TaxTMI 
TaxTMI 
2013 (2) TMI 202
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....s perverse and arbi-trary ?" 2. The assessee is in the business of manufacturing of super enameled copper winding wires, besides installing a windmill in Tamilnadu. The assessee put up the windmill for power generation at a cost of Rs. 98.4 lakhs and claimed a depreciation of Rs. 39.36 lakhs which was negated by the Assessing Officer on the ground that the windmill was not installed during the relevant financial year 2004-05 relevant to the assessment year 2005-06. Thereafter, during the relevant assessment year, the assessee filed a revised statement of income claiming income from business at Rs.60,00,829 from which he deducted Rs.73,20,339 towards loss/deprecia-tion from windmill operation. The assessee was in receipt of Rs. 5.51 lakhs....
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....t off the depreciation loss/income from power generation business against the profits of manufacturing of copper wires and, secondly, that the non-taxable income under section 80-IA is set off against non-eligible business income of the assessee. Thirdly, the depreciation from windmill has not got absorbed fully against eligible business profits. All these cumu-lative factors entail the assessee disqualified to claim set off of such loss against the non-eligible business profits being in contravention to the rele-vant provisions of law. Therefore, the action of the Assessing Officer to allow the depreciation loss of Rs. 73,20,339 to be carried forward for set off against the eligible business and bringing the profits of Rs. 60,00,829 attri-....
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....ainst income from another source under the same head of income. However, once set off is allowed under section 70(1) from the income from another source under the same head, another deduction on the same count is not permissible, i.e., during the subsequent years if the assessee makes surplus profits after claiming eligible allowances and he is entitled to claim deduction under section 80-IA, the earlier benefit given under other sections of the Act should be taken into account before grant-ing deduction under section 80-IA. Therefore, the order of the Commis-sioner of Income-tax (Appeals) came to be set aside and the assessee was given the benefit of setting off the profits of one business against the losses incurred in another business. ....
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....fits' used by the Legislature in sec-tion 80-I(1) are very important which indicate that the gross total income of an assessee shall include profits from a priority undertaking. While computing the quantum of deduction under section 80-I(6), the Assessing Officer, no doubt, has to treat the profits derived from an industrial undertaking as the only source of income in order to arrive at the deductions under Chapter VI-A. However, this court finds that the non obstante clause appearing in section 80-I(6) of the Act, is applicable only to the quantum of deduction, whereas, the gross total income under section 80B(5) which is also referred to in section 80-I(1) is required to be computed in the manner provided under the Act which presupposes t....