TMI Blog2014 (5) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... .- Decided in favour of assessee. - ITA Nos. 1373 and 1374/PN/2013 - - - Dated:- 27-5-2014 - SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. Appellant By: Shri S.P. Walimbe Respondent By: Shri Nikhil Pathak ORDER PER R.S. PADVEKAR, JM:- These two appeals are filed by the Revenue challenging the respective impugned orders of the Ld. CIT(A), Aurangabad dated 05-042013 for the A.Ys. 2009-10 2010-11. The Revenue has taken the following grounds in the appeal which are verbatim in both the assessment years. 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 circumstances of the case, the definition of Initial Assessment Year as given in Section 80IB(14) of the Act is not applicable in the provision of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IA(5) of the Act, which is a non-obstane clause having overriding effect to the provisions of the Act. As interpreted by the Assessing Officer, the said section provides that for the purpose of determining the quantum of deduction u/s. 80IA of the Act for the assessment year or any subsequent assessment year, the profits and gains derived from the eligible business shall be computed as if such eligible business was the only source of income of the assessee during the previous year relevant to the initial assessment years and to every subsequent assessment year, for which the determination is to be made. The Assessing Officer placed his heavy reliance on the decision of the ITAT, Hyderabad, A Bench in the case of M/s. Hyderabad Chemicals Suppliers Ltd., APIE, Balanagar, Hyderabad-37 Vs. ACIT, Circle-1(4), Hyderabad dated 21-01-2011. The Assessing Officer has also placed reliance on the decision of the Hon'ble Special Bench of the Tribunal in the case of ACIT Vs. Goldmines Shares Investments Pvt. Ltd. 113 ITD 209 (Ahmadabad) (SB). In both the assessment years the claim of the deduction u/s. 80IA(4)(iv) Act was denied to the assessee. 4. The assessee carried the matter bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an opt for year of deduction for any 10 consecutive years out of 15 years taken from the first year in which the undertaking or enterprise develops and begins to operate any infrastructure activity. Section 80IA(2) does not mandate that first year of 10 consecutive assessment years should be always the first year of set up of enterprise. If the intention of the legislature is that the first year of set up is the initial assessment year to claim deduction u/s.80IA, then there is no meaning in giving option to the assessee to claim deduction for 10 consecutive assessment years out of 15 years. The meaning of section 80IA(2) is that the assessee can exercise the option in any 10 consecutive years starting from the first year in which the undertaking begins to operate any infrastructure facility. If the assessee opts to exercise the claim for first year it should continue to claim the deduction for another 9 years. If it opts the second year to claim deduction it should continue for another 9 years till the IT year, similarly if it opts to claim relief from the 3rd year, it will end in the 12th year, if it opts to claim from the 4th year then it will end in the 13th year, if it opts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Hon'ble ITAT, Pune while deciding the similar issue in the case of Serum International Ltd., Pune has considered the decision of ACIT Vs. Goldmines Shares Investment Pvt.Ltd., (Special Bench Ahmadabad ITAT) 113 ITD 209 which has been relied on by the A.O. The Hon'ble ITAT while deciding the above referred appeal has referred to and followed another decision of the Co-ordinate Bench in the case of Lap Finance Consultancy (P) Ltd. Further, the contention of the appellant is supported by the decision in the case of Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT (2010) 38 DTR 57 (Mad). It is also settled law when the two contrary decisions/views on the same issue are available then the decision/views in favour of the assessee are to be followed. It is also settled law that the beneficial or incentive provisions are to be construed liberally. 5.3 In view of the above facts and discussion and respectfully following the ratio laid down by the above decisions and particularly the decisions of Hon'ble Jurisdictional ITAT, I am of the considered view that the appellant has correctly claimed the deduction u/s.80IA(4)(iv)(a) of the Act and the A.O. is not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osses of the earlier years which have been already set off against the income of the assessee. The Hon'ble Madras High Court has been further pleased to hold that revenue cannot notionally bring forward any loss of earlier years which had already been set off against the other income of assessee and set off against the correct income of the eligible business. Fiction created by Sub-section (5) of Section 80IA does not contemplate such notional set off, held the Hon'ble High Court. The Hon'ble Madras High Court in that decision has also 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 non-jurisdictional 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 the case of Commissioner of Central Excise Vs. Valson Dyeing, Bleaching and Printing Works (Supra) wherein the Hon'ble Bombay High Court has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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