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2005 (9) TMI 238 - AT - Income TaxTreatment Of Unabsorbed Depreciation - deduction claimed u/s 80-IA - HELD THAT:- From the facts it is clear that, AO is not justified in again making a notional concept of unabsorbed depreciation pertaining to the wind mill project relating to the earlier assessment year and notionally bring the same to the account of the impugned assessment year and setting off against the profit of the wind mill project for the impugned assessment year. Such a notional adjustment is not called for and not contemplated in the claim of deduction provided in s. 80-IA. As the entire 100 per cent depreciation claimed by the assessee for the earlier asst. yr. 1996-97 has already been set off against the income from business for the said assessment year, there remains nothing to be brought forward to the account of the impugned asst. yr. 1997-98. Therefore, the claim of the assessee has to be allowed by the assessing authority on the basis of the profit of the wind mill project for the impugned assessment year not fettered by any notional amount of unabsorbed depreciation pertaining to the preceding assessment year. The assessee succeeds in its appeal. The whole confusion has been arising in this case only for the reason that the assessee was entitled for 100 per cent depreciation. If the view taken by the Revenue has to be accepted, assessee's setting up wind mill projects would never have an occasion to claim the benefit of deduction u/s 80-IA as the entire profits of such units would be eaten away by the unabsorbed depreciation arising to the assessee against depreciation allowance of 100 per cent. In result, the appeal by the assessee filed is allowed.
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