IA(4)(iv) of the Act, the assessee ought to have reduced the depreciation allowance on windmill at Rs. 14,56,66,937/- being depreciation @ 40% on the cost of windmill at Rs. 36,41,67,344/-. As against the above, according to the Ld. AO, the assessee has claimed depreciation of only Rs. 68,40,972/- being depreciation @ 40% on the cost of windmill at Rs. 1,71,02,429/-. In fact, the Assessing Officer has doubted as to whether the claim of depreciation made by the assessee was in respect of cost of windmill or cost of other assets. Accordingly, the Ld. AO held that even if, in appeal, the claim of the assessee is allowed, then the income from generation of power should be reduced by the claim of depreciation of Rs. 14,56,66,937/-.Accordingly the Ld. AO rejected the 5 595 & 596/Mum/2025 Warmth Windpower LLP claim of the assessee U/s 80IA amount to Rs. 6,15,01,555/-. Being aggrieved the assessee filed an appeal before the Ld. CIT(A). 10. During the Appellate proceedings, the assessee submitted explanation and required details. It was argued by the assessee that the claim of deduction is available qua the undertaking and not qua the assessee. Therefore, the claim of a deduction is always available to the transferee of the undertaking for the balance period (being five out of fifteen years). The assessee relied upon the CBDT circular dated 13.12.1963 bearing no. F. No. 15/5/63-IT(A-1) and various judicial precedents wherein it was held that the transferee of an undertaking is eligible for deduction. The Ld.CIT(A) accepted the legal position that the claim of deduction was available qua the undertaking and is not qua assessee. He held that if the assessee is a transferee of the undertaking and it has acquired such undertaking on a slump sale basis, it would be entitled for deduction. 11. However, the Ld. CIT(A) raised doubt as to whether the transfer of the undertaking from JAL to Vision Finstock LLP had occurred on a going concern basis, i.e., by way of a slump sale. According to the Ld. CIT(A), in order to determine the nature of the transaction, it is necessary to find out the manner in which JAL has offered capital gain tax on transfer of the assets. If the transfer is on a slump sale basis, it must have resulted a disclosure of capital gain in the computation of income of JAL u/s. S. 50B of the Act. Accordingly, the assessee was required to furnish computation of income, form 3CEA and other documents of JAL in support of the claim of slump sale. In response, the assesseefurnished Annual Report, Form 3CEA and a confirmation certificate issued by JAL to demonstrate that the said company has offered the gain as income u/s. 50B of the Act. 6 595 & 596/Mum/2025 Warmth Windpower LLP 12. The Ld. CIT(A), after going through the Form 3CEA of JAL, was of the view that the said form 3CEA was not reliable since the same was without any digital signature of the Chartered Accountant (APB 40). Further, annual report (APB 35) and the certificate (APB 42) issued by the JAL was discarded on the ground that the same cannot be held as sacrosanct. 13. On the basis of the above finding, the Ld. CIT(A) has held that the assessee has failed to prove that JAL has sold the entire power generating undertaking to Vision Finstock LLP on a slum sale basis. Since the transfer of asset to Vision Finstock LLP has not been proved to be transfer of an undertaking, there is no formation of a new undertaking. The undertaking of the assessee, therefore, has been formed by way of restructuring or splitting of the existing undertaking and, hence, the assessee is not eligible for deduction u/s. 80IA(4)(iv) of the Act. 14. The Ld. CIT(A) has also upheld the observation of the Ld. AO in respect of the claim of depreciation made by the assessee. The Ld. CIT(A) has further held that the said ground of appeal filed by the assessee has become infructuous.Accordingly, the appeal of the assessee was dismissed. Being aggrieved on the appeal order the assessee filed an appeal before us. 15. The Ld. AR argued and filed the paper book which is containing pages 1 to 147. He stated that Ground No. 1 is not pressed. Grounds No. 2 (a) and 2(b), the assessee is challenging the denial of claim of deduction of Rs. 6,15,01,555/- made u/s. 80IA(4)(iv) of the Act. Vide Ground No. 2(c), the assessee is challenging the treatment of claim of depreciation of Rs. 68,40,472/- made by the assessee. The Ld. AR argued that the assessee claimed the deduction U/s 7 595 & 596/Mum/2025 Warmth Windpower LLP 80IA of the Act Amount to Rs. 6,15,01,555/- in computation of total income (APB pages 1-3). 