TaxTMI 
TaxTMI 
TaxTMI 
2