TMI Blog2016 (8) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... rm ‘initial assessment year’ has been held to mean the first year opted to by the assessee for claiming deduction under S.80IA of the Act. Thus, it is clear that the initial assessment year is not the year of operation or commencement of business, as interpreted by the Assessing Officer, but it is the first year in which the assessee has opted to claim the deduction under S.80IA. In view of this clarification of the Board, which clinches the issue in favour of the assessee, and is binding on the Revenue authorities, we accept the contentions of the assessee in this behalf, and direct the Assessing Officer to allow the claim of the assessee, after verifying the records as to the initial assessment year in which the assessee for the first tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue at length and has held as under : 2. As regards other grounds, i.e. grounds No.1 to 5, relating to deduction under S.80IA of the Act, brief facts are that the assessee is into the business of generation of power through windmills and also manufacture of pesticides. It filed its return of income on 28.9.2008 for the assessment year 2008-09 admitting an income of ₹ 15,60,711. Dur1ing the assessment proceedings under S.143(3) of the Act, the assessing officer observed that the assessee has made a claim of deduction under S.80IA of the Act for the three wind mill units set up by the assessee. He observed that the assessee has commissioned its first windmill unit on 31.3.1999(Phase I), the second unit in March, 2005(phase II) and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond appeal before us. 5. Though the learned counsel for the assessee fairly admitted that the issue has been decided against the assessee by the decisions of the Tribunal in assessee s own case for earlier years, he has drawn our attention to the CBDT circular dated 15.2.2016 on S.80IA(5) and submitted that in view of the said circular of the Board, the claim of the assessee under S.80IA needs reconsideration. He also placed reliance upon the judgment of the Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills Pvt. Ltd. V/s. ACIT (340 ITR 477), wherein it has been clearly held that only the loses of the year beginning from the initial assessment year opted to by the assessee shall be set off and no losses of ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made. (6) From a literal reading of the above provision, it is seen that the profits and gains from the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made . In the above sub-section, which prescribes the manner of determining the quantum of deduction, a reference has been made to the term initial assessment year . It has been represented that some Assessing Officers are interpreting the term initial assessment year as the year in which the eligible business/ manufacturing activity ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the prescribed conditions applicable in a particular case are duly satisfied. Pending litigation on allowability of deduction u/s 80 IA shall also not be pursued to the extent it relates to interpreting initial assessment year as mentioned in sub-section (5) of that section for which the Standing Counsels/DRs be suitably instructed. From a reading of the above circular, it is clear that the assessee who is eligible to claim deduction under S.80IA has been given an option to choose initial/first year from which it may desire to claim the deduction for ten consecutive years out of the slab of 15 or 20 years as prescribed under the above sub-section. The term initial assessment year has been held to mean the first year opted to by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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