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2016 (2) TMI 829 - AT - Income TaxNature of the receipts received on account of forfeiture of warrant/share application money - whether the same is to be treated as capital in nature or the Revenue income of the assessee - Held that:- In the case of “Prism Lt. vs. JCIT” (2006 (3) TMI 204 - ITAT BOMBAY-I ) wherein the Tribunal has held that the amount received on account of forfeiture of NCDs for non payment of call money was to be treated as capital in nature as the issuance of NCDs (non convertible debentures) was not a business of the assessee and hence such amount cannot be charged to tax even under section 41(1) of the Act. In the case in hand also, the assessee had forfeited the advance/application money of ₹ 1,78,50,000/- received from the warrant holders after the expiry of the date for converting the same into the shares and the same had been credited to the capital reserve account in the balance sheet. - Decided in favour of assessee Carry forward of notional loss under section 80IA for the purpose of computation of eligible claim/deduction - Held that: We find that the Hon'ble Madras High Court in the case of “Velayudhaswamy Spinning Mills (P) Ltd. vs. ACIT” ( 2010 (3) TMI 860 - Madras High Court)has held that the assessee is entitled to claim deduction u/s 80IA for 10 consecutive years out of 15 years and that initial year of benefit can be opted by the assessee. Losses and depreciation of the years earlier to the initial assessment year which have already been absorbed against profits of other businesses cannot be notionally brought forward and set off against the profits of the eligible business for computing the deduction u/s.80IA - Decided in favour of assessee
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