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2017 (12) TMI 294 - AT - Income TaxDeduction u/s 80IA - year of claim as initial assessment year - Held that - CIT(A) after appreciating the facts had relied upon the judgment passed by Hon ble Madras High Court in the case of Velayudhaswamy Spg. Mills (P.) Ltd. v. Asstt. CIT 2010 (3) TMI 860 - Madras High Court wherein it has been clearly held that where the depreciation and loss of earlier assessment years have already been set off against other business income of those assessment years, there is no need for notionally carrying forward and setting off the same depreciation and loss in computing the quantum of deduction available under section 80-IA. The Court has held further that the year of commencement alone need not be the initial year . The year of claim also can be considered as initial assessment year . The said judgment has also been followed by different benches of the Hon ble ITAT. Apart from above, Ld. AR has also drawn our attention to paper book page no. 4 which relates to Circular nO. 1/2016 issued by CBDT dated 15.02.16 wherein it has been clearly held that the term initial assessment year would mean the first year opted for by the assessee for claiming deduction u/s 80IA. We have also . . noticed that in the above circular, a direction has been given to the AO to allow deduction u/s 80IA and pending litigation on allowability of deduction u/s 80-IA shall also not be pursued to the extent it relates to interpreting initial assessment year as mentioned in sub section (5) of that section. - Decided against revenue.
Issues Involved:
- Allowance of deduction under section 80IA - Interpretation of "initial assessment year" for claiming deduction u/s 80IA - Applicability of judgments in similar cases Issue 1: Allowance of deduction under section 80IA The appellant revenue challenged the order of the Commissioner of Income Tax (Appeals) allowing deduction under section 80IA to the assessee. The assessee had set up a windmill and claimed deduction under section 80IA. The Assessing Officer (AO) disallowed the deduction by applying the provisions of section 80IA(v), calculating the profits from the year the windmill was set up. The Commissioner (Appeals) allowed the appeal of the assessee. The Tribunal noted the reliance of the AO on a tribunal decision but upheld the Commissioner's order based on a Madras High Court judgment and ITAT decisions. The Tribunal found that the Commissioner's decision was well reasoned, considering the facts and legal precedents, and dismissed the grounds raised by the revenue. Issue 2: Interpretation of "initial assessment year" for claiming deduction u/s 80IA The crux of the issue revolved around the interpretation of the term "initial assessment year" for claiming deduction under section 80IA. The Commissioner relied on a Madras High Court judgment stating that the year of claim could be considered as the initial assessment year. The Tribunal also referred to a CBDT Circular clarifying the term "initial assessment year" as the first year opted by the assessee for claiming the deduction. The Tribunal held that the Commissioner's interpretation was in line with legal principles and circular guidelines, and no new facts were presented to challenge this interpretation. Consequently, the Tribunal upheld the Commissioner's decision on this issue. Issue 3: Applicability of judgments in similar cases The Tribunal considered various judgments, including those of the Madras High Court and ITAT, in similar cases related to deduction under section 80IA. The Tribunal noted that the Commissioner had correctly applied the legal principles established in these judgments to the present case. The Tribunal also highlighted a jurisdictional bench's decision regarding the claim of deduction under section 80IA, emphasizing that the claim was based on a valid legal view. Since no new facts or contradictory judgments were presented, the Tribunal found no reason to deviate from the Commissioner's findings. As a result, the Tribunal dismissed the grounds raised by the revenue, emphasizing the consistency in legal interpretation and application across relevant cases. This comprehensive analysis of the judgment addresses the issues involved, the arguments presented by the parties, the legal principles applied, and the Tribunal's final decision based on the facts and legal precedents.
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