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TMI Blog2020 (10) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bench of Tribunal in the case of Goldmine Shares and Finance Pvt. Ltd. [ 2008 (4) TMI 405 - ITAT AHMEDABAD] was much prior to the CBDT Circular. - Decided against revenue. Prior period depreciation on investment in premises disallowed - CIT-A allowed deduction - HELD THAT:- Before the Ld. CIT(Appeals) itself, it had been demonstrated by the assessee that in the entire book depreciation it included depreciation on investment in premises for prior period and entire books of account, tax audit report were submitted and were analyzed by the First Appellate Authority - assessee at the time of hearing drew our attention to the Balance Sheet and P L account for the relevant assessment year wherein the entire depreciation and amortization expenses has been claimed And it included prior period deprecation on investment in premises. DR could not refute these facts on record nor could bring any material or evidences to show that the said amount was not included in the said total depreciation taken by the assessee company for taxation purpose. - Decided against revenue. - ITA No. 1758/PUN/2017 - - - Dated:- 1-10-2020 - SHRI R. S. SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. In this respect, the assessee submitted that the initial assessment year in the case of assessee was assessment year 2010-11 and not assessment year 2007-08 as interpreted by the Assessing Officer. The Ld. CIT(Appeals) on this issue has held as follows: 5.3 Decision: - I have perused the assessment order and the submission made by the appellant as above carefully. I find that the 'Initial Assessment Year' as prescribed u/s.80IA (5) has been decided in the CBDT Circular no.1/2016 dated 15/02/2016 wherein, it has been stated that the same would mean the first year opted for by the assessee for claiming deduction u/s 80IA and not the year in which the eligible business has commenced. Further, the CBDT has directed the Assessing Officers to allow deduction u/s 80IA in accordance with this clarification and also stated that pending litigation on allowability of deduction u/s 80IA shall not pursued to the extent it relates to interpreting 'Initial Assessment Year' as mentioned in section 80IA(5). I also find that various case laws cited by the appellant in the written submission dated 16/02/2017 have also decided and set right the issue of 'Initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haswamy Spinning Mills Pvt. Ltd. Vs. ACIT (supra). Therefore, the CIT(A) has not properly appreciated the said decision (supra). In the remand proceedings, CIT(A) is directed to consider the existing legal position on the issue under consideration and allow the claim of the assessee in accordance with law. Assessee shall be given reasonable opportunity of being heard to the assessee in accordance with the principles of natural justice. In the process, we find there is no reason for disallowing the claim of the assessee and the losses of the earlier assessment years prior to A.Y. 2010-11 are eligible for set off against the profits of the other income of the ineligible units of the earlier years. AO has grossly erred in disallowing the said set off of the said brought forward losses against the income earned from the windmills of the eligible units in the current year under consideration. Accordingly, Ground Nos. 1.1 to 1.4 raised by the assessee are allowed, in principle, subject to the above conditions. Therefore, in assessment year 2011-12 also, it was held that the initial assessment year for the purposes of section 80IA is the first year in which the assessee claimed dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also analyzed the judicial pronouncements placed before us. In this case, the deduction u/s.80IA of the Act has been claimed by the assessee and it was disallowed by the Assessing Officer holding that the initial assessment year is Assessment year 2007-08 which is the year relevant to the previous year in which the windmill commenced generation of power. The assessee on the other hand had submitted that they have not claimed any deduction u/s.80IA of the Act for the period of assessment years 2007-08 to 2009-10 and it was only for the first time for assessment year 2010-11 that they have chosen to claim deduction under the said provision of the Act. Therefore, the assessment year 2010-11 is the initial assessment year. We further find that the Pune Bench of the Tribunal in assessee own case for immediately preceding assessment year i.e. A.Y.2011-12, has allowed the deduction to the assessee by observing that the initial assessment year is the year in which the assessee has claimed first time the deduction u/s.80IA of the Act. 7.1 We also find that the CBDT Circular itself, gives preference to the assessee to choose a particular year as initial assessment year and in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts and the entire book depreciation of ₹ 5,30,66,886/- ( i.e. including the aforesaid depreciation on investment in premises for prior period) was added back and disallowed in the statement of total income. The appellant also furnished the copy of the audited annual accounts of the Company for the year ended 31/03/2012, Tax Audit Report regarding the disclosure of prior period expenses, copy of the statement of total income separately contending that the appellant Company had added back the entire book depreciation of ₹ 5,30,66,886/- (i.e. including the aforesaid Depreciation on investments in premises for prior period) in the Statement of total income. It was therefore, argued that no further disallowance was warranted and such an addition made by the AO was tantamount to double addition / disallowance. I find force in the contention of the appellant and as the said amount has already been added in Book Depreciation and disallowed by the appellant, no further disallowance was required. Therefore, the addition made on account of disallowance of Depreciation on investments in premises for prior period of ₹ 9,84,391/- is hereby deleted. Ground No.3 raised by t ..... 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