TMI Blog2005 (9) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... and not contemplated in the claim of deduction provided in s. 80-IA. As the entire 100 per cent depreciation claimed by the assessee for the earlier asst. yr. 1996-97 has already been set off against the income from business for the said assessment year, there remains nothing to be brought forward to the account of the impugned asst. yr. 1997-98. Therefore, the claim of the assessee has to be allowed by the assessing authority on the basis of the profit of the wind mill project for the impugned assessment year not fettered by any notional amount of unabsorbed depreciation pertaining to the preceding assessment year. The assessee succeeds in its appeal. The whole confusion has been arising in this case only for the reason that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of Rs. 35,68,790 under s. 80-IA of the IT Act on the income of the electricity generation as the plant was otherwise entitled for the said exemption. The AO did not allow the claim of the assessee on the ground that the 100 per cent depreciation allowed for the wind mills for the immediately preceding assessment year has left back unabsorbed depreciation which has to be considered for the impugned asst. yr. 1997-98 for set off and if so, there would be no profit for claiming such deduction under s. 80-IA. The case of the assessee was that the depreciation on wind mills claimed for the earlier asst. yr. 1996-97 was fully absorbed not only by income of this impugned unit but also from the business income from other activities carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit given to an assessee which satisfied the conditions laid down and the deduction is only from the profits and gains attributable to the specific activities which are referred to in the section. The Court held that the benefit of the special deduction should not be diminished by the other benefits conferred by the Act such as the right to have previous losses set off. The Court held that the two sections served different purposes and the benefit of both must be available to an assessee without the one impinging on the other. Accordingly, the Court held that the deduction under s. 80E must be given before losses pertaining to previous year are set off under s. 72. 7. The Madras High Court in a similar case in CIT vs. L.M. Van Moppes Diamon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h circumstances, the AO is not justified in again making a notional concept of unabsorbed depreciation pertaining to the wind mill project relating to the earlier assessment year and notionally bring the same to the account of the impugned assessment year and setting off against the profit of the wind mill project for the impugned assessment year. Such a notional adjustment is not called for and not contemplated in the claim of deduction provided in s. 80-IA. As the entire 100 per cent depreciation claimed by the assessee for the earlier asst. yr. 1996-97 has already been set off against the income from business for the said assessment year, there remains nothing to be brought forward to the account of the impugned asst. yr. 1997-98. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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