2015 (4) TMI 678

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..... the provisions of the Act and other provisions are to be ignored. In the absence of non obstante clause, what the judgment of the Madras Court in Velayudhaswamy Spinning Mills P. Ltd. [2010 (3) TMI 860 - Madras High Court] states is the legal position, because of the non obstante clause, the set off amount against other income of the assessee has to be ignored and because of the fiction created in the sub-section notionally, the set losses is to be treated as "losses being carried forward and after deducting the said losses, the profit prior to business is to be calculated. Eligible business were the only source of income, during the previous year relevant to initial assessment year and every subsequent assessment years. When the asses .....

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..... (2008) 302 ITR (AT) 208. 3. The learned counsel for the assessee assailing the impugned order contended that after referring to the said Special Bench, the High Court of Madras in the case of Velayudhaswamy Spinning Mills (P.) Ltd. v. Asstt. CIT reported in 231 CTR Madras 368, it is held as under: Once the set off is taken place in earlier year against the other income of the assessee, the Revenue cannot rework the set off amount and bring it notionally. Fiction created in sub-section does not contemplates to bring set off amount notionally. Fiction is created only for the limited purpose and the same cannot be extended beyond the purpose for which it is created. . 4. Therefore, the substantial question of law that arises for our .....

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..... n (5) means it over-rides all the provisions of the Act and other provisions are to be ignored. In the absence of non obstante clause, what the judgment of the Madras Court states is the legal position, because of the non obstante clause, the set off amount against other income of the assessee has to be ignored and because of the fiction created in the sub-section notionally, the set losses is to be treated as losses being carried forward and after deducting the said losses, the profit prior to business is to be calculated, i.e., precisely what the Special Bench has stated and the relevant portion of the judgment reads as under: From the reading of the above, it is clear that the eligible business were the only source of income, durin .....

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