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TMI Blog2018 (1) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... unabsorbed depreciation or loss against the profits of the units and assessee is entitled to claim deduction under s. 80-IA on current assessment year on the current year profit. Accordingly, we allow the claim of the assessee Disallowance of additional depreciation claim by assessee of wind mill purchase during the year - Held that:- As decided in assessee'e own case for AY 2007-08 [2012 (2) TMI 640 - ITAT MUMBAI] wherein held For the application of s. 32(1)(iia) what is required to be satisfied is that the setting up of a new machinery or plant should have been acquired and installed after 31st March, 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing and there is no requirement that the setting up of a new machinery or plant should have any operational connectivity to the article or thing that was already being manufactured by the assessee - Revenue appeal dismissed. - ITA No. 3931/Mum/2016 - - - Dated:- 24-1-2018 - SRI MAHAVIR SINGH, JM AND SRI G. MANJUNATHA, AM For The Revenue : M.C. Omi Ningshen, DR For The Assessee : Nikhil Tiwari, Rajan Vora, AR ORDER PER MAHAVIR SINGH, JM: Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction for an eligible business. Section 80 - IA(S) of the Act has to be read along with section 80 - IA(2) of the Act. It is only when the appellant has made a claim for the said benefit of deduction u/s 801A in the returns filed, would he be entitled to the benefit for a period of ten consecutive assessment year. Before putting forth such a claim of benefit in the initial assessment year, all losses and depreciation that the appellant could claim must be set-off against the profits of the taxpayer from other business sources Such losses cannot be carried forward notionally to the initial assessment year. when the deduction u1s.801A is claimed. 22. As per the amended provisions of the above section. which came into operation w.e.f. 1 April 2000, the computation of deduction u/s 801A would start with the initial assessment year and the brought forward losses of earlier years which have already been set off against the profits from any other source, there is no need to carry forward the notional losses of the earlier years to the initial assessment It is only when the losses have been incurred from the initial assessment year. the assessee has to adjust loss in the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming deduction u/s 801A. the loss and depreciation claimed by the assessee in respect of eligible business is set off against the income of the assessee from other sources, the said loss or depreciation cannot again be nationally set off against the profits of eligible business for computing deduction.' 26. Apart from that the CBDT. New Delhi vide circular no. 1/2016 dated 15th February, 2016 has issued necessary clarification of the term initial assessment year in section 801A(5) of the I T Act. Vide this circular. it has directed the AOs to allow deduction u/s 801A in giving options to the assessee to claim deduction for 10 consecutive years out of 15 years and to treat initial assessment year' means the first assessment year opted by the assessee to claim sec. SOIA benefits It is also directed the Revenue Authorities that pending litigations on allowability of deduction u/s 80IA shall also not be pursued to the extent it relates to interpreting initial assessment year as mentioned in sub section (5) of that section 27 it is also observed that in the appellants own case for A Y. 2009-10 in ITA no 6266/Mum/2012 vide order dated 16.01.2015, the Hon ble Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income from the year in which the assessee started claiming deduction under s. 80-IA. At the cost of repetition, we make it clear that the case laws relied on by the Departmental Representative are delivered before the amendment to section by Finance Act, 1999. Before the amendment, the initial assessment year was defined in the Act but after the amendment there is no definition for initial assessment year in the Act and there is option to the assessee in selecting the year of claiming relief under s. 80-IA. In view of this, we are of the opinion that there is no question of setting off notionally carried forward unabsorbed depreciation or loss against the profits of the units and assessee is entitled to claim deduction under s. 80-IA on current assessment year on the current year profit. Accordingly, we allow the claim of the assessee. By following the above said decision, the Ld CIT(A) held that the provisions of sec. 80IA(5) treating the undertaking as a separate source of income cannot be applied to a year prior to the year in which the assessee opted to claim relief u/s 80IA for the first time. Accordingly the Ld CIT(A) held that the losses of earlier years cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the claim of the assessee by observing in Para 36 and 37 as under: - 36. I have carefully considered the above submissions of the appellant and the findings of the Assessing Officer. It is observed that in the appellant s own case for Ay 2007-08 ITA no 5791/Mum/2010 vide order dated 22.022012. the Hon ble Tribunal has allowed additional depreciation on wind mills purchased during the year treating electricity as an article or a thing in the following words- 8 The Assessing Officer, in his order, has recorded that the assossee is in the business of manufacture and trading of woolen carpets. The Hon tie Madras High in Texmo Precision Casting (supra), considered the identical situation and held as follows:- For the application of s. 32(1)(i a) what is required to be satisfied is that the setting up of a new machinery or plant should have been acquired arid installed after 31 march 2002 by an assessee. who was already engaged in the business of manufacture or production of any article or thing and there is no requirement that the setting of a new machinery or plant should have any operational connectivity to the article or thing that was already being manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X
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