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TMI Blog2016 (5) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this Tax Case (Appeal) is whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the respondent/assessee is entitled to claim deduction under Section 80-IA of the Income Tax Act. 2. Though it is brought to the notice of this Court that the issue involved in this appeal has already been decided by this Court in the decision reported in Velayudhaswamy Spinning Mills Vs Asst. CIT [2012) 340 ITR 477], it is stated by the learned Standing Counsel appearing for the Revenue that as against the decision rendered by this Court in Velayudhaswamy Spinning Mills, the Revenue has preferred appeals before the Supreme Court and the same are pending. 3. Heard learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 4. In the decision reported in Velayudhaswamy Spinning Mills, this Court, while dealing with the benefit under Chapter VIA of the Income Tax Act, placed reliance on the decision reported in Liberty India Vs CIT [2009) 317 ITR 218 (SC)], wherein the Supreme Court considered the scope of Sections 80I, 80IA and 80IB of the Income Tax Act and held that Chapter VI-A provides for ince ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1965, with effect from April 1, 1965, and it consists of four headings. They are A, B, C and D. Heading A is general and it also contains definition. It consists of sections 80A, 80AA, 80AB, 80AC and 80B. Section 80AB deals with Deductions to be made with reference to the income included in the gross total income , which reads as follows : Where any deduction is required to be made or allowed under any section included in this Chapter under the heading 'C-Deductions in respect of certain incomes' in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. A mere reading of the above provision makes it clear that any income of the nature specified in that section, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal to hundred per cent. of the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or develops a special economic zone referred to in clause (iii) of sub-section (4) or generates power or commences transmission or distribution or power or undertakes substantial renovation and modernisation of the existing transmission or distribution lines. (4) This section applies to- (i) any enterprise carrying on the business of (i) developing, or (ii) operating and maintaining, or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely : (a) it is owned by a company registered in India or by a consortium of such companies (or by an authority or a board or a corporation or any other body established or constituted under any Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in sub-section (2). The important factors are to be noted in sub-section (5) and they are as under : (1) It starts with a non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored ; (2) It is for the purpose of determining the quantum of deduction ; (3) For the assessment year immediately succeeding the initial assessment year ; (4) It is a deeming provision ; (5) Fiction created that the eligible business is the only source of income ; and (6) During the previous year relevant to the initial assessment year and every subsequent assessment year. From a reading of the above, it is clear that the eligible business were the only source of income, during the previous year relevant to the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the face of the record which could be rectified. That question would have been germane only if there would have been carry forward of unabsorbed depreciation and unabsorbed development rebate or any other unabsorbed losses of the previous year arising out of the priority industry and whether it was required to be set off against the income of the current year. 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 section 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 section 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 section 80-I for the new industrial undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. The facts in the present case are also identical to the above-said decision of this Court. The assessee is an individual having income from salary, business and other sources and is generating power through windmills and has claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment year in question and for the subsequent years as well. Having exercised his option and his losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. There appears to be no distinction on facts in relation to the decision reported in Velayudhaswamy Spinning Mills. 8. Again in a batch of cases in T.C.(A) Nos.408 of 2012, etc., by order dated 12.1.2015, this Court, following the decision reported in Velayudhaswamy Spinning Mills, held in favour of the assessee and against the Revenue. 9. We, therefore, taking note of the decision rendered by this Court in Velayudhasamy Spinning Mills and in a batch of cases in T.C.(A) Nos.408 of 2012, etc. dated 12.1.2015, are inclined to dismiss this Tax Case (Appeal), and, thereby, confirm the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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