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2016 (2) TMI 987 - AT - Income TaxInterpretation of provision of section 80IA(5) - "initial assessment year" - Held that:- As Poonawalla Stud and Agro Farm Pvt. Ltd. Vs. ACIT [2010 (9) TMI 1080 - ITAT PUNE] the initial 'A. Y' for the purpose of claiming deduction u/s. 80IA was the first year in which the assessee claimed the deduction u/s. 80IA (1) after exercising his option as per the provisions of 80IA (2) of the Act. It was held that the Ld. CIT(A) has erred in holding that the initial A. Y for the purposes of Section 80IA(2) r.w.s. 80IA (5) was the year in which the assessee started generating electricity from the wind mill activity. Also see Hon’ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd. vs. ACIT [2010 (3) TMI 860 - Madras High Court] When the assessee exercising the option, only the losses of the year beginning from the initial A. Y. are to be brought forward and not the losses of earlier year which have been already set off against the other income of the assessee. The revenue cannot notionally bring forward any loss of earlier years which has already been set off against any other income of the assessee and set off the same against the current income of the eligible business. We thus set aside the orders of the authorities below and direct the A. O to allow the claimed deduction u/s. 80IA without bringing the notionally brought forward any loss or depreciation of earlier years which has already been set off against other income of the assessee.
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