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TMI Blog2013 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... as per section 80-IA, is allowable for set off against income under other heads. 3. The Commissioner of Income-tax (Appeals) has failed to appreciate that the windmill business falls under category of eligible business as per section 80-IA and also that section 80-IA has overriding effect on any other provisions under the Act including sections 70 and 71. 4. The decision of the High Court of Karnataka, Circuit Bench Dharwad, in the case of CIT v. Swarnagiri Wire Insulations P. Ltd. [2012] 349 ITR 245 (Karn) in I. T. A. No. 5050 of 2010 has been accepted by the Department merely on the ground of monetary ceilings fixed by the Central Board of Direct Taxes for filing special leave petition." The assessee is an individual. Among other busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of income to the assessee in all the relevant years of claim commencing from the initial assessment year. On a broad reading of the Act, it may appear that the carried-forward loss of the eligible business were required to be set off first against the income of the subsequent years of eligible business while determining the profits eligible for deduction under section 80-IA of the Act and set off of losses from other sources under the same head is not permissible. However, it should not be forgotten that section 80-IA of the Act is a beneficial section permitting certain deductions in respect of certain income under Chapter VI-A of the Act. A provision granting incentive for promotion of economic growth and development in taxing statutes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicability of section 80-IA." We find that the facts and the issue considered by the Tribunal in the case of Swarnagiri Wire Insulations P. Ltd. are identical and with reference to the issue in the instant case. The Tribunal order cited supra has been affirmed by the hon'ble jurisdictional High Court in CIT v. Swarnagiri Wire Insulations P. Ltd. [2012] 349 ITR 245 (Karn), I. T. A. No. 5050 of 2010 dated May 27, 2011. The hon'ble jurisdictional High Court has followed the judgment of the hon'ble Supreme Court in the case of Synco Industries Ltd. v. Assessing Officer (Income-tax) reported in [2008] 299 ITR 444 (SC). The relevant finding of the jurisdictional High Court is reproduced below (page 248 of 349 ITR) : "The Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n section 80-I(1) are very important which indicate that the gross total income of an assessee shall include profits from a priority undertaking. While computing the quantum of deduction under section 80-I(6), the Assessing Officer, no doubt, has to treat the profits derived from an industrial undertaking as the only source of income in order to arrive at the deductions under Chapter VI-A. However, this court finds that the non obstante clause appearing in section 80-I(6) of the Act, is applicable only to the quantum of deduction, whereas, the gross total income under section 80B(5) which is also referred to in section 80-I(1) is required to be computed in the manner provided under the Act which presupposes that the gross total income shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjusted before determining the gross total income and as the gross total income was 'nil' the assessee was not entitled to claim deduction under Chapter VI-A which includes section 80-I also.' 6. In view of the law laid down by the apex court as aforesaid, there is no error in the order passed by the Tribunal. As such, no case for interference is made out. Accordingly, the substantial question of law as framed is answered against the Revenue and in favour of the assessee." Since the issue in the instant case is directly covered by the judgment of the hon'ble jurisdictional High Court cited supra, we are of the view that the order of the first appellate authority directing the Assessing Officer to set off loss from windmill business agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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