16. It is submitted that for the purpose of determining the eligibility of the claim, what is relevant is the nature of transaction i.e. whether the undertaking, as a whole, has been transferred on a going concern basis or not. The method of calculation of income arising out of such transfer in the hands of the seller is not determinative. One can transfer the entire undertaking and still offer the income u/s. 45 of the Act (without taking recourse to S. 50B of the Act). This may be due to non-fulfilment of certain conditions of S. 50B of the Act. One of the conditions for bringing the transaction within the fold of the S. 50B of the Act is that there should be a single consideration for the entire undertaking and not separate considerations for each of the item of assets and liabilities. Therefore, if there is an itemised sale, the gain may not be offered u/s. 50B of the Act. Thus, there could be several reasons for offering the gain u/s. 50B or u/s. 45 of the Act. However, this is not determinative of nature of transaction. 17. It is submitted that the JAL has transferred the entire undertaking to Vision Finstock LLP on a slump sale basis as a going concern. This is evident from the Annual Report of JAL for F.Y. 2016-17 wherein, the said slump sale is expressly mentioned in note (e) of the Directors’ Report (APB 38). It is respectfully submitted that the allegation of Ld. CIT(A) that the Annual Reports cannot be regarded as sacrosanct is completely unfounded. The Annual Report of the company, more particularly a listed company, is a statutory document and available to public at large. It serves as an official declaration of the company's accountability to its shareholders, regulators, and to the public at 8 595 & 596/Mum/2025 Warmth Windpower LLP large. The information contained therein has to be treated as correct, more particularly when nothing adverse has been brought on record. 18. Similarly, certificate issue by the Chartered Accountant in Form 3CEA which has been uploaded on the Income-tax portal, clearly suggest that the sale was made on a slump sale basis (APB 40). Additionally, JAL has issued a certificate (APB 42) confirming that the sale has been on a slump sale basis. This certificate has not been disproved by the authorities below nor any contrary material has been brought on record. 19. It is submitted that, in facts of the present case, not only the transfer is on a slump sale basis but the same has been offered to tax by JAL u/s. 50B of the Act. Following documents would clearly establish that the gain has been offered by Jaiprakash Associates Limited u/s. 50B of the Act. i. Annual Report for F.Y. 201617 (APB 38) ii. Form No. 3CEA (APB 40) iii. Certificate issued by JAL to the assessee (APB 42) 20. It is respectfully submitted that if all the above documents are analysed holistically, it can be safely concluded that JAL has transferred the entire undertaking consisting of all its assets and liabilities in exchange for one single consideration and the gain has been offered u/s 50B of the Act. Otherwise, there is no reason for JAL to obtain Form No. 3CEA from the Chartered Accountant and upload it on Income Tax portal. 21. The allegation that the computation of income of JAL is within the reach of assessee and the assessee is deliberately withholding the same is baseless 9 595 & 596/Mum/2025 Warmth Windpower LLP and factually incorrect. It is submitted that JAL is a separate and independent entity, and the assessee neither possesses nor has control over the said document. 22. As regards the observation of the Ld. CIT(A) that Form 3CEA is not signed by a Chartered Accountant and hence cannot be relied upon, it is respectfully submitted that the said document was uploaded by JAL on its income-tax portal. This is evident from the watermark of the Income-tax Department appearing on the document. 23. Ground No. 2(c) of the appeal of the assessee refers to the calculation of eligible claim u/s. 80IA(4)(iv) of the Act by claiming the correct amount of depreciation on windmill. So far as the issue of calculation of depreciation is concerned, it is submitted that there are no two opinions about the proposition that while calculating the eligible profit, the correct amount of depreciation has to be reduced. In this regard, it is submitted that the assessee has calculated the depreciation on windmill correctly and the Ld. AO and Ld. CIT(A) have misguided themselves in considering the book value of windmill as against the written down value of the previous owner. 24. It is an admitted fact that the assessee has received the windmill undertaking from Vision Finstock LLP by way of a gift. Under Section 32 of the Act, the depreciation is to be calculated at a prescribed rate on actual cost/written down value. The actual cost has been defined as u/s. 43(1) of the Act. As per Explanation 2 to the said clause, where the asset is acquired by the assessee by way of a gift, the actual cost of the asset to the assessee shall be the actual cost to the previous owner as reduced by the depreciation actually allowed. Therefore, the assessee has correctly calculated the depreciation on 10 595 & 596/Mum/2025 Warmth Windpower LLP the actual cost, which is the cost as per the depreciation schedule of Vision Finstock LLP for A.Y. 2017-18. 