Court confirms deduction under Section 80-IA, rejects reopening of past losses.

The High Court dismissed the Tax Case (Appeal), confirming the Tribunal's order and ruling in favor of the assessee. The Court held that the assessee is entitled to claim deduction under Section 80-IA of the Income Tax Act, and previous losses set off against other income should not be reopened for current year computation. The pending appeals before the Supreme Court did not alter the Court's decision, as the facts were identical to the previously decided case of Velayudhaswamy Spinning Mills.

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Issues Involved:
1. Entitlement to claim deduction under Section 80-IA of the Income Tax Act.
2. Applicability of previous judgments and pending appeals before the Supreme Court.

Issue-wise Detailed Analysis:

1. Entitlement to claim deduction under Section 80-IA of the Income Tax Act:

The core issue in this appeal is whether the respondent/assessee is entitled to claim deduction under Section 80-IA of the Income Tax Act. The Court referenced its decision in the case of Velayudhaswamy Spinning Mills V. Asst. CIT (2012) 340 ITR 477, which dealt with the benefits under Chapter VIA of the Income Tax Act. The Court relied on the Supreme Court decision in Liberty India V. CIT (2009) 317 ITR 218, which clarified that Chapter VI-A provides profit-linked incentives. It was held that once losses and other deductions have been set off against the income of previous years, they should not be reopened for the purpose of computing current year income under Section 80I or 80IA. The Court reiterated that the assessee should not be denied the admissible deduction under Section 80IA.

2. Applicability of previous judgments and pending appeals before the Supreme Court:

The Court noted that the decision in Velayudhaswamy Spinning Mills V. Asst. CIT is pending appeal before the Supreme Court. However, the Supreme Court has only ordered notice and not admitted the appeals yet. The Court emphasized that the facts of the present case are identical to the Velayudhaswamy Spinning Mills case, where the business undertakings are windmills, and the assessee claimed the benefit of deduction under Section 80IA for the relevant and subsequent assessment years. The losses were already set off against other income, thus falling within the parameters of Section 80IA.

The Court also referenced a batch of cases in T.C.(A)Nos.408 of 2012, where it followed the decision in Velayudhaswamy Spinning Mills and ruled in favor of the assessee. Consequently, the Court dismissed the present appeal, confirming the Tribunal's order and answering the questions of law against the Revenue and in favor of the assessee.

Conclusion:

The High Court dismissed the Tax Case (Appeal), confirming the Tribunal's order and ruling in favor of the assessee. The Court held that the assessee is entitled to claim deduction under Section 80-IA of the Income Tax Act, and previous losses set off against other income should not be reopened for current year computation. The pending appeals before the Supreme Court did not alter the Court's decision, as the facts were identical to the previously decided case of Velayudhaswamy Spinning Mills.

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