TaxTMI 
TaxTMI 
2014 (8) TMI 804
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....engaged in the manufacturing of Glaze Frit mainly used for ceramic tile manufacturing units. It is also engaged in generation of wind-power-energy. The assessee-company filed its return of income for Assessment year 2010 -11 on 29.9.2010, disclosing total income of Rs. 1,63,40,530/ -. The assessee has claimed deduction u/s 80IA of the Income -tax Act, 1961 [hereinafter referred to as 'the Act', for short] in respect of windmill installed through Suzlon Infrastructure Limited at Jaisalmer which was denied by the A.O but which was allowed by the ld. CIT(A). 3.2 Second ground pertains to disallowance of higher depreciation in respect of wind mill installed at Coimbatore and Sadiya. We incorporate the following pages of ld. CIT(A)'s order which will depict clearly the facts and legal position on the issue: " Now, in this regard, it is submitted that assessee company has installed & put to use one windmill during the F.Y. 2004-05 and as per provision of sec 80(IA) assessee company opted A.Y. 2010-11 as initial year and claimed deduction in respect of income of wind for the first time during the year under assessment. The relevant provision of sec. 80IA reads as foll....
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....mployed in sub-s. (5) is different from the words " beginning from the year" referred to in sub-s. (2). Important factors are to be noted in sub-s. (5) and they are as under: "(1) It starts with non-obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored; (2) It is for the purpose of determining the quantum of deduction; (3) For the assessment year immediately succeeding the initial assessment year; (4) It is a deeming provision; (5) Fiction created that the eligible business is the only source of income; and (6) During the previous year relevant to the initial assessment year and every subsequent assessment year." From reading of the above, it is clear that the eligible business were the only source of income, during the previous year relevant to initial assessment year and every subsequent assessment years. When the assessee exercises the option, the only losses of the years beginning from initial assessment year alone are to be brought forward and no losses of earlier years which were already set off against the income of the assessee. Looking forward to a period of ten years from the initial asses....
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....et off in earlier years-As per sub-s. (5) of s. 80-IA, profit are to be computed as if such eligible business is the only source of income of the assessee-When the assessee exercises the option, only the losses of the years beginning from the initial assessment year are to be brought forward and not the losses of earlier years which have been already set off against the income of the assessee- Revenue cannot notionally bring forward any loss of earlier years which has already been set off against other income of the assessee and set off the same against the current income of the eligible business- Fiction created by sub-s. (5) of s. 80-IA does not contemplate such notional set off. In the instant case, admittedly, losses incurred by the assessee have already been set off and adjusted against the profits of the earlier years- There is a positive profit during the relevant year-Therefore, loss or depreciation in the year earlier to initial assessment year already absorbed against the profit of other business cannot be notionally brought forward and set off against the profits of the eligible business- All the authorities below have given a categorical finding that the first yea....
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....it is deleted. This ground of appeal is allowed. Ground No. 2:- On the facts and in the circumstances of the case Ld. JCIT, R-2, Udaipur has erred in disallowing depreciation of Rs. 31,64,509/- in respect of wind power unit at Coimbatore on the basis of assessment order passed for the AY 2009-10. The disallowance of depreciation of Rs. 31,64,509/- i.e. restricting depreciation allowance to Rs. 2,64,77,518/- against claim of the assessee company Rs. 2,96,42,027/- is bad in law and liable to be deleted . Further issue is squarely covered by the decision of Hon'ble ITAT in assessee own case for the AY 2008-09. Ground No. 3:- On the facts and in the circumstances of the case Ld. JCIT, R-2, Udaipur has erred in disallowing depreciation of Rs. 2,03,297/- in respect of wind power unit at sadiya on the basis of assessment order passed for the AY 2009-10. The disallowance of depreciation of Rs. 2,03,297/- i.e. restricting depreciation allowance to Rs. 32,86,157/- against claim of the assessee company Rs. 34,89,454 is bad in law and liable to be deleted. Further issue is squarely covered by the decision of the Hon'ble ITAT in assessee own case for the AY 2008-09. Both....
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....s of the Ld. AO. Keeping into consideration the various case laws of the higher appellate authorities and the Hon'ble Courts I incline to agree with the contention of the appellant that on the facts and circumstances of the case the Ld. AO is not justified in disallowing the total depreciation disallowed Rs. 33,68,166/- is liable to be deleted because the issue was discussed in detail in assessee's case during the appellate proceeding for the asst, year 2008-2009 and it was allowed in appeal No. 72/IT/UDR/2010?4id4de order dt. 28/02/2012, by my predecessor with the following observation :- "depreciation on foundation work and transformer plinth and depreciation on installation and electrical lines etc is held to be allowable at which rate depreciation is allowable on wind mill and therefore disallowance of depreciation made by A. O. on the above items is deleted and this ground of appeal is allowed." Further against the order for the A.Y. 2008-09 the department had filed appeal before the Hon'ble ITAT and the same was dismissed vide ITA. NO.193/JU/2012 order dt. 14/12/2012. The facts and circumstances of the appellant's case are same and identical during the y....