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2015 (7) TMI 367 - HC - Income TaxDeduction under section 80-IA of the Income Tax Act - Held that - The facts in the present case are also identical to the above-said decision of this Court that all the business undertakings are wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment years in question and for the subsequent years as well. Having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. In the decision reported in 2010 (3) TMI 860 - Madras High Court (Velayudhaswamy Spinning Mills V. Asst. CIT), there appears to be no distinction on facts. Again in Commissioner of Income Tax Versus M/s. Eastman Exports Global Clothing P. Ltd. 2015 (1) TMI 830 - MADRAS HIGH COURT , by order dated 12.1.2015, this Court, following the decision reported in 2010 (3) TMI 860 - Madras High Court (Velayudhaswamy Spinning Mills V. Asst. CIT) held in favour of the assessee and against the Revenue. - Decided against the revenue.
Issues Involved:
1. Entitlement to claim deduction under Section 80-IA of the Income Tax Act. 2. Applicability of previous judgments and pending appeals before the Supreme Court. Issue-wise Detailed Analysis: 1. Entitlement to claim deduction under Section 80-IA of the Income Tax Act: The core issue in this appeal is whether the respondent/assessee is entitled to claim deduction under Section 80-IA of the Income Tax Act. The Court referenced its decision in the case of Velayudhaswamy Spinning Mills V. Asst. CIT (2012) 340 ITR 477, which dealt with the benefits under Chapter VIA of the Income Tax Act. The Court relied on the Supreme Court decision in Liberty India V. CIT (2009) 317 ITR 218, which clarified that Chapter VI-A provides profit-linked incentives. It was held that once losses and other deductions have been set off against the income of previous years, they should not be reopened for the purpose of computing current year income under Section 80I or 80IA. The Court reiterated that the assessee should not be denied the admissible deduction under Section 80IA. 2. Applicability of previous judgments and pending appeals before the Supreme Court: The Court noted that the decision in Velayudhaswamy Spinning Mills V. Asst. CIT is pending appeal before the Supreme Court. However, the Supreme Court has only ordered notice and not admitted the appeals yet. The Court emphasized that the facts of the present case are identical to the Velayudhaswamy Spinning Mills case, where the business undertakings are windmills, and the assessee claimed the benefit of deduction under Section 80IA for the relevant and subsequent assessment years. The losses were already set off against other income, thus falling within the parameters of Section 80IA. The Court also referenced a batch of cases in T.C.(A)Nos.408 of 2012, where it followed the decision in Velayudhaswamy Spinning Mills and ruled in favor of the assessee. Consequently, the Court dismissed the present appeal, confirming the Tribunal's order and answering the questions of law against the Revenue and in favor of the assessee. Conclusion: The High Court dismissed the Tax Case (Appeal), confirming the Tribunal's order and ruling in favor of the assessee. The Court held that the assessee is entitled to claim deduction under Section 80-IA of the Income Tax Act, and previous losses set off against other income should not be reopened for current year computation. The pending appeals before the Supreme Court did not alter the Court's decision, as the facts were identical to the previously decided case of Velayudhaswamy Spinning Mills.
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