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TMI Blog2016 (1) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... eration from Ahmadnagar wind mill and another disallowance of Rs. 86,223/- out of various expenses u/s. 14A of the Act; as made in assessment order dated 29-11-2010. We find from the case file that it has also filed an additional ground to its first substantive plea that the CIT(A) ought to have treated the amount received on sale of sales tax entitlements as capital receipts not liable to be taxed. 3. We have heard both the parties. The assessee files a tabulation chart and copy of various tribunal orders in its own case in support of the above stated grounds. The Revenue is fair enough in not disputing correctness thereof. It is to be seen from the case record that a co-ordinate bench in assessee's own case ITA 3012/Ahd/2010 (assessment year 2007-08) decided on 19-12-2013 has remitted the first issue of sales tax sale proceeds back to the Assessing Officer for fresh adjudication. We feel that the instant ground deserves to follow suit in absence of any distinction on facts of law. The assessee's additional ground (supra) is found to be a supplementary plea only. We accordingly follow co-ordinate bench decision remitting the issue back to Assessing Officer after considering the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 80 IA (4) then the earlier years brought forward losses and depreciations need not be adjusted against the profits of initial year from the eligible unit for allowing deduction under section 80IA to the assessee. The provisions of section 80 IA (5) shall apply for the years after the initial year for computing the deduction allowable to the assessee under section 80IA of the Act. 18. We find force in the submission of the learned AR of the assessee. We also find that it is an undisputed fact that in all the appeals under consideration the initial year chosen by the assessee for claiming deduction is after 1-4-2000 when the amended provision of section 80IA was applicable. 19. Section 80IA, which has been substituted w.e.f. 1st April 2000, provides that where the gross total income of an assessee includes any profits and gains derived by an undertaking from any eligible business referred to in sub-section 4, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the deduction of an amount equal to 100% of the profits and gains derived from such business for 10 consecutive years. Substituted sub-section (2) of section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready been set-off cannot be brought forward and adjusted into the period of ten years from the initial assessment year as contemplated or chosen by the assessee. It is only when the loss have been incurred from the initial assessment year, then the assessee has to adjust loss in the subsequent assessment years and it has to be computed as if eligible business is the only source of income and then only deduction under section 80IA can be determined. This is the true import of section 80IA(5). 21. In the decision of Goldmine Shares and Finance Pvt. Ltd. (supra), decided by the Special Bench of the Tribunal, the claim of deduction by the assessee had started from assessment year 1996- 97 onwards and the assessee had claimed deduction under section 80IA starting from the first year itself i.e., assessment year 1996-97. Thus, the Special Bench was dealing with the operation of section 80IA(5) where the assessee had first claimed the deduction in the assessment year 1996-97 and for subsequent assessment years. This aspect of the matter has been very well elaborated by the Madras High Court in Velayudhaswamy Spinning Mills Pvt. Ltd. (supra) after considering the Special Bench decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d held as follows:- "Having considered the rival contentions which follow on the line noticed above, we are of the opinion that on finding the fact that there was no carry forward losses of 1983-84, which could be set off against the income of the current asst. yr, 1984-85, the recomputation of income from the new industrial undertaking by setting off the carry forward of unabsorbed depreciation or depreciation allowance from previous year did not simply arise and on the finding of fact noticed by the CIT(A), which has not been disturbed by the Tribunal and challenged before us, there was no error much less any error apparent on the face of the record which could be rectified. That question would have been germane only if there would have been carry forward of unabsorbed depreciation and unabsorbed development rebate or any other unabsorbed losses of the previous year arising out of the priority industry and whether it was required to be set off against the income of the current year. It is not at all required that losses or other deductions which have already been set off against the income of the previous year should be reopened again for computation of current income under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable because the income from non eligible business was set-off from the loss of eligible business in the year of commencement. In this case, it was not an issue as to whether the losses pertained to prior to initial assessment year or after the initial assessment year. If the losses have been incurred in the eligible unit and has been set-off against the non- eligible unit after the initial assessment year, then the ratio laid down by the Tribunal is in full consonance with the law. However, this is not the case in the instant case because the loss pertained to prior to initial assessment year which have been set-off against the profits of non-eligible units. The beginning of the initial assessment year as adopted by the assessee is assessment year 2008-09 only and, therefore, the loss of assessment year 2007-08 cannot be notionally carried forward within the meaning of section 80IA(5). Thus, the reliance placed by the learned Departmental Representative on the decision of Pidilite Industries (supra), will not be applicable in the present case. 27. The other decision heavily relied upon by the learned Departmental Representative in Hyderabad Chemical Supplies Ltd. (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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