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2017 (8) TMI 474 - AT - Income TaxSet-off of losses - assessee installed tall windmills relevant to the Assessment Year 2007-08 - assessee opted 2010-11 as the initial assessment year - losses pertain to AY 2007-08 to 2009-10 - eligibility for set off against the profits of the other income of the ineligible units - Held that:- Tribunal in Poonawalla Estates Stud & Agro Farm Pvt. Ltd. Vs. ACIT [2010 (9) TMI 1080 - ITAT PUNE] was approved by the Hon’ble Madras High Court in the case of Velayudhaswamy Spinning Mills Pvt. Ltd. Vs. ACIT (2010 (3) TMI 860 - Madras High Court ). 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. Whether the assessee is justified in not making a claim u/s.32 while quantifying the allowable deduction u/s. 80IA(4) - Held that:- On considering the facts we find there is some confusion with regard to the issue adjudicated by the CIT(A). Further, we find relevant Ground No.2 is the relevant one which is raised by the assessee before the CIT(A) and contrary to the same, the adjudication of the CIT(A) is on different issue and not in the issue of allowing depreciation while computing the total income of the assessee and not while computing deduction allowable u/s.80IA(4)(iii)(a) of the Act. The issue, in principle, should be decided in favour of the assessee as the computing of total income is done in accordance with the provisions of sections 28 to 44 which include section 32 of the Act. CIT(A) is directed to grant reasonable opportunity to the assessee and consider the Ground No.2 raised before him in proper perspective and decide the issue afresh in accordance with law Appeal of the assessee is allowed for statistical purposes.
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