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TMI Blog2022 (4) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... er of years for claiming deduction should not transgress the prescribed slab of fifteen or twenty years, as the case may be and the period of claim should be availed in continuity. Thus the Assessing Officers are directed to allow deduction u/s 80IA in accordance with this clarification and Standing Counsels/D.R.s are suitably instructed pending litigation on allowability of deduction u/s 80 IA shall also not be pursued to the extent it relates to interpreting 'initial assessment year' as mentioned in subsection (5) of section 80IA of the Act. Set off of losses as per section 80IA(5) for computation of income of eligible unit - Following this Circular the SLP filed by the department was also dismissed against High Court's r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively, passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 250 of the Income Tax Act, 1961 (the Act) concerning AYs. 2006-07 2007-08. 2. The Ground of appeal raised by assessee for A.Y. 2006-07 reads as under: 1. The learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of AO in not allowing deduction u/s 80 IA on the income of ₹ 23,00,00,000/-. 3. The grounds of appeal raised by assessee for A.Y. 2007-08 read as under: 1. The learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of AO in not allowing deduction u/s 80IA on the income of ₹ 39,00,00,000. 2. The learned Commissioner of Income Tax (Appeals) erred in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribes 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 mandate provided under sub-section (2 ) which allows a choice to the assessee for deciding the year from which it desires to claim deduction out of the applicable slab of fifteen (or twenty) years. The matter has been examined by the Board. It is abundantly clear from sub-section (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r No.1/2016 issued by the CBDT has put to end all the issues following the judgement rendered by the High Court of Madras in the case of Velayuthasamy Spinning Mills. 5. We have given our thoughtful consideration on the materials placed before us the issue is now settled by the Circular No.1/2016 issued by the CBDT 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. The Circular further 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.80IA in favour of the assessee. 7. Next issue regarding disallowance of deduction of amount of ₹ 16,01,04,788/-from the book profits under s.115JB of the Act. The findings of the CIT(A) is as follows: 4.2 From the above decision of Ld. CITCA) as given by him vide appeal order dated 22-05-2012 and from the fact of the case it can be seen that the issue in question were mainly the taxability of interest Income of ₹ 71 .01 crore u/s 115JB of the IT Act. The AO had held the entire amount of ₹ 78 .01 crore was appellant s income both as per normal provisions and as per provisions of section 115 JB of the IT Act for AY 2004-05. However, the Ld. CIT(A) has held that out of interest income of ₹ 71.01 crore, only &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -07 and 2007-08. Rather the appellant has taken different stand by way of disclosing the above entire Income of ₹ 71 .01 crore in the revised return for AY 2004-05. Thus, it can be said that it was not the stand of appellant that above interest income of ₹ 39 crores be taxed for AY 2007-08. Thus, allowability or disallowability of deduction u/s 80IA has never been a subject matter of appellate proceedings of AY 2004-05 in respect of which above appeal order dated 27-07-2012 has been passed by the Ld. CIT(A). Thus, in my opinion the AO has correctly given effect in his Order Giving Effect to Appeal Order of CIT(A) dated 27-07-2012 for the year under consideration. Considering all these facts, the ground of appeal of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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