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TMI Blog2015 (1) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... waminathan For the Respondent : Mr. R. Sivaraman JUDGMENT (Judgment of the Court was delivered by R. Sudhakar,J.) The above Tax Case (Appeals) are filed by the Revenue as against the order of the Income Tax Appellate Tribunal. In all the above Tax Case (Appeals), the issue raised by the Revenue is identical. Hence, all the above appeals are taken up together and common order is passed. 2. The core issue raised in all the above Tax Case (Appeals) is whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the respondent/assessee in each appeal is entitled to claim deduction under section 80-IA of the Income Tax Act. 3. Learned counsel appearing for the assessee submitted that the issue involved in these appeals have already been decided by this Court in the decision reported in (2012) 340 ITR 477 (Velayudhaswamy Spinning Mills V. Asst. CIT) and hence the same may be followed in these cases also. 4. It is stated by the learned Standing Counsel appearing for the Revenue that as against the decision rendered by this Court in the case of Velayudhaswamy Spinning Mills V. Asst. CIT reported in (2012) 340 ITR 477, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be taken into consideration once they have been set off from other sources of income earlier. In the present case, we are concerned with the provision of section 80-IA. The said provision was introduced by the Finance Act, 1999, with effect from April 1, 2000. The provisions of sections 80-I and 80-IA are also more or less identically worded. Sections 80-I and 80-IA come in Chapter VI-A of the Income-tax Act. Chapter VI-A deals with deductions to be made in computing total income. There are two tax incentives contemplated in Chapter VI-A. One is investment incentive and the other one is profit-linked investment. Chapter VI-A was introduced by the Finance Act, 1965, with effect from April 1, 1965, and it consists of four headings. They are A, B, C and D. Heading A is general and it also contains definition. It consists of sections 80A, 80AA, 80AB, 80AC and 80B. Section 80AB deals with Deductions to be made with reference to the income included in the gross total income , which reads as follows : Where any deduction is required to be made or allowed under any section included in this Chapter under the heading 'C-Deductions in respect of certain incomes' in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80-IA provides for manner of computation of profits of an eligible business. Accordingly such profits are to be computed as if such eligible business is the only source of income of the assessee. Section 80-IA reads as follows : 80-IA. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business) there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of an amount equal to hundred per cent. of the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or develops a special economic zone referred to in clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to choose 10 consecutive assessment years out of 15 years. Option has to be exercised, if it is not exercised, the assessee will not be getting the benefit. Fifteen years is outer limit and the same is beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure activity, etc. Sub-section (5) deals with quantum of deduction for an eligible business. The words initial assessment year are used in sub-section (5) and the same is not defined under the provisions. It is to be noted that initial assessment year employed in sub-section (5) is different from the words beginning from the year referred to in sub-section (2). The important factors are to be noted in sub-section (5) and they are as under : (1) It starts with a non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored ; (2) It is for the purpose of determining the quantum of deduction ; (3) For the assessment year immediately succeeding the initial assessment year ; (4) It is a deeming provision ; (5) Fiction created that the eligible business is the only source of income ; and (6) Durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR) : Having considered the rival contentions which follow on the line noticed above, we are of the opinion that on finding the fact that there was no carry forward losses of 1983-84, which could be set off against the income of the current assessment year 1984-85, the recomputation of income from the new industrial undertaking by setting off the carry forward of unabsorbed depreciation or depreciation allowance from previous year did not simply arise and on the finding of fact noticed by the Commissioner of Income-tax (Appeals), which has not been disturbed by the Tribunal and challenged before us, there was no error much less any error apparent on the face of the record which could be rectified. That question would have been germane only if there would have been carry forward of unabsorbed depreciation and unabsorbed development rebate or any other unabsorbed losses of the previous year arising out of the priority industry and whether it was required to be set off against the income of the current year. It is not at all required that losses or other deductions which have already been set off against the income of the previous year should be reopened again for computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness cannot be notionally brought forward and set off against the profits of the eligible business as no such mandate is provided in section 80-IA(5). Under these circumstances, we set aside the order of the Tribunal and answer all the questions in favour of the appellant/assessee and against the Revenue in Tax Case Nos. 909 and 940 of 2009 respectively. Accordingly, tax cases are allowed. 8. It is relevant to note that as against the above-said decision rendered by this Court, the Revenue has filed appeals before the Supreme Court, which are stated to be pending, in which, only notice was ordered and were not yet admitted by the Supreme Court. 9. The facts in the present batch of cases 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 each of the appeal falls within the parameters of Section 80IA of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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