25. In this regard, the attention is invited to APB 62, which is the calculation of depreciation of Vision Finstock LLP for A.Y. 2016-17. After claiming the depreciation of Rs. 34,20,48,570/-, the closing WIP is Rs. 8,55,12,143/-. The said figure has been taken by Vision Finstock LLP as opening WIP for A.Y. 2017- 18 (APB 79). After claiming the depreciation, the closing WIP as on 31.03.2017 is Rs. 1,71,02,429/-. The assessee, who has received the undertaking by way of a gift on 31.03.2017, has taken opening WIP at Rs. 1,71,02,429/- and correctly claimed the depreciation of Rs. 68,40,972/- (APB 3). Thus, the assessee has correctly calculated the depreciation at Rs. 68,40,972/-. The Ld. AO and Ld. CIT(A) has taken the cost of windmill at Rs. 36,41,67,344/-, which is the book value and the same is irrelevant for the purpose of claiming depreciation u/s. 32 of the Act. 26. The Ld. DR vehemently argued and submitted a written submission which is containing pages 1 to 26. He argued that the assessee, being transferee of an undertaking, is not eligible for claim of deduction u/s. 80IA(4)(iv) of the Act. He has relied upon the orders passed by the revenue authorities. A transferee who has acquired the undertaking, by way of a slump sale or otherwise would not be eligible, under any circumstances, to claim the deduction. This is because, according to DR, subsequent transfer of the undertaking would amount to reconstruction/splitting up of the undertaking and thereby, violating the conditions of S. 80IA(3) of the Act. The Ld. DR also relied upon the decision of the coordinate bench of ITAT-Chennai in the case of Armstrong Knitting Mills Private Limited v. DCIT, 30 taxmann.com 271in support of his 11 595 & 596/Mum/2025 Warmth Windpower LLP argument. The relevant paragraph of the DR’s submission is reproduced as below: - “The Revenue respectfully prays that the assessee's appeal be dismissed, and the disallowance of Rs.6,15,01,555/- under Section 80-IA(4)(iv) be upheld in full. The assessee's grounds have no merit: 33. The so-called undertaking was not newly set up by the assessee but acquired fully second-hand; hence it fails the fundamental conditions of Section 80-IA(3). It was a reconstruction of an existing business and was formed by transfer of used assets, rendering it ineligible for the deduction. 34. The income tax benefit does not run with the asset in this situation. There is no provision allowing this tax holiday to be claimed by a transferee who merely steps into the shoes of the original owner. On the contrary, the legislative amendments and CBDT's guidance indicate a clear prohibition on transferring the deduction to prevent abuse. The assessee's interpretation to the contrary is unsupported by the Act and precedent. 35. No procedural unfairness vitiated the first appellate proceedings, and the assessee's rights have been fully heard at this stage. Thus, there is no cause for remand on that ground. 36. The issue of government agreement is irrelevant for power undertakings, and we agree it does not affect eligibility under clause (iv). The denial of deduction is not for want of an agreement, but for failure to satisfy other statutory conditions. 37. Even if, arguendo, the undertaking were considered eligible, the quantum of deductible profit would be near-zero after mandatorily accounting for depreciation as per Plastiblends (SC). The assessee's attempt to claim deduction on inflated profits (by ignoring the majority of depreciation) cannot be permitted. In fact, after proper depreciation, the assessee's windmill unit 12 595 & 596/Mum/2025 Warmth Windpower LLP likely had no positive profits in AY 2018-19, meaning no deduction could be allowed even on computation grounds. This further justifies the Revenue's disallowance. 38. In sum, what the assessee seeks is effectively a transferable tax holiday, which Parliament has consciously chosen not to provide (and indeed to curtail). Upholding such a claim would go against the grain of the law as it stands and open the door to potential abuse. The CIT(A)'s decision is consistent with both the letter and spirit of Section 80-1A. It protects the Revenue from an unsanctioned benefit of over 26 crore that the assessee was never intended to enjoy. a. We therefore humbly request the Hon'ble ITAT to affirm the CIT(A)'s order and dismiss all grounds of the assessee's appeal.” 27. We have heard the submissions of both parties and perused the documents available on record. The facts of the case reveal that the assessment was completed by disallowing the claim for deduction under Section 80IA(4)(iv), amounting to Rs.6,15,01,555/- for A.Y.2018–19 and Rs.9,76,30,261/- for A.Y. 2020–21. During the assessment proceedings, the Ld. AO concluded that only the person who establishes or forms the undertaking is eligible to claim the deduction. Consequently, the Ld. AO held that the transferor of an undertaking is not entitled to such deduction under any circumstance.In this context, the Ld. AO also took the view that the assessee had incorrectly computed depreciation. The assessee failed to claim depreciation on the windmill in its tax computation, thereby inflating the amount eligible for deduction. The Ld. DR, in support of the Ld. AO’s position, relied on the decision of the Hon’ble Supreme Court in Plastiblends India Ltd. vs. ACIT, Mumbai [398 ITR 568], wherein it was held that any deduction under Chapter VI-A must be claimed only after accounting for depreciation. However, 13 595 & 596/Mum/2025 Warmth Windpower LLP the Ld. CIT(A) rejected the Ld. AO’s observations as recorded in the assessment order. 