TMI Blog2016 (5) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... tionally brought forward losses/ depreciation of the Jojobera 67.5 MW power generating unit for the period from the assessment year 1997-98 to 2001-02 which are already set off against the other business income in earlier years and set-off being allowed by the Revenue shall not be adjusted from the profit so computed by the assessee company with respect to Jojobera 67.5MW power generating unit for the assessment year 2002-03 for the purposes of computing deduction u/s.80IA of the Act. Since, we have adjudicated this issue on merit in favour of the assessee company based on detailed discussions and reasoning as set out above, the grounds raised by the assessee company challenging the reopening of the assessment u/s 147/148 has become academic and infructuous and hence we refrain from deciding the same and the questions raised by the assessee company in the grounds of appeal are kept open. - I.T.A. No. 3078/Mum/2009 - - - Dated:- 19-5-2016 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For the Appellant : Shri Dinesh Vyas For the Respondent : Shri Manjunatha Swamy, CIT DR ORDER PER RAMIT KOCHAR, Accountant Member This app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2002-03 as the initial assessment year , although the plant was installed in the assessment year 1997-98. As per the provisions of section 80IA(5) the profits and gains of sub-section (1) shall for the purpose of determining the quantum of deduction u/s. 80IA for the assessment year immediately succeeding initial assessment year or any subsequent assessment year be computed as if such eligible business were the only source of income of the tax-payer during the previous year relevant to the initial assessment year and to every subsequent assessment years. Thus as per the AO, in view of the above provisions of law , the brought forward unabsorbed depreciation/losses of the unit Jojobera 67.5MW pertaining to earlier years should have been set off against the profit of the current year to compute deduction u/s 80IA of the Act. Since , there was omission to set off the brought forward losses while computing deduction u/s 80IA of the Act, the case was reopened u/s 147 of the Act by issue of notice u/s 148 of the Act and the assessee company responded vide letter dated 22nd June, 2005 asking for the reasons for reopening which was provided to the assessee company on 27th July, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s available in respect of operation and maintenance of infrastructure facility under the earlier section 80IA. The initial assessment year in such a case was defined to mean the assessment year specified at the option of the assessee to be the initial year, not falling beyond the twelfth assessment year starting from the previous year in which the enterprise begins operating and maintaining the infrastructure facility. On the same analogy, the initial assessment year under the new sec.80IA for an undertaking engaged in generation/distribution of power would be the assessment year specified at the option of the assessee to be the initial year, not falling beyond the fifteenth assessment year starting from the previous year in which the enterprise begins to generate / distribute power. This view is further supported by paras 8 and 9 of Form 10CCB which is the form of audit report for claiming deduction u/s.80IA which specifies the date of commencement of operation by the undertaking and initial assessment year from when deduction is being claimed. It was submitted by the assessee company that from perusal of the above submissions of the assessee company indicates that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany submitted that the total taxable income of the assessee company includes Jojobera 67.5 MW taxable income of ₹ 20,70,84,187/- which amount has been claimed by the assessee company as deduction u/s. 80IA of the Act and since there is no brought forward loss/unabsorbed depreciation set off against the total income , to arrive at final taxable total income, no adjustment has been made to the claim u/s 80IA of the Act for the Jojobera 67.5MW power undertaking s taxable income. The contention of the assessee company was rejected by the A.O. as in the opinion of the A.O. , Section 80IA(5) of the Act clearly stipulates the quantum of deduction u/s 80IA for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year , the profit and gains from the eligible business shall be computed as if such eligible business were the only source of income of the assessee company during the financial year relevant to the initial assessment year and to every subsequent assessment year up-to and including the assessment year up-to which the determination is made. It was observed by the A.O. that the assessee company has started its Jojobera 67 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27,36,07,641 B/f losses (-)86,11,28,840 (-)58,75,21,199 A.Y. 2001-02 (Tata Power) 15,37,29,761 B/f losses (-)58,75,21,199 (-)43,37,91,438 Income from Jojobera 67.5 MW unit for A.Y. 2002-03 20,70,84,187 Balance loss (-)22,67,07,251 Thus it was observed by the AO, it can be seen from the above that from the assessment year 1997-98 onwards the assessee company had unabsorbed depreciation in respect of Jojobera 67.5 MW power generating unit for the assessment year 1997-98 and 1998-99. However, after set off of unabsorbed depreciation of earlier years against the income of the assessment years 1999-00 to 2001-02, there is still unabsorbed depreciation of ₹ 43,37,91,438/- which has