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TMI Blog2015 (10) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the assessee. It is only when the loss has been incurred in any year beginning from the initial assessment year, that the assessee has to adjust such loss in the subsequent assessment years and the profits have to be computed as if the eligible business is the only source of income and the deduction u/s. 80-IA is to be determined accordingly. This is the true import of section 80-IA(5). Therefore the losses of assessment year prior to the A.Y. 2008-09 which has already been set off against income of non-eligible unit could not be notionally carried forward in accordance with section 80IA for setting off against the income of eligible unit for the assessment years 2008-09 & 2009-10 under consideration. Thus we do not find any merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions have been heard and record perused. From the record we found that in A.Y. 2008-09 the assessee's claim for deduction u/s 80IA amounting to ₹ 38,30,569/- was allowed in respect of Wind Farm Division while framing assessment u/s 143(3) of the Act. Thereafter, the CIT initiated action u/s 263 of the Act wherein A.O. was directed to examine the assessee's claim of eligibility for deduction u/s 80IA(5) of the Act after reducing losses in the form of unabsorbed depreciation which have already been set off in earlier years against profit of ineligible units of assessee. 5. In A.Y. 2009-10, the A.O. held that after set off of brought forward losses and depreciation in accordance with section 80IA(5), the eligible deduction wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een years beginning from the year in which the unit generates power. Exercising option granted u/s 80IA(2), the assessee chose to claim deduction u/s 80IA from AY 2008-09. Once the option is exercised, the wind mill unit will be treated as if it is only source of income from year of exercise of option. Hence there does not arise any question of notionally bringing forward losses from earlier assessment year from of putting up of wind mill which has already been set off against business income. In support of the proposition that loss from the eligible business in the year prior to the initial assessment year absorbed against the profits of other business need not be notionally brought forward and has no effect on the deduction claimed, relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the enterprise develops and begins to operate for claiming the deduction. As per sub-so (5) of S. 80-IA, the quantum of deduction under S. 80-IA for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year is to be computed as if the eligible business is the only source of income. Since the assessee has exercised the option of choosing the asst. yr. 2008-09 as initial assessment year as per sub-section (2) of S. 80-IA, only the losses of the years starting from that initial assessment year alone are to be brought forward as stipulated in S. 80-IA(5). Loss prior to the initial assessment year which has already been set off cannot be brought forward and adjusted in the initial assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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