28. The Ld. DR further argued that the deduction is available to the undertaking and not to the assessee per se. Conversely, the Ld. AO had taken the view that the deduction should be available to the assessee itself. Accordingly, the claim was denied. The Ld. CIT(A), however, accepted the principle that the deduction is available qua the undertaking, not qua the assessee, relying on the CBDT Circular dated 13/12/1963, F. No. 15/5/63-IT(A- 1) and various judicial precedents. The Ld. CIT(A) held that a transferee of an undertaking is eligible for deduction if the transfer has occurred through a slump sale. However, he noted that the assessee had failed to substantiate that the transaction between JAL and Vision Finstock LLP was a slump sale as defined under Section 50B of the Act. Nonetheless, JAL had issued a certificate (APB 42) confirming that the transfer was indeed a slump sale. This certificate was not challenged by the revenue authorities, nor was any contrary evidence presented. It was further observed that the transfer between the assessee and Vision Finstock LLP was in the nature of a gift, and the MSEDC had accepted the said transaction. The Ld. CIT(A) acknowledged that the transferee could be eligible for deduction, provided the transfer had occurred by way of a slump sale. Notably, the department has not filed an appeal before the ITAT challenging this specific finding of the Ld. CIT(A). Thus, the only issue requiring adjudication is whether the transfer between JAL and Vision Finstock LLP qualifies as a slump sale. On merits, it is submitted that the question of whether a transferee can claim deduction is now a settled legal position. Judicial precedents have recognized that the transaction between JAL and Vision Finstock LLP 14 595 & 596/Mum/2025 Warmth Windpower LLP constitutes a slump sale. The transferee has offered the amount to tax in its computation, and Form 3CEA was duly filed on the income tax portal, as reflected in APB-40. JAL’s certificate confirming the slump sale transaction and the offering of the transaction amount to tax is included as APB-42. The Ld. DR referred to a coordinate bench decision of the ITAT, Chennai Bench in Armstrong Knitting Mills Private Limited(supra). However, that case is factually distinguishable. There, the assessee had sold used windmills to a sister concern and leased them back, and it was held that the windmills were not newly established, disqualifying the deduction. In the present case, the facts are different. The Ld. CIT(A) accepted that deduction under Section 80IA is permissible if the transfer is by way of a slump sale, and the factual matrix supports the assessee’s claim. Accordingly, we find no merit in the order of the Ld. CIT(A), and hold that the assessee is eligible for deduction under Section 80IA(4) amounting to Rs.6,15,01,555. So, the appeal of the assessee in Ground no. 2(a) & 2(b) are allowed. 29. Furthermore, the Ld. CIT(A) disallowed the assessee’s depreciation claim of Rs.68,40,972/-. We find that this depreciation was correctly computed based on the written down value and was duly claimed in the tax computation. The asset was received by the assessee as a gift from Vision Finstock LLP. As per Section 43(1) of the Act, read with Explanation 2, in the case of an asset acquired by way of gift, the actual cost to the assessee shall be the cost to the previous owner, reduced by the depreciation actually allowed.Therefore, the assessee has rightly computed depreciation on the actual cost as per the depreciation schedule of Vision Finstock LLP for A.Y. 2017–18. Hence, the disallowance of depreciation of Rs.68,40,972 is unwarranted. 15 595 & 596/Mum/2025 Warmth Windpower LLP Accordingly, Ground no 2(c) raised by the assessee is allowed. 30. Since Ground No. 1 of the assessee's appeal is not pressed, Ground No. 3 is general in nature and Grounds No. 2(a), 2(b), and 2(c) are allowed. 31. The bench has noticed that the issues raised by the assessee in the above appeal is equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by the assessee. Hence, the bench feels that the decision taken by us in ITA No. 595/Mum/2025 for the AY2018-19 shall apply mutatis mutandis in the appeal bearing ITA No. 596/Mum/2025 for AY 2020-21 and followed accordingly. 32. In the result, the appeals of the assessee ITA No. 595 &596/Mum/2025 are allowed. Order pronounced in the open court on 09th day of April 2025. Sd/- sd/- (NARENDRA KUMAR BILLAIYA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 09/04/2025 Pavanan Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "