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ACIT - 9 (2) (1) , Mumbai Versus Empilon Fabrics Pvt. Ltd.

2017 (12) TMI 294 - ITAT MUMBAI

Deduction u/s 80IA - year of claim as 'initial assessment year' - Held that:- CIT(A) after appreciating the facts had relied upon the judgment passed by Hon’ble Madras High Court in the case of Velayudhaswamy Spg. Mills (P.) Ltd. v. Asstt. CIT [2010 (3) TMI 860 - Madras High Court] wherein it has been clearly held that where the depreciation and loss of earlier assessment years have already been set off against other business income of those assessment years, there is no need for notionally carr .....

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issued by CBDT dated 15.02.16 wherein it has been clearly held that the term ‘initial assessment year’ would mean the first year opted for by the assessee for claiming deduction u/s 80IA. We have also . . noticed that in the above circular, a direction has been given to the AO to allow deduction u/s 80IA and 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 tha .....

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d in law, the Ld. C/T(A) erred in allowing deduction us 80/A thereby ignoring the non-obstante provisions of Section 801A(5) according to which the assessee is not eligible for deduction since he has carry forward losses of the eligible business. ii) Whether and in the circumstances of the case, the Ld. CIT-(A) erred in ignoring the judgement of the Hon'ble ITAT Mumbai in the case of Pidilite Industries Limited (ITA No. 33551M12009 dated 10th June 2011) whose ratio-decidendi is totally appli .....

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plicable to the present case . The appellant prays that the order of the CIT(A) on the above ground above set aside and that of the A,O. be restored. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 2. As per the facts of the present case, the assessee company has set up a wind mill at village Navadra of taluka Kalyanpur, Distt-Jamnagar, Gujarat and has shown receipts of ₹ 61,87,740/-. The assessee had claimed deduction u/s 80IA amounting .....

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by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties allowed the appeal of the assessee. Now before us, the revenue has preferred the appeal by raising the above grounds. Ground No. 1 to 3. 3. All the grounds raised by the revenue are inter connected and inter related and relates to challenging the order of Ld. CIT(A) in allowing deduction u/s 80IA to the assessee, therefore we thought it fit to dispose of the same thorough .....

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eproduced below:- Vide grounds of appeal no. 4 to 10 the action of the AO of disallowing the deduction u/s 80IA by applying the provisions of section 801A(v) by calculating the profits on wind mill business starting from the year in which said wind mill was setup and not from the initial assessment year in which the deduction has been claimed for the first time, has been challenged by the appellant. The AO has relied upon the decision of tribunal in the case of ACIT vs Gold Mine Shares and Finan .....

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under section 80-IA. The Court has held further that the year of commencement alone need not be the 'initial year', but depending upon the facts of the . . case and the option exercised by the assessee, the year of claim also can be considered as 'initial assessment year'. The above said case law has been followed by different benches of the Hon'ble ITAT. Recently Mumbai Bench 'E' in the case of Shevie Exports 33 taxmann.com 446 held as under:- Section 80-IA, read wi .....

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period i.e. after 1-4-2000 by virtue of section 80-IA(2) - Held, yes - Whether loss incurred prior to initial assessment year is not required to be notionally carried forward and adjusted within meaning of section 80-IA(5) so as to disallow a part of deduction claimed - Held, yes [Paras 10, 12 & 13] [In favour of assesseel The Jurisdictional bench of the ITAT while dealing with the matter of 263 invoked by CIT held that:- . . Moreover, the claim of deduction under section 80-IA was based on .....

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der passed by the Assessing Officer is upheld. [Para 16] Respectfully following the order of the jurisdictional bench, the AO is directed to re-compute the deduction u/ s 801A by adopting the year in which the deduction has been claimed for the first time as initial assessment year and the grounds of appeal are allowed. 5. After having gone through the facts of the present case as well as considering the orders passed by revenue authorities and hearing the parties at length, we find that Ld. CIT .....

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