to be set off against the income for the assessment year 2002-03 for working out the deduction u/s 80IA of the Act. Since there is no eligible profit, the assessee company is not eligible for any de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 80IA of the Act , which included a deduction of ₹ 20,39,98,805/- u/s 80IA of the Act in respect of Jojobera 67.5 MW power generating unit. The difference between the amount of deduction claimed in respect of Jojobera 67.5 MW power generating undertaking i.e. ₹ 20,70,84,187/- and the amount allowed at the time of assessment u/s 143(3) of the Act i.e. ₹ 20,39,98,905/- was on account of other income of ₹ 30,85,382/-, which in the opinion of the A.O. was not allowable u/s 80IA of the Act. No other adjustment was made despite the disclosure in the tax audit report. The A.O. reopened the assessment and passed reassessment order dated 25th October, 2006 u/s 143(3) r.ws. 147 of the Act and the deduction granted earlier u/s 80IA of the Act in respect of Jojobera 67.5 MW power generating unit had been nullified by re-computing the taxable income of the said unit as a separate entity right from the date of commencement of power generation by the Jejobera 67.5MW unit . Accordingly the brought forward depreciation of the unit on a standalone basis from the date of its commencement has been set off to arrive at the taxable income of that unit qualifying for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch income. The A.O. clearly had reasons to believe that income has escaped assessment and the same can be reopened under the provisions of Section 147 of the Act. The ld. CIT(A) held that in the instant case since the assessment has been reopened within four years from the end of the assessment year, the proviso to section 147 of the Act has no application, thus, the contention of the assessee company that it has disclosed fully and truly all the material fact necessary for the assessment is of no help to the assessee company and the reliance placed by the assessee company on various case laws has been misplaced. It was also observed by the ld. CIT(A) that the issue of application of 80IA(5) of the Act has never been examined by the A.O. though there is disclosure on the part of the assessee company, therefore, the fact of the present case are different than the case relied upon by the assessee company, therefore reliance placed by the assessee company is misplaced and not applicable in the present case. It was held by the ld. CIT(A) that in the reasons recorded, satisfaction of the A.O. has been arrived. In the reasons recorded for reopening of the assessment, a copy of the same h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year under the new Section 80IA for an undertaking engaged in generation/distribution of power is to be applied for. The assessee company also submitted that the above view is supported by para 8 9 of Form No. 10CCB which is the form of audit report for claiming deduction u/s 80IA of the Act, to contend that the initial assessment year is distinct from the previous year relating to the assessment year in which the undertaking commences its operations and the initial assessment year can be specified at the option of the assessee company. The assessee company relied upon the decision of Hon ble Rajasthan High Court in the case of CIT v. Mewar Oil and General Mills Ltd., (2004)186 CTR 141(Raj.) to content that the Hon ble Rajasthan High Court held that 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 u/s 80-I for the purpose of computing admissible deductions there under. The assessee company relied upon the decision of Chennai Tribunal in the case of Mohan Breweries Distilleries Limited v. ACIT in ITA no. 1077 of 2007, whereby the Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 20,70,84,187/- and the A.O. has rightly disallowed the same, vide orders dated 27-02-2009. The CIT(A) also relied upon decision in the case of ITO v. Kanchan Oil Industries Limited (2005) 92 TTJ 739(Kol. Trib.) and Khinvasara Investment Private Limited v. JCIT (2007) 109 TTJ 341(Pune. Trib) 7.Aggrieved by the orders dated 27-02-2009 of the ld. CIT(A), the assessee company is in second appeal before the Tribunal. 8. The ld. Senior Counsel for the assessee company submitted at the outset that the issue is now squarely covered by the Circular No. 1 of 2016 dated 15th February, 2016 issued by CBDT which is binding on Revenue which is reproduced below: Circular No. 1 /2016 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes North Block, New Delhi, the 15th February, 2016 Subject: Clarification of the term 'initial assessment year' in section 80lA (5) of the Income-tax Act, 1961. Section 80IA of the Income-tax Act, 1961 ('Act'), as substituted by the Finance Act, 1999 with effect from 01.04.2000, provides for deduction of an amount equal to 100% of the profits and gains derived by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction u/s 80IA for ten consecutive years beginning from the year in respect of which he has exercised such option subject to the fulfillment of conditions prescribed in the section. Hence, the term 'initial assessment year' would mean the first year opted for by the assessee for claiming deduction u/s 80IA. However, the total number of years for claiming deduction should not transgress the prescribed slab of fifteen or twenty years, as the case may be and the period of claim should be availed in continuity. The Assessing Officers are, therefore, directed to allow deduction u/s 80IA in accordance with this clarification and after being satisfied that all the prescribed conditions applicable in a particular case are duly satisfied. 