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2016 (6) TMI 383 - MADRAS HIGH COURT

2016 (6) TMI 383 - MADRAS HIGH COURT - TMI - Eligibility of deduction under Section 80IA - Held that:- Having exercised its option and its losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. There appears to be no distinction on facts in relation to the decision reported in Velayudhaswamy Spinning Mills [2010 (3) TMI 860 - Madras High Court ].- Decided in favour of the ass .....

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appeal are that the assessee filed the return for the assessment year 2011-12, on 29.09.2011, admitting the total income of ₹ 15,19,456/-. The nature of business of the assessee is to export home textiles products and generate power using wind energy. The case was selected for scrutiny under CASS and Notice, under Section 143(2) of the Income Tax Act, was issued. The Assessment Officer completed the assessment under Section 143(3), making the following deductions, 1. Addition for low prof .....

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ras High Court in M/s.Velayudhaswamy Spinning Mills (P) Ltd., v. Assistant Commissioner of Income-Tax reported in 340 ITR 477. 3. Before the appellate authority, the assessee contended that he had total turnover of ₹ 74,26,272/-, through sale of power generated out of windmill and admitted ₹ 65,12,277/- as income from windmill business and claimed deduction under Section 80-IA. Placing reliance on a decision in M/s.Velayudhaswamy Spinning Mills (P) Ltd., v. Assistant Commissioner of .....

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sioner of Income-Tax, Trichy, filed an appeal before the Income-Tax Appellate Tribunal, B Bench, Chennai. After hearing the learned counsel appearing for the department and by observing that the decision of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd.,'s case (stated supra), is squarely applicable to the facts of the case, the Tribunal dismissed the appeal filed by the revenue. 5. Mr.J.Narayanasamy, learned counsel appearing for the revenue assailed the correctness of the order of t .....

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uction under Section 80-IB can be allowed on the balance amount and therefore, raised a substantial question of law, as to whether, the Tribunal was right in holding that the assessee is entitled for deduction under Section 80IA, with respect of the windmill division, by following the decision of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd.,'s case (stated supra). 6. Chapter VIA of the Income-Tax Act, 1961, deals with deductions to be made in computing the total income. As per Secti .....

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d by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. 7. In Velayudhaswamy Spinning Mills Pvt. Ltd.,'s case (stat .....

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While computing the assessment, the Assessing Officer disallowed the claim of deduction made by the assessee under Section 80-IA amounting to ₹ 10,63,74,164/-, on the ground that the eligible deduction under Section 80-IA after setting off, of the loss, which works out to 'nil'. 8. Aggrieved by the said order, appeal was filed by the assessee therein before the CIT(A) and that the same was dismissed. Against the said order, the assessee therein filed an appeal before the Tribunal. .....

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n the facts and circumstances of the case, the Tribunal was right in not admitting a letter from the Assessing Officer showing that assessee had exercised the option of claiming the deduction under s. 80-IA during the assessment year 1999-2000 which is the first/initial assessment year for the purpose of deduction under Section 80-IA, as additional evidence and holding that the assessment year 2004-05 is first/initial assessment year in which the assessee had claimed the deduction under s. 80-IA .....

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9. On the facts and circumstances of the case, while adverting to the substantial questions of law and after considering the judgment of the Apex Court in Liberty India vs. CIT (2009) 225 CTR (SC) 233 : (2009) 28 DTR (SC) 73 : (2009) 317 ITR 218 (SC) and the judgment of the Rajasthan High Court in CIT vs. Mewar Oil & General Mills Ltd. (2004) 186 CTR (Raj) 141 : (2004) 271 ITR 311 (Raj), a Hon'ble Division Bench of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd.,'s case (state .....

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