Tax Tribunal Ruling Upheld: Respondent's Deduction Claim Approved u/s 80-IA for AY 2010-2011.

The HC upheld the Tribunal's decision, allowing the respondent's deduction claim under Section 80-IA of the Income Tax Act for the assessment year 2010-2011. The Court followed the precedent set by the Velayudhaswamy Spinning Mills judgment, which the SC upheld by dismissing the Revenue's appeal. The appeal was dismissed in favor of the assessee, with no costs.

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Issues:
1. Entitlement for deduction under Section 80-IA of the Income Tax Act.
2. Treatment of losses for computing deduction under Section 80-IA(5) of the Act.

Analysis:
1. The respondent, engaged in the hotel and resort business, claimed deduction under Section 80-IA for the assessment year 2010-2011, which was disallowed by the assessing officer. The Commissioner of Income Tax (Appeals) allowed the claim, citing a judgment in the case of Velayudhaswamy Spinning Mills. The Revenue objected, stating that the Supreme Court had a pending appeal against the Velayudhaswamy judgment. However, the Supreme Court later dismissed the appeal, upholding the judgment without providing reasons. The High Court noted that the losses need not be revoked for computing current income under Section 80-IA, as per the Rajasthan High Court's view. The Court upheld the Tribunal's decision to follow the Velayudhaswamy judgment, which had now attained finality post the Supreme Court's dismissal of the appeal.

2. The Court emphasized the importance of consistency and judicial discipline in following its earlier judgment in the Velayudhaswamy case. It found no serious legal infirmity to deviate from the established precedent. Consequently, the Court held that the Tribunal did not err in applying the Velayudhaswamy judgment in the current case. Therefore, the appeal was dismissed in favor of the assessee, with no costs incurred at the admission stage.

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