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 that section for which the Standing Counsels/D.R.s be suitably instructed. The above be brought to the notice of all Assessing Officers concerned. Sd/- (Deepshikha Sharma) Director to the Government of India (F.No.200/31/2015-ITA-I) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e framing the original assessment u/s 143(3) of the Act, as the tax audit report which is certified by a Chartered Accountant is meant for the benefit of the Revenue containing all the specified details which may have bearing on the assessment. The ld. Senior Counsel submitted that in the original assessment order passed u/s 143(3) of the Act, the AO has taken correct view whereby the claim of the assessee company u/s 80IA of the Act with respect to Jojobera 67.5 MW power generation unit was allowed to the tune of ₹ 20,39,98,805/- as against the claim of the assessee company to the tune of ₹ 20,70,84,187/- filed in the return of income filed with the revenue. The ld Senior Counsel submitted that there was change of opinion of the A.O. as no new tangible material has come into the possession of the AO which could have live link and nexus with the formation of an belief of the AO that the income has escaped assessment , and the reopening has been done merely on the basis of audit objection while in the original assessment the A.O. has applied his mind while passing the order u/s 143(3) of the Act and it is clearly a case of change of opinion. It was also contended that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng were given, while no reasons for reopening were provided to the assessee company till as per the directions of the Tribunal. The Tribunal directed the assessee company to file the affidavit to that effect that the reasons for re- opening were not given to the assessee company during the course of assessment proceedings u/s 143(3) read with Section 147 even till the framing of the assessment order dated 25.10.2006 u/ 147 read with Section 143(3) of the Act and the finding in the assessment order dated 25.10.2006 that the reasons were duly given was erroneous , the affidavits to that effect were duly filed by the assessee company vide affidavit dated 19-11-2014 of Mr P D Suvarna, employee of the assessee company who appeared before the AO for representing the assessee company during the re-assessment proceedings and the affidavit dated 10-02-2015 of Sh. Anil Sardana , Managing Director of the assessee company and both the affidavits are filed before the Tribunal which are placed in the file . The ld. Senior Counsel submitted that no new tangible material has been brought on record by the Revenue to substantiate that any income has escaped assessment. The assessee company challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. D.R. supported the order of the ld. CIT(A) and relied upon the decision of Hon ble Supreme Court in the case of ACIT v. Rajesh Jhaveri Stock Brokers Private Limited (2007) 161 Taxman 316(SC). However, the Ld. DR submitted and accepted that the Circular No 1/2016 issued by the CBDT is binding on the Revenue. 10. We have heard the rival contentions, perused the material on record and also carefully gone through the case laws relied upon by both the parties. The power project generating undertaking Jojobera 67.5 MW unit commenced generation of power in the assessment year 1997-98. The said undertaking went into losses till the assessment year 2001-02 and the losses/depreciation of the said undertaking were adjusted and set off against the other business income in the earlier years , which set off was allowed by the Revenue. Thus, in nutshell, there was no carry forward of unabsorbed losses/depreciation of the 67.5 MW Jojobera power project undertaking. With effect from the assessment year 2001-02, the said 67.5 MW Jojobera power project undertaking is directly owned and managed by the assessee company as earlier it was owned by Tata Electric (AOP) whereby the assessee company h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s 80-1A of the Act. However, the total number of years for claiming deduction should not transgress the prescribed slab of fifteen or twenty years, as the case may be and the period of claim should be availed in continuity. Thus, the CBDT directed all the Assessing Officers concerned to allow deduction u/s. 80-IA of the Act in accordance with this clarification and after being satisfied that all the prescribed conditions applicable in a particular case are duly satisfied. Pending litigation on allowability of deduction u/s. 80IA of the Act shall also not be pursued to the extent it relates to interpreting 'initial assessment year' as mentioned in sub-section (5) of that section. In view of the said Circular, the claim of the Revenue is now not sustainable as the circular is binding on Revenue. The relevant CBDT circular no 1/2016 (F.No.200/31/2015-ITA-1)dated 15-2-2006 is reproduced below Circular No. 1/2016 issued by the CBDT is binding on the Revenue and the same is reproduced below : Circular No. 1 /2016 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes North Block, New Delhi, the 15th Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consecutive years, out of a slab of fifteen (or twenty) years, as prescribed under that sub-section. It is hereby clarified that once such initial assessment year has been opted for by the assessee, he shall be entitled to claim deduction u/s 80IA for ten consecutive years beginning from the year in respect of which he has exercised such option subject to the fulfillment of conditions prescribed in the section. Hence, the term 'initial assessment year' would mean the first year opted for by the assessee for claiming deduction u/s 80IA. However, the total number of years for claiming deduction should not transgress the prescribed slab of fifteen or twenty years, as the case may be and the period of claim should be availed in continuity. The Assessing Officers are, therefore, directed to allow deduction u/s 80IA in accordance with this clarification and after being satisfied that all the prescribed conditions applicable in a particular case are duly satisfied. 