IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.1.2015 CORAM HON'BLE MR.JUSTICE R.SUDHAKAR AND HON'BLE MR.JUSTICE R.KARUPPIAH T.C.(A).Nos.1310 and 1331 of 2007 Tamilnadu Chlorates Ltd. 17A, Vallabai Road Madurai 625 002. Appellant in TC.1310/2007 Pandian Chemicals Ltd. 17A, Vallabai Road Madurai 625 002. Appellant in TC.1331/2007 Vs. Commissioner of Income Tax Madurai. Respondent in both appeals PRAYER: Appeals under Section 260A of Income Tax Act, 1961 against orders of Income Tax Appellate Tribunal 'C' Bench, Chennai, dated 17.10.2005 made in I.T.A.No.2183/Mds/2003 and dated 5.10.2005 made in I.T.A.No.2163/Mds/2003 for assessment year 1999-2000. For Appellant : No appearance For Respondent : Mr.M.Swaminathan Standing Counsel (2) JUDGMENT (Delivered by R.SUDHAKAR, J.) assessees have filed these appeals challenging orders of Income Tax Appellate Tribunal 'C' Bench, Chennai, dated 17.10.2005 made in I.T.A.No.2183/Mds/2003 and dated 5.10.2005 made in I.T.A.No.2163/ Mds/2003 for assessment year 1999-2000. 2. appellant in T.C.(A) No.1310 of 2007 is sister concern of appellant in T.C.(A) No.1331 of 2007. T.C.(A) No.1310 of 2007 was admitted on following questions of law: (i) Whether Tribunal was right in holding that electricity generated with help of windmill by harnessing wind energy into electricity energy would not amount to production or manufacture and that electricity so produced was also not article or thing as referred in Sec.80HH? (ii) Whether Tribunal was right in rejecting appellant's claim based on decision of Supreme Court in M.P. Electricity Board (XXV STC 1888) that electricity produced by windmill was goods by relying on decision of Ferens Vs. O'Brien (11QBD)? (iii)Whether Tribunal was right in its conclusion that assessee did not employ any employee merely because appellant shared expenses on salary in windmill unit with its parent company i.e., M/s.Pandian Chemicals Ltd. and hence not eligible to claim deduction under Sec.80HH? (3) (iv)Whether Tribunal was right in holding that action of Assessing Officer in setting off carry forward depreciation against current profits in determining available profits of windmill division u/s 80HH is covered by decision of Supreme Court in Motilal Pesticides (I) Ltd. v. CIT (243 ITR 26)? T.C.(A) No.1331 of 2007 was admitted on following questions of law: (a) Whether Tribunal was right in holding that electricity generated with help of windmill by harnessing wind energy into electricity energy would not amount to production or manufacture and that electricity so produced was also not article or thing as referred in Sec.80HH? (b) Whether Tribunal was right in rejecting appellant's claim based on decision of Supreme Court in M.P. Electricity Board (XXV STC 1888) that electricity produced by windmill was goods by relying on decision of Ferens Vs. O'Brien (11QBD)? (c) Whether Tribunal was right in its conclusion that assessee did not employ any employee merely because appellant shared expenses on salary in windmill unit with its sister company i.e., M/s.Tamilnadu Chlorates Ltd. and hence not eligible to claim deduction under Sec.80HH? (d) Whether Tribunal was right in raising issue, on its own, as to whether business of generation of power was industrial undertaking , when no such issue was raised by either party, and in deciding issue impliedly against assessee? (e) Whether Tribunal was right in holding that action (4) of Assessing Officer in setting off carry forward depreciation against current profits in determining available profits of windmill division u/s 80HH is covered by decision of Supreme Court in Motilal Pesticides (I) Ltd. v. CIT (243 ITR 26)? 3. In orders under challenge passed by Tribunal, it followed earlier order dated 6.9.2005 passed in I.T.A.No.307/Mds/2000 in case of assessee in T.C.(A) No.1310 of 2007. Concededly, said order dated 6.9.2005 passed in I.T.A.No.307/Mds/2000 by Tribunal was subject matter of challenge before this Court in T.C.(A) Nos.1360 of 2006 and batch cases and this Court, by judgment dated 23.7.2012, considered identical questions of law and remanded matter to Assessing Officer for reconsidering claim of deduction in light of provisions of Section 80IA of Income Tax Act. 4. It is stated that learned counsel for appellant has passed away. However, learned Standing Counsel for revenue fairly states that in light of decision of this Court dated 23.7.2012 in T.C.(A) Nos.1360 of 2006 and batch cases, these appeals many also be remanded to Assessing Officer for considering claim of deduction in light of provisions of Section 80IA of Act. In such view of matter, these appeals are allowed and orders passed by Tribunal are set aside. matter is remanded to (5) Assessing Officer for considering claim of deduction in light of provisions of Section 80IA of Act. No costs. (R.S.J.) (R.K.J.) 28.1.2015 Index : No Internet : Yes sasi To: 1. Assistant Registrar, Income Tax Appellate Tribunal Chennai Bench "C", Chennai. 2. Secretary, Central Board of Direct Taxes, New Delhi. 3. Commissioner of Income Tax (Appeals) - I Madurai. 4. Deputy Commissioner of Income Tax Company Circle I, Madurai. (6) R.SUDHAKAR,J. and R.KARUPPIAH,J. (sasi) T.C.(A).Nos.1310 and 1331 of 2007 28.1.2015 Tamilnadu Chlorates Ltd. v. Commissioner of Income-tax, Madurai