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TMI Blog2010 (9) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The learned CIT(A) has erred in directing the AO to ignore all depreciation loss from windmill business prior to the asst. year 2000-01. 2. The ld. CIT(A) erred in not following the decision rendered by the A bench of the Chennai ITAT in ITA No.1125 to 1127/Mds/2009 dated 8-1-2010, wherein it is held by the ITAT that the unabsorbed depreciation loss prior to initial asst. year shall be notionally carried forward and taken into consideration for computation u/s 80IA. 3. The ld. CIT(A) has grossly erred in not following the jurisdictional ITAT Chennai decisions in the case of M/s VXL Systems vs. ACIT in ITA No.349/Mds/09 as well as in the case of ACIT vs. Sudan Spinning Mills Ltd in ITA Nos.1505 1507/Mds/2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e earlier years such unabsorbed depreciation were set off against income from other sources. In a nutshell, it was argued that set off of the unabsorbed depreciation could not be made and that assessee had a choice to opt for the initial assessment year as asst. year 2000-01. Ld. CIT(A) was appreciative of these contentions. According to him, the Tribunal in its decision in ITA Nos.1798 and 1799/Mds/02 dated 23-1-2008 in the case of Manoranjitham Thangamaligai Trust, G. Rajendran (HUF) and others, had held that the initial asst. year could be chosen by the assessee at its option, for computation of claim for deduction under sec. 80IA of the Act. Vis a vis the set off of notional unabsorbed depreciation of the earlier years, view of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent. of profits and gains derived from such business for ten consecutive assessment years. 80IA (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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial 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. From reading of sub-sec. (1), it is clear that it provides that where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-sec.(4) i.e. referred to as the eligible business, there shall, in accordance with and subject to the provisions of the section, be allowed, in computing the total incomer of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent assessment year. 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 asst. year and every subsequent asst. years. When the assessee exercises the option, the only losses of the years beginning from initial asst. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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