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Issues involved: The judgment deals with the deduction under sec. 80IA of the Income-tax Act, 1961, specifically focusing on the initial assessment year and the set off of earlier year notional depreciation and business loss.
Comprehensive Details: 1. Initial Assessment Year: The assessees claimed deduction under sec. 80IA based on the initial assessment year being considered as 2000-01. The AO refused the deduction citing that the windmill business started before 2000-01, and there were notional unabsorbed depreciation to be set off against the income. The CIT(A) allowed the claim, stating that the assessee had the option to choose the initial assessment year and notional set off could not be forced upon. The Tribunal upheld this decision, citing the High Court's ruling in a similar case. 2. Set Off of Notional Unabsorbed Depreciation: The Tribunal examined the provisions of sec. 80IA and emphasized that the deduction is for eligible businesses and the option must be exercised by the assessee. The Tribunal highlighted that the provision overrides other sections, and losses from earlier years already set off cannot be brought forward notionally. The Tribunal referred to the High Court's decision, which supported the assessee's eligibility for the deduction under sec. 80IA and rejected the Revenue's appeal. 3. Judicial Precedents: The Tribunal relied on previous decisions, including a coordinate Bench ruling and the High Court's judgment, to support the assessee's position regarding the initial assessment year and the set off of notional unabsorbed depreciation. The Tribunal concluded that the assessees were eligible for the deduction under sec. 80IA, and hence, dismissed the appeals of the Revenue. In conclusion, the Tribunal upheld the CIT(A)'s decision, emphasizing the assessee's right to choose the initial assessment year and rejecting the notion of bringing forward notional set offs from earlier years. The judgment highlighted the importance of exercising the option under sec. 80IA and the limitations on reworking set off amounts notionally.
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