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TMI Blog2016 (3) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (2) that an assessee who is eligible to claim deduction u/s 80IA has the option to choose the initial/first year from which it may desire the claim of deduction for ten consecutive years, out of a slab of fifteen (or twenty) years, as prescribed under that Sub-Section. It is hereby clarified that once such initial assessment year has been opted for by the assessee, he shall be entitled to claim deduction u/s 801A for ten consecutive years beginning from the year in respect of which he has exercised such option subject to the fulfillment of conditions prescribed in the section. Hence, the term 'initial assessment year' would mean the first year opted for by the assessee for claiming deduction u/s 801A. However, the total number of years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the Tribunal was right in holding that the assessee has the option to choose the first/initial assessment year of claim for deduction under Section 80IA ? 2. Heard Mr.T.R.Senthilkumar, learned Standing Counsel for the Department. Mr.M.P.Senthilkumar, learned counsel takes notice for the respondent. 3. Even according to the learned Standing Counsel for the Department, this Court has consistently followed the decision in M/s.Velayudhaswamy Spinning Mills (340 ITR 477), despite the Honourable Supreme Court ordering notice. 4. Interestingly, on the basis of the decision in Velayudhaswamy Spinning Mills, the Central Board of Direct Taxes has issued Circular No.1/ 2016 dated 15.2.2016. It will be useful to extract the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . In the above Sub-Section, which prescribes the manner of determining the quantum of deduction, a reference has been made to the term initial assessment year . It has been represented that some Assessing Officers are interpreting the term initial assessment year as the year in which the eligible business/manufacturing activity had commenced and are considering such first year of commencement/operation etc. itself as the first year for granting deduction, ignoring the clear m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not be pursued to the extent it relates to interpreting initial assessment year as mentioned in Sub- Section (5) of that section for which the Standing V.RAMASUBRAMANIAN,J AND N.KIRUBAKARAN,J RS Counsel/DRs be suitably instructed. The above be brought to the notice of all Assessing Officers concerned. 5. Therefore, admittedly, questions of law 2 and 3 are also covered by the above circular. Hence, the appeal deserves to be dismissed. 6. Accordingly, the above tax case appeal is dismissed. No costs. 7. But, we cannot resist our temptation to record one more fact. If an issue is covered by the judgment of the High Court, it is always open to the Department to take it on appeal to the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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