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TMI Blog2015 (6) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... rring the provisions of section 80IA of the Act, held that if the loss in the earlier years to the initial assessment year has already been absorbed, then it cannot be notionally brought forward and set off against the profits of the eligible business. This view has been reiterated again by the Hon'ble Karnataka High Court in the case of CIT & DCIT vs. Anil H. Lad [2014 (3) TMI 808 - KARNATAKA HIGH COURT]. Thus choosing of initial assessment year for the purpose of claiming deduction for the period of 10 years out of 15 years is with the assessee and secondly, before claiming deduction u/s 80IA of the Act, the loss on depreciation claimed by the assessee in respect of eligible business is to be set off against the income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion relatable to such business is to be taken into consideration while computing deduction U/S.80IA. 2. Brief facts of the case are that the assessee company is engaged in the business of manufacturing and trading of various electrical and consumer appliances. It has set up a Wind Mill division and installed Wind Mills at Vankusawade, Village Sitara Dist, Maharashtra. The said Wind Mill was commissioned in September, 1999. In revised return of income, the assessee has claimed deduction of ₹ 1,45,86,123/- u/s 80- IA (4) for the A.Y. 2006-07. The assessee in its note filed along with the computation of revised return of income, stated that the assessment year 2005-06 was chosen by the assessee as a first year for claiming the deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005-06 as initial assessment year for claiming deduction u/s 80IA of the Act on the ground that the year of the operation of the unit was A.Y. 2000-01. After discussing the provisions of sub-section (5) of section 80IA of the Act, he held that unabsorbed depreciation of eligible business cannot be ignored and the amount of unabsorbed depreciation of ₹ 4,47,29,590/- has to be set off against the profit of the Wind Mill Unit and still available to the assessee in the book before computing the income. Accordingly, he disallowed the claim of deduction of ₹ 1,45,86,123/- u/s 80IA of the Act. 4. Before the ld. CIT(A), the assessee strongly relied upon the decision of Hon'ble Madras High Court in the case of Velayudhaswamy Spi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lad vs. DCIT [2012] 13 ITR(Trib) 581 (Bang) dated 7 January 2011. 4. Relevant extracts of the decision of the Pune Tribunal in the case of Malpani Tea Corporation vs. DCIT (ITA No 912/PN/2011) dated 31 December 2012 . 5. Copy of the decision of the Pune Tribunal in the case of Chordia Food Products Ltd vs ACIT (ITA No 478/PN/11) dated 26 June 2012 (Pune Tribunal) 6. Copy of the decision of the Pune Tribunal in the case of Serum International Ltd vs. Addl CIT (ITA No. 290 to 292/PN/2010) dated 28 September 2011. 7. Copy of the decision of the Mumbai Tribunal in the case of Indian Gratings Pvt. Ltd vs. DC IT (ITA No. 4311/Mum/2013) dated 11 February 2015 8. Copy of the decision of the Mumbai Tribunal in the case of Shevie Expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80IA, which has been substituted w.e.f. Ist April 2000, provides that where the gross total income of an assessee includes any profits and gains derived by an undertaking from any eligible business referred to in sub-section 4, there shall, in accordance with and subject to the of this section, be allowed in computing the total income, the deduction of an amount equal to 100 percent of the profits and gains derived from such business for 10 consecutive years. Substituted sub-section (2) of section 80IA, provides that an option is given to the assessee for claiming any 10 consecutive assessment year out of 15 years beginning from the year in which the undertaking or the enterprise develops and begin to operate. The 15 years is the outer l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It nowhere defines as to what Is the initial assessment year. Prior to Ist April 2000, the Initial assessment year was defined for various types of eligible assessees under section 80IA(12). However, after the amendment brought in statute by the Finance Act, 1999, the definition of initial assessment year has been specifically taken away. Now, when the assessee exercises the option of choosing the initial assessment year as culled out in sub-section (2) of section 80IA from which it chooses its 10 years of deduction out of 15 years, then only the losses of the years starting from the Initial assessment year alone are to be brought forward as stipulated In section 80IA(5). The loss prior to the initial assessment year which has already be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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