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The Assistant Commissioner of Income Tax Versus M/s. MSK Construction Pvt. Ltd.,

2016 (7) TMI 309 - ITAT CHENNAI

Disallowance of claim on deduction u/s.80IA - Held that:- The business undertaking of the assessee is wind mill power generation/hosiery goods, etc., and it has claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment year in question and for the subsequent years as well. 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 o .....

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peal is filed by the Revenue is directed against the order of the Learned Commissioner of Income Tax(A)-8, Chennai dated 11.12.2015 pertaining to the assessment year 2010-11. 2. The Revenue has raised the following grounds. 1. The order of the learned CIT(A) is contrary to law and facts of the case. 2.1. The CIT(A) erred in deleting the disallowance of claim on deduction u/s.801A of ₹ 39,62,582/-. 2.2. The CIT(A) failed to appreciate that the initial assessment year purpose of sec.801A(5) .....

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case of M/s.Velayudhasamy Spinning Mills P. Ltd.( 231 CTR 368) has not become final and against which Department has filed SLP before the Hon ble Supreme Court. 3. In our opinion, this issue is squarely covered by the order of the jurisdictional High court in the case of Velayudhaswamy Spinning Mills (P) Ltd vs. ACIT 340 ITR 477, wherein it was held that:- from reading of sub-s (1) of s. 80IA, it is clear that it provides that where the gross total income of an assessee includes any profits and .....

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rovides option to the assessee to choose 10 consecutive assessment years out of 15 years. Option has to be exercised. If it is not exercised, the assessee will not be getting the benefit. Fifteen years is outer limit and the same is beginning from the years in which the undertaking or the enterprise develops and begins to operate any infrastructure activity etc Sub-s. (5) deals with quantum of deduction for an eligible business. The words initial assessment year are used in sub-s (5) and the sam .....

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ding the initial assessment year ; (4) It is a deeming provision; (5) fiction created that the eligible business is the only source of income; and (6) during the previous year relevant to the initial assessment year and every subsequent assessment year. From reading of the above, it is clear that the eligible business were the only source of income, during the previous year relevant to initial assessment year and every subsequent assessment years. When the assessee exercises the option, the only .....

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