TMI Blog2018 (2) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... y 11, 2016 for the assessment year 2012-13. 2. Brief facts are that the assessee is a firm and has filed the return of income for the impugned assessment year, declaring a total income of ₹ 3,33,03,214, on September 30, 2012. The case was selected for scrutiny and a notice under section 143(2) of the Act was issued to the assessee. 3. It was noticed by the Assessing Officer that the assessee had claimed deduction under section 80-IA of the Act to the extent of ₹ 1,30,82,753. This deduction was claimed on the windmill power generation receipt of ₹ 1,45,38,490, claiming depreciation of ₹ 2,61,647 and maintenance of ₹ 11,94,089. It was noticed by the Assessing Officer that the assessee has purchased the windmill during the assessment years 2005-06 and 2006-07 and the depreciation on the cost of windmills was claimed in the earlier years at the rate of 80 per cent. As per the Assessing Officer, these losses need to be notionally carried forward in view of the provisions of section 80-IA(5) of the Act and therefore, the Assessing Officer called upon the assessee to explain the deductions made. In response thereto the assessee has submitted a reply. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000 = ₹ 1,25,82,753. 5. Feeling aggrieved by the order of the Commissioner of Income-tax (Appeals), the Revenue is in appeal before us with the following grounds of appeal : 1. The order of the Commissioner of Income-tax (Appeals) is opposed to law and the facts and circumstances of the case. 2. The Commissioner of Income-tax (Appeals) erred in directing the Assessing Officer to allow the deduction claimed under section 80-IA of the Act without appreciating that the deduction envisaged is business specific as per the provisions of section 80-IA(5) of the Income-tax Act and that the gross total income is to be arrived at after applying sections 70 to 79 of the Income-tax Act and that while computing the total income, the provisions of section 80AB have an overriding effect. 3. The Commissioner of Income-tax (Appeals) erred in allowing the assessee's appeal by accepting the submissions of the assessee, disregarding the specific provisions of section 80-IA(5) of the Income- tax Act, wherein it is unambiguously made clear that the profit from the eligible business of the purpose of determination of the quantum of deduction under section 80-IA of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d representative has drawn our attention to the order of the hon'ble jurisdictional High Court and also the Board Circular No. 1 of 2016, dated February 15, 2016 See [2016] 381 ITR (St.) 1. 8. We have heard the rival contentions and perused the materials on record, as also the judgment in Anil H. Lad (supra) and Circular of the Central Board of Direct Taxes (supra). In our view, the issue is squarely covered by the jurisdictional High Court decision as mentioned in the impugned order. Paragraphs 8 and 9 of the said judgment is reproduced hereunder : 8. From the aforesaid provisions, it is clear that incentive is given to the assessee which has invested in infrastructure. The said benefit has to be claimed from the eligible business for a period of ten consecutive years. This ten consecutive years is to be decided by the assessee out of 15 years. That 15 years is to be computed from the day the business was set up. Claiming of deduction would arise only when there is a profit earned by the eligible business. Before any profit is earned, the question of determining the quantum of deduction would not arise. Before the assessee starts earning profit, from this eligible busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d gains derived from such business for ten consecutive assessment years. Deduction is given to eligible business and the same is defined in sub-section (4). Sub-section (2) provides option to the assessee to choose 10 consecutive assessment years out of 15 years. Option has to be exercised. If it is not exercised, the assessee will not be getting the benefit. Fifteen years is the outer limit arid the same is beginning from the year in which the under taking or the enterprise develops and begins to operate any infrastructure activity etc. Sub-section (5) deals with quantum of deduction for an eligible business. The words initial assessment year are used in sub-section (5) and the same is not defined under the provisions. It is to be noted that initial assessment year employed in sub-section (5) is different from the words 'beginning from the year' referred to in sub-section (2). Sub-section (5) starts with a non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored for the purpose of determining the quantum of deduction for the assessment year immediately succeeding the initial assessment year, thereby a fiction is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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