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 that section for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining to the windmill, which were set off in the earlier year against other business income of the assessee following the decision of the jurisdictional High Court in the case of M/s.Velayudhaswamy Spinning Mills (340 ITR 477), when the same is pending appeal before the Supreme Court in SLP.Civil No.33475 of 2012 ? (2) Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in holding that the initial assessment year in Section 80IA(5) would only mean the year of claim of deduction under Section 80IA and not the year of commencement of eligible business ? and (3) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee has the option to choose the first/initial assessment year of claim for deduction under Section 80IA ? 2. Heard Mr.T.R.Senthilkumar, learned Standing Counsel for the Department. Mr.M.P.Senthilkumar, learned counsel takes notice for the respondent. 3. Even according to the learned Standing Counsel for the Department, this Court has consistently followed the decision in M/s.Velayudhaswamy Spinning Mills (340 ITR 477), despite the Honourable Supreme Court or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf as the first year for granting deduction, ignoring the clear mandate provided under Sub-Section (2) which allows a choice to the assessee for deciding the year from which it desires to claim deduction out of the applicable slab of fifteen (or twenty) years. The matter has been examined by the Board. It is abundantly clear from Sub-Section (2) that an assessee who is eligible to claim deduction u/s 80IA has the option to choose the initial/first year from which it may desire the claim of deduction for ten consecutive years, out of a slab of fifteen (or twenty) years, as prescribed under that Sub-Section. It is hereby clarified that once such initial assessment year has been opted for by the assessee, he shall be entitled to claim deduction u/s 801A for ten consecutive years beginning from the year in respect of which he has exercised such option subject to the fulfillment of conditions prescribed in the section. Hence, the term initial assessment year would mean the first year opted for by the assessee for claiming deduction u/s 801A. However, the total number of years for claiming deduction should not transgress the prescribed slab of fifteen or twenty years, as the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,26,84,110 Income from Windmill Division 1 (2002-03) assessment year 2004-05 71,16,270 Balance of unabsorbed depreciation allowance 7,55,67,840 Unabsorbed depreciation allowance balance (-) 5,84,90,895 Tax Case (Appeal) No. 940 of 2009 : Net income from Windmill Division 2,82,67,370 Unabsorbed depreciation allowance (initial assessment year) assessment year 2003-04 12,11,01,360 -do- assessment year 2004-05 1,59,85,972 13,70,87,332 Balance (-) 10,88,19,962 Tax Case (Appeal) No. 918 of 2008 : Total loss + depreciation of the units claiming depreciation for all earlier years (-) 24,63,50,426 Less : Current year s income from the unit 10,63,74,164 Balance income available for deduction under section 80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I and had taken the view that the entire depreciation allowance and development rebate for the past assessment years were fully set off against the total income of the assessee for those assessment years and no further depreciation allowance or development rebate remained unabsorbed and, therefore, nothing could be deducted in respect of the set off while determining the deduction under section 80-I of the Act. Section 80-I was introduced by the Finance (No. 2) Act, 1980, with effect from April 1, 1981. The said sub-section deals with deduction in respect of profits and gains from industrial undertakings after a certain date. Section 80-I reads as follows : 80-I. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof : . . . (5) The deduction specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above provision, for the purpose of allowing deduction under section 80-I brought forward losses and unabsorbed depreciation of the new industry need not be taken into consideration once they have been set off from other sources of income earlier. In the present case, we are concerned with the provision of section 80-IA. The said provision was introduced by the Finance Act, 1999, with effect from April 1, 2000. The provisions of sections 80- I and 80-IA are also more or less identically worded. Sections 80-I and 80-IA come in Chapter VI-A of the Income-tax Act. Chapter VI-A deals with deductions to be made in computing total income. There are two tax incentives contemplated in Chapter VI-A. One is investment incentive and the other one is profit-linked investment. Chapter VI-A was introduced by the Finance Act, 1965, with effect from April 1, 1965, and it consists of four headings. They are A, B, C and D. Heading A is general and it also contains definition. It consists of sections 80A, 80AA, 80AB, 80AC and 80B. Section 80AB deals with Deductions to be made with reference to the income included in the gross total income , which reads as follows : Where any deduction is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as they contain both substantive as well as procedural provisions. The Supreme Court further observed in the said judgment that sub-section (5) of section 80-IA provides for manner of computation of profits of an eligible business. Accordingly such profits are to be computed as if such eligible business is the only source of income of the assessee. 