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2009 (11) TMI 909 - ITAT CHENNAIDeduction u/s 80-IA(5) - 'initial year' - as observed by the AO that the deduction u/s 80-IA would be computed with reference to profits of the eligible unit unaffected by losses suffered in other units - CIT(A) dismissing assessee's claim u/s 80-IA by relying on the decision of Goldmine Shares & Finance ( P) Ltd. [2008 (4) TMI 405 - ITAT AHMEDABAD] and ignoring the decision of Mohan Breweries & Distilleries Ltd. [2007 (10) TMI 354 - ITAT MADRAS-B] - whether assessee can opt for the year of deduction for any 10 consecutive years out of 15 years taken from the first year in which the enterprise develops and begins to operate in any infrastructure activity and it does not mandate that first of 10 consecutive assessment years should be always the first year of set up of enterprise? HELD THAT:- As in computing the total income of the assessee, derived from profits and gains from an eligible business, which are detailed in sub-s. (4), 100 per cent deduction is allowed for ten consecutive assessment years. Sub-s. (2) of s. 80-IA gives option to the assessee to choose the 10 consecutive assessment years out of 15 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 parks. Sub-s. (5.) of s. 80-IA qualifies deduction of sub-s. (1) of s. 80A with a non obstante clause and overrides every other provision in this Act providing mechanism by way of assumption that for determining the quantum of deduction for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, it would be deemed 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 assessment year upto and including the assessment year for which the determination is to be made. The above provisions are very clear, plain and direct in meaning. But only difficulty is cast by the term 'initial year' which has nowhere been defined in the Act, yet by sub-s. (2) it is obvious that it is referring to the option vested in the assessee to choose any 10 years out of 15 or 20 years, period provided, as the case may be. The year from which option has been exercised is to be treated as the initial assessment year, but after that the 10 years have in continuity. The Chennai Bench has directly dealt with the question which is really involved in this appeal. Hence, sub-s. (5) of s. 80-IA would come into operation only from the year in which the appellant started claiming deduction under s. 80-IA i.e., from the initial year, as we have described earlier, and the depreciation relating to the years prior to the initial assessment year cannot be brought back notionally to be adjusted against the income of the initial or subsequent assessment years. But for the 10 year lag opted by the assessee the ratio of Special Bench would apply verbatim in its letters and spirit. Therefore, we allow this issue in favour of the assessee by following the Special Bench and the Chennai Bench decision. Windmill is a separate undertaking - Each co-generation, plant installed in different years has to be considered as a separate undertaking and the profit/loss cannot be clubbed in order to compute the deduction under s. 80-IA.Appeal of the assessee stands allowed.
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