TMI Blog2017 (8) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... f against the profits of the other income of the ineligible units of the earlier years. AO has grossly erred in disallowing the said set off of the said brought forward losses against the income earned from the windmills of the eligible units in the current year under consideration. Whether the assessee is justified in not making a claim u/s.32 while quantifying the allowable deduction u/s. 80IA(4) - Held that:- On considering the facts we find there is some confusion with regard to the issue adjudicated by the CIT(A). Further, we find relevant Ground No.2 is the relevant one which is raised by the assessee before the CIT(A) and contrary to the same, the adjudication of the CIT(A) is on different issue and not in the issue of allowing depreciation while computing the total income of the assessee and not while computing deduction allowable u/s.80IA(4)(iii)(a) of the Act. The issue, in principle, should be decided in favour of the assessee as the computing of total income is done in accordance with the provisions of sections 28 to 44 which include section 32 of the Act. CIT(A) is directed to grant reasonable opportunity to the assessee and consider the Ground No.2 raised before hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the ineligible units of the assessee in accordance with the provisions of section 80IB(4)(iv)(a) of the Act. He accordingly made addition of the said amount. Further, while recomputing the deduction, AO also altered the claim of deduction u/s.80IB(4) qua the claim of depreciation u/s.32 of the Act. 5. During the First Appellate Proceedings, assessee made various submissions in writing and relied heavily in the case of Poonawalla Estates Stud Agro Farm Pvt. Ltd. Vs. ACIT and the judgment of Madras High Court in the case of Velayudhaswamy Spinning Mills Pvt. Ltd. Vs. ACIT (supra). Further, assessee also relied heavily on the CBDT Circular No.01/2016 dated 15-02-2016 in support of the assessee s claim of initial assessment year and the manner of computation of losses of the eligible units against the other income earned from the ineligible units of the assessee. CIT(A) did not agree with the submissions of the assessee. Regarding the first issue contents of Para No.4.1 is relevant. On this issue, CIT(A) opined that the said decision of the Pune Bench of the Tribunal and the judgment of the Hon ble Madras High Court cited (supra) is on the initial assessment year and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is intrinsically linked that leads the assessee to chose later assessment year as the initial assessment year,. Therefore, the CIT(A) did not appreciate the above fact before not applying the Circular of CBDT cited (supra) to the facts of the present case and approving the findings of the AO eventually. 7. Bringing our attention to the said order of the Pune Bench of the Tribunal, where one of us is a party (Accountant Member), the Ld. Counsel for the assessee submitted that the facts of the said case are identical where losses were set off against the other income of the ineligible units of the assessee selecting later years as initial assessment years and the said of the claim of the assessee was approved by the Tribunal in the appeal before the Tribunal. 8. On the other hand, Ld. Departmental Representative for the Revenue, on this issue heavily relied on the orders of the AO and the CIT(A) and submitted for confirming the same. 9. We heard both the sides on this issue and perused the orders of the Revenue and the cited decisions before us. On perusal of the said order of the Pune Bench of the Tribunal, we find the decision of the Tribunal is relevant for the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it related to the method of allowing claim of depreciation while computing the total income of the assessee. 13. After hearing both the sides, we find Para No.7 of CIT(A) is relevant. For the sake of completeness, we proceed to extract relevant lines of the said para (Page 14) and the same reads as under : 7. . . . . . . . . . . . . . . . . . . . . . . . Thus for the purpose of deductions under Chapter VI-A, the gross total income has to be computed by claiming deduction allowable under sections 30 to 43D of the Act and the assessee cannot claim a double advantage, i.e. in the subsequent years for claiming deduction u/s.80IA(4)(iii), the assessee should claim deduction after reducing depreciation irrespective of the amount claimed as the total income. Hence, in view of the foregoing discussion, and in the light of the decision of the jurisdictional High Court in the case of Plastiblends India Limited (supra), the appellant s claim of deduction u/s.80IA(4)(iii) will be restricted to the extent of ₹ 1,24,01,288/-. Hence, the order of the AO restricting the claim of the appellant u/s.80IA(4)(iii) of the Act to ₹ 1,24,01,288/- is upheld. The AO is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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