9911796707
TMI Blog2015 (9) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... ion claimed by the assessee. - Decided in favour of assessee. - ITA no.1602/Mum/2013 - - - Dated:- 28-8-2015 - SHRI JOGINDER SINGH AND SHRI ASHWANI TANEJA, JJ. For The Appellant Shri Madhur Agarwal (AR) For The Respondent Shri K.Ravi Kiran (DR) ORDER PER ASHWANI TANEJA, A.M. The present appeal has been filed by the Assessee against order dated 11.12.2012, passed by the Ld. Commissioner of Income Tax (Appeals) 17,Mumbai passed for the assessment year 2009-10. The assessee has raised following grounds of appeal:- 1.On the facts and in circumstances of the case, the learned Commissioner of Income Tax (Appeal) grossly erred in confirming disallowance of deduction u/s. 80IA of the Income Tax Act, 1961 of ₹ 71, 10,231/- claimed by the appellant. In doing so he erred in: a. Holding that according to the provisions of s. 80-IA(S) of the IT Act, 1961, the profit from the eligible business for the purpose of deduction under s. 80-IA of the Act has to be computed after deduction of the notional brought forward losses and depreciation of eligible business even though they have been allowed set off against other income in earlier years. b. Hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt unit, could be and should be, set off against the profit of taxable units and only the balance left, if any, could have been carried forward for set off in the impugned year. It was reiterated that the exempt unit did not claim any deduction in earlier years. The facts on record reveal that the losses of this exempt unit have already been actually set off against the profits in the earlier years. Therefore, nothing remained to be brought forward to the impugned year and therefore, the action of Ld. AO in notionally bringing the amount of losses as brought forward losses was contrary to law and facts. The Ld. Counsel relied upon following judgments in support of this issue:- (i) Velayudhaswamy Spinning Mills (P)Ltd. vs. ACIT 231 CTR 368(Mad) (ii) CIT vs. Anil H. Lad 102 DTR (kar) 0241 (iii) Shevie Exports vs. Jt. CIT ITA No.321/Mum/2012 4. On the other hand, Ld. DR relied upon the order of Ld. CIT(A) and also relied upon the judgment of ITAT Mumbai in the case of Pidilite Industries Ltd. vs. DCIT in ITA No.3355/Mum/2009 dated 10.06.2011 and submitted that the Ld. CIT(A) has rightly confirmed the action of AO by relying upon the judgment of Pidilite Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8OlA, 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 limit within which the assessee can choose the period of claiming the deduction. Sub-section (5) is a non-obstante clause which deals with the quantum of deduction for an eligible business. The relevant provisions of sub-section (5) of section 8OlA, reads as under:- (5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made. 10. From a plain reading of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Velayudhaswamy Spinning Mills Pvt. Ltd. (supra) after considering the Special Bench decision of the Tribunal in Goldmine Shares And Finance Pvt. Ltd. (supra) and relevant provisions of the Act i.e., pre amendment and post amendment have come to the same conclusion: From reading of the above, it is clear that the eligible business were the only source of income, during the previous year relevant to initial assessment year and every subsequent assessment years. When the assessee exercises the option, the only losses of the years beginning from initial assessment year alone are to be brought forward and no losses of earlier years which were already set off against the income of the assessee. Looking forward to a period of ten years from the initial assessment is contemplated. It does not allow the Revenue to look backward and find out if there is any loss of earlier years and bring forward notionally even though the same were set off against other income of the assessee and the set off against the current income of the eligible business. Once the set off is taken place in earlier year against the other income of the assessee, the Revenue cannot rework the set off amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the income of the previous year should be reopened again for computation of current income under s. 80-I for the purpose of computing admissible deductions thereunder. In view thereof, we are of the opinion that the Tribunal has not erred in holding that there was no rectification possible under s. 80-I in the present case, albeit, for reasons somewhat different from those which prevailed with the Tribunal. There being no carry forward of allowable deductions under the head depreciation or development rebate which needed to be absorbed against the income of the current year and, therefore, recomputation of income for the purpose of computing permissible deduction under s. 80-I for the new industrial undertaking was not required in the present case. Accordingly, this appeal fails and is hereby dismissed with no order as to costs. From reading of the above, the Rajasthan High Court held that 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 current income under s. 80-I for the purpose of computing admissible deductions thereunder. We also agree with the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y relied upon by the learned Departmental Representative in Hyderabad Chemical Supplies Ltd. (supra) will also not apply to the facts of the present case, as in that case, the wind mill started its operation on 31st March 1999 and the first year of operation was assessment year 1999 2000. Thus, in the assessment year 1999 2000, the definition of initial assessment year was already there in the Act and there was no provision through which the assessee could have chosen its initial assessment year. This provision was brought in statute w.e.f. 1st April 2000, by virtue of section 80IA. Thus, this decision also will not help the case of the Department. In assessee s case, as specifically stated in the foregoing paragraphs, the assessee s claim for initial assessment year i.e., assessment year 2008 09 and its claim for deduction under section 80IA made for the first time from assessment year 2008 09, has not been disputed. Thus, the aforesaid judgment relied upon by the learned Departmental Representative will not be applicable to the facts of the present case. Unquote: 6. This fact is not in dispute that business loss/depreciation of earlier years of the exempt unit have ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