16. Section 80-IA reads as follows : 80-IA. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business) there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of an amount equal to hundred per cent. of the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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 outer limit and the same is beginning from the year in which the undertaking 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). The important factors are to be noted in sub-section (5) and they are as under : (1)It starts with a non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored ; (2)It is for the purpose of determining the quantum of deduction ; (3)For the assessment year immediately succeeding the initial assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 ITR 311 (Raj) ; [2004] 186 CTR (Raj) 141, the Rajasthan High Court also considered the scope of section 80-I and held as follows (page 314 of 271 ITR) : 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 assessment year 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 Commissioner of Income-tax (Appeals), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. We are, therefore, of the view that loss in the year earlier to the initial assessment year already absorbed against the profit of other business cannot be notionally brought forward and set off against the profits of the eligible business as no such mandate is provided in section 80-IA(5). 23. Under these circumstances, we set aside the order of the Tribunal and answer all the questions in favour of the appellant/assessee and against the Revenue in Tax Case Nos. 909 and 940 of 2009 respectively. Accordingly, tax cases are allowed. Tax Case No. 918 of 2008 : 24. It is filed by the Revenue by raising three questions of law as stated above. In respect of the second question, which is the same as the issue involved in the above tax cases in Tax Case Nos. 909 and 940 of 2009, we also answer in favour of the assessee and against the Revenue. 25. In respect of questions Nos. 1 and 3, the issues are related to the exercising the option of claiming deduction under section 80-IA. As per the assessee, the assessment year is 2004-05. According to the Revenue, the assessment year is 1999- 2000. From the records it is clear that the assessee claimed deduction under section 80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -IA. The Commissioner of Income-tax (Appeals), vide his order in I. T. A. No. 39/2005-06, dated August 4, 2005, in paragraph 12 directed the Assessing Officer to allow the claim under section 80-IA which was accordingly, allowed. Assessment year 2000-01 : In this assessment year also the assessee in the computation memo claimed deduction under section 80-IA of an amount of ₹ 1,20,19,495 which was allowed in full by the Assessing Officer in the regular assessment order under section 143(3), dated March 28, 2003. This being the position, the statement of the assessee that the claim under section 80-IA claimed for the first time in the assessment year 2004-05 is totally contrary to the facts as mentioned. This proves that assessment year 2004-05 is not the initial assessment year as claimed by the assessee. The fact of the matter is that the assessee exercised its option of claiming deduction under section 80-IA in the assessment year 1999-2000 itself. Therefore, the assessment year 1999-2000 is the initial assessment year. But this letter is contrary to the findings of the lower authorities. The lower authorities categorically observed that the first year in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the assessee started claiming deduction under section 80- IA. At the cost of repetition, we make it clear that the case law relied on by the Departmental representative are delivered before the amendment to section 80-IA by the Finance Act, 1999. Before the amendment, the initial assessment year was defined in the Act but after the amendment there is no definition for initial assessment year in the Act and there is option to the assessee in selecting the year of claiming relief under section 80-IA. In view of this, we are of the opinion that there is no question of setting off notionally carried forward unabsorbed depreciation or loss against the profits of the units and the assessee is entitled to claim deduction under section 80-IA on the current assessment year on the current year profit. Accordingly, we allow the claim of the assessee. 27. From a reading of the above order, it is clear that all the authorities below had given a categorical finding that the first year is 2004-05. The issue also reached finality. The Revenue has accepted the finding given by the Commissioner of Incometax (Appeals) and, therefore, the same cannot be raised in the assessee s appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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