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13-05-2019, Parry Engineering, Section 80IA(4)(iv), Tribunal Ahmedabad

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1 week 4 days ago #9426 by amit
Section - 80IA(4)(iv), 80AB
Order Date - 13-05-2019
Favouring - Assessee
Court - Tribunal Ahmedabad
Appellant - ITO
Respondent - Parry Engineering & Electronics
Citation - 519Taxpundit189
Appeal No. - ITA No.1140/Ahd/2017
Asstt. Year - 2013-14



Revenue is in appeal before the Tribunal against order of ld.CIT(A)-9, Ahmedabad dated 2.3.2017 passed for the Asstt.Year 2013-14.

2. Sole grievance of the Revenue in this appeal is that the ld.CIT(A) has erred in deleting addition of Rs.66,79,702/- made on account of disallowance of deduction under section 80IA(4)(iv) of the Act.

3. Brief facts of the case are that the assessee company is engaged in manufacturing of steel windows, channels, tees etc. and trading in iron and steel material. It is also operating wind-mill for power generation. It has filed its return of income on 30.9.2013 declaring total income of Rs.4,68,723/- after claiming deduction of Rs.66,79,702/- under section 80IA(4) of the Act. The case of the assessee was selected for scrutiny assessment. AO noticed that assessee has claimed heavy depreication on the windmill, and because that it has made losses from the undertaking, and therefore, it could not claim any deduction under section 80IA(4) of the Act. From the details submitted, it was noticed by the AO that assessee has unabsorbed depreicaiton and brought forward losses from the windmill during the first three years of its operation, which was sought to be set off against the profit of other business. This claim of the assessee was rejected by the AO on the ground that as per the provisions of secion 80IA(4) such losses/unabsorbed depreciaon can be allowed only agisnt eligible business income. In other words, losses/unabsorbed depreciation can be set off against the income generated from wind-mill only. The ld.AO, accordingly, disallowed the claim of the assessee and added the same to the income of the assessee. Aggrieved by the action of the AO, the assessee went in appeal before the ld.CIT(A), who after considering the issue in detail and following the decision of his predecessor taken on similar issue in the Asstt.Year 2011-12, deleted the disallowance. Thus, Revenue is before the Tribunal against this deletion by the CIT(A).

4. Before us, both the parties supported the orders of respective authorities. The ld.counsel for the assessee further submitted that in the Asstt.Year 2010-11 and 2011-12 similar issue was agitated by the Revenue before the Tribunal. The Tribunal in ITA No.1033 & 1034/Ahd/2015 vide order dated 6.6.2018 concurred with the finding of the ld.CIT(A) in these assessment years and upheld the order. Therefore, in this year also, issue being on similar set of facts, order of the ld.CIT(A) may be confirmed and the appeal of the Revenue be dismissed.

5. We have considered rival submisosns and gone through the record carefully. We find that the issue on hand, is similar to the issue raised in the Asstt.Year 2010-11 and 2011-12, wherein appeal of the Revenue challenging orders of CIT(A) in deleting identical additions made were confirmed by the Tribunal. We would take note of the discussion and finding of the Tribunal in ITA No.1033 and 1034/Ahd/2015 vide order dated 6.6.2018 for the convenience of adjudication of the issue on hand. It reads as under:

“8. The dispute between the assessee and Assessing Officer is thatAssessing Officer has notionally brought forward business losses and depreciation of earlier years and notionally set off against the income of the windmill. The case of the assessee is that as per Section 80IA(5) if the deprecation and business losses have already been set off against other income of the assessee before selection of initial year for claiming of deduction u/s.80IA(iv) then such unabsorbed depreciation would not be brought forward notionally and set off against the current year income in which deduction u/s. 80IA(iv) has been claimed. The Ld.
Assessing Officer did not accept this contention of the assessee. However, on appeal Ld. First appellate Authority has accepted the claim and allowed the deduction. The findings recorded by Ld. CIT(A) in A.Y. 2010-11 on this issue, read as under:

“4.2 I have carefully considered the rival submissions. I have also gone through the legal decisions relied upon by the appellant and A.O. First of all it is clarified that the deduction claimed by the appellant in respect of its windmill unit u/s. 80IA(iv) is of Rs.41,97,875/- and not of Rs.43,58,443/- as disallowed by the A.O. The amount disallowed by the A.O. also consists of the deduction u/s. 80G of the Act of Rs.1,60,568/-. From the perusal of the assessment order it is seen that there is no discussion and finding of the A.O in respect of the disallowance of deduction u/s. 80G of the Act. Hence, disallowance to the extent of Rs.1,60,568/- is directed to be deleted since factually incorrect.

In respect of deduction of Rs. 41,97,875/- u/s. 80IA(iv) of the Act, the A.O has disallowed the same in view of the provisions of Sec.80IA(5) of the Act, which reads as under:-

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