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2016 (2) TMI 987 - ITAT PUNE

2016 (2) TMI 987 - ITAT PUNE - TMI - Interpretation of provision of section 80IA(5) - "initial assessment year" - Held that:- As Poonawalla Stud and Agro Farm Pvt. Ltd. Vs. ACIT [2010 (9) TMI 1080 - ITAT PUNE] the initial 'A. Y' for the purpose of claiming deduction u/s. 80IA was the first year in which the assessee claimed the deduction u/s. 80IA (1) after exercising his option as per the provisions of 80IA (2) of the Act. It was held that the Ld. CIT(A) has erred in holding that the initial A. .....

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other income of the assessee. The revenue cannot notionally bring forward any loss of earlier years which has already been set off against any other income of the assessee and set off the same against the current income of the eligible business. We thus set aside the orders of the authorities below and direct the A. O to allow the claimed deduction u/s. 80IA without bringing the notionally brought forward any loss or depreciation of earlier years which has already been set off against other inco .....

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nds of Appeal :- 1. Whether in the facts and circumstances of the case, the Ld. CIT(A) was correct in interpreting the provision of section 80IA(5) in the light of decision in the case of M/s Hyderabad Chemicals Supplies Ltd., APIE, Balanagar Hyderabad- 37 Vs. The ACIT, Circle 1 (4), Hyderabad Dated 21st January, 2011. 2. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) was correct in interpreting "initial assessment year". 3. Whether in the facts and in the ci .....

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) of the Act. Identical grounds were raised by the Revenue before the Tribunal in respect of assessment years 2009-10 and 2010-11 in assessee s own case. 4. Briefly stated, the relevant facts of the case are that the assessee is a company registered under the Companies Act, 1956 and inter-alia engaged in the manufacturing of automobile components. The assessee had filed its return of income on 12.09.2011 declaring total income of ₹ 21,64,98,057/-. The assessee claimed the deduction under s .....

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nt Carried forward Cumulative Balance of Unabsorbed losses 2006-07 (5,70,63,691) - (5,70,63,691) (5,70,63,691) 2007-08 31,06,047 31,06,047 - (5,39,57,643) 2008-09 31,30,123 31,30,123 - (5,08,27,519 2009-10 13,83,975 13,83,975 - (4,94,43,544) 2010-11 62,73,330 62,73,330 - (4,31,70,214) 2011-12 55,07,530 55,07,530 - (3,76,62,684) 5. The Assessing Officer held that as there is cumulative balances of unabsorbed losses from A.Y. 2006-07 onwards, more particularly from the business of generation of po .....

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e. 7. Aggrieved by the impugned action of the CIT(A), the Revenue is in appeal before us. 8. The Ld. Authorized Representative for the assessee pointed out that the identical issue has been decided in favour of the assessee by the Pune Bench of the Tribunal in assessee s own case in ITA Nos.1373 & 1374/PN/2013 relating to assessment years 2009-10 & 2010-11, order dated 27.05.2014. 9. The Ld. Departmental Representative for the Revenue relied upon the order of the Assessing Officer and re .....

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) as well as the decision of the Pune Bench of the Tribunal in the case of Serum International Ltd. vs. Addl. CIT, Range-6 in ITA Nos.290 to 292/PN/2010, order dated 20.09.2011. The operative paras of the order of the Co-ordinate Bench of the Tribunal in assessee s own case in ITA Nos.1373 & 1374/PN/2013 relating to assessment years 2009-10 & 2010-11, order dated 27.05.2014 are reproduced hereunder for ready reference :- 5. We have heard the parties. We find that the issue stands squarel .....

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No. 1 as to what would be the initial A.Y for the purposes of Section 80IA(5) of the Act has been decided in favour of the assessee by the Pune Bench of the Tribunal in the case of Poonawalla Stud and Agro Farm Pvt. Ltd. Vs. ACIT (Supra). In that case after discussing the issue in detail, the Tribunal has come to the conclusion that the initial 'A. Y' for the purpose of claiming deduction u/s. 80IA was the first year in which the assessee claimed the deduction u/s. 80IA (1) after exerci .....

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ther income, is fully covered by the decision of Hon 'ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra) holding that as per Sub-section (5) of Section 801 A, profits are to be computed as if such eligible business is the only source of income of the assessee. When the assessee exercises the option, only the losses of the years beginning from the initial A. Y. are to be brought forward and not the losses of the earlier years which have been already se .....

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referred the decision of Hon'ble Supreme Court in the case of Liberty India Vs. CIT (Supra) and the decision of Special Bench of the Tribunal in the case of Goldman Shares & Finance (P) Ltd. (Supra). There is no dispute that even a decision of nonjurisdictional High Court is a binding precedent for the Tribunal until a contrary decision is given by any other competent High Court. In this regard, we find strength from the recent decision of Hon'ble jurisdictional Bombay High Court in .....

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ority like an Income Tax Tribunal acting anywhere in the country has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court on that question. We thus respectfully following the ratio laid down by the Hon'ble jurisdictional High Court in the case of Commissioner of Central Excise Vs. Vakson Dyeing, Bleaching and Printing Works (Supra) hold that the Tribunal is bound by the decision of the Hon'ble Madras .....

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. The revenue cannot notionally bring forward any loss of earlier years which has already been set off against any other income of the assessee and set off the same against the current income of the eligible business. We thus set aside the orders of the authorities below and direct the A. O to allow the claimed deduction u/s. 80IA without bringing the notionally brought forward any loss or depreciation of earlier years which has already been set off against other income of the assessee. The deci .....

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