ITA No.654/Ahd/2025 DCIT Vs. Inox Wind Energy Limited Assessment Year 2015-16

Parties Involved

Facts Summary

The assessee, Inox Wind Energy Limited, is a company engaged in the generation and sale of wind energy. For the Assessment Year 2015-16, the assessee filed its return on 30.11.2015, declaring Nil income (loss of Rs. 13,94,95,365). The case was selected for scrutiny under CASS. The Assessing Officer issued notices under sections 143(2) and 142(1) on multiple occasions. The Assessing Officer made two principal disallowances: (1) A disallowance of Rs. 5,32,41,825/- under section 14A of the Act applying the formula prescribed under Rule 8D of the Income-tax Rules, 1962, and (2) A disallowance of Rs. 36,24,015/- on account of depreciation on certain assets acquired in a slump sale transaction. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals)-11, Ahmedabad, which deleted the disallowances. The Revenue is in appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 5,32,41,825/- made under section 14A read with Rule 8D under the normal provisions, holding that the disallowance under section 14A read with Rule 8D cannot exceed the exempt income, in the absence of any such restriction being there in the relevant section or rule.
• 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the adjustment made on account of disallowance of Rs. 5,32,41,825/- under section 14A in computation of book profit under section 115JB of the Act, holding that the said addition under section 14A has been deleted under the normal provision.
• 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the disallowance of depreciation of Rs. 36,24,015 without appreciating the findings of the AO that the slump purchase price, being the composite price for bundle of rights / assets, cannot be apportioned amongst individual assets for the purpose of depreciation.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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