TaxTMI 
TaxTMI 
2012 (8) TMI 589
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.... of the Act. The undertaking, i.e. the Windmill was set-up on 1.12.2001, i.e. in the period corresponding to the assessment year 2002-03 whereas the assessee claimed the deduction under section 80IA of the Act for the first time in the instant assessment year, i.e. 2007-08. The assessee claimed such deduction for the first time in the year under consideration as in the past years the unit was in losses and it was only in the year under consideration that it had made profits. The Assessing Officer, however, observed that after considering the losses suffered by the unit upto the last assessment year, there was no profit of the undertaking and, therefore, the claim of deduction under section 80IA(4) of the Act was not allowable during the year under consideration. The assessee claimed that having regard to the option available to it under section 80IA(2), the deduction was claimed for the first time in the assessment year 2007-08 and in the earlier years the assessee had not chosen the option of claiming deduction under section 80-IA of the Act and, therefore, question of deducting the earlier years' brought forward losses considering the same to be an independent unit does not arise....
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....ly decided by the Commissioner of Income-tax (Appeals) against the assessee. 4 7. We have carefully considered the rival submissions. The facts relevant to the controversy are that the assessee set-up an undertaking for generation and distribution of power, i.e. a Windmill during the assessment year 2002-03, which was eligible for claim of deduction under section 80-IA of the Act. The said unit incurred losses in the first few years and for the assessment year under consideration, ie. Assessment year 2007-08, it claimed deduction under section 80-IA of Rs 10,66,354/- ignoring losses suffered by the said unit in the earlier years. As per the assessee, the earlier years' losses were set off against the income of other ineligible businesses. It has been explained that it is only during the assessment year under consideration, i.e. 2007-08 that the assessee company exercised the option of claiming deduction under section 80-IA of the Act and, therefore, losses suffered in the earlier years cannot be considered by wrongly interpreting section 80-IA(5) of the Act. Application of section 80-IA(5) is canvassed to be applicable only after the option is exercised by the assessee in terms wh....
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....e to be brought forward and not the losses of the earlier years which have been already set off against the income of the assessee. The Hon'ble Madras High Court has been further pleased to hold that revenue cannot notionally bring forward any loss of earlier years which had already been set off against the other income of assessee and set off against the correct income of the eligible business. Fiction created by Sub-section (5) of Section 80IA does not contemplate such notional set off, held the Hon'ble High Court. The Hon'ble Madras High Court in that decision has also referred the decision of Hon'ble Supreme Court in the case of Liberty India Vs. CIT (Supra) and the decision of Special Bench of the Tribunal in the case of Goldman Shares & Finance (P) Ltd. (Supra). There is no dispute that even a decision of non-jurisdictional High Court is a binding precedent for the Tribunal until a contrary decision is given by any other competent High Court. In this regard, we find strength from the recent decision of Hon'ble jurisdictional Bombay High Court in the case of Commissioner of Central Excise Vs. Valson Dyeing, Bleaching and Printing Works (Supra) wherein the Hon'ble Bombay High ....
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..... The ld. AR therein thus contended that though the issue may be decided against the assessee in view of the Special Bench of the Tribunal in the case of ACIT Vs. Goldmine Shares & Financial (P) Ltd., but it should not be construed as acquiescence from the side of the assessee as the legal position on the subject is yet not settled. The Ground No. 2 is thus decided in favour of the assesse" 6 9. Ostensibly, the co-ordinate Bench relied upon the judgment of the Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT 38 DTR (Mad) 57 on this aspect and held that only when the assessee exercises the option, losses of the years beginning from such year alone are to be brought forward and not the losses of prior years which have otherwise been set off against other incomes of the assessee. The Hon'ble Madras High Court further held that the department cannot notionally bring forward any loss of earlier years which has already been set off against other incomes of the assessee so as to reduce it again from the current income of the assessee from the eligible business. Be that as it may, having regard to the aforesaid precedent, the stand of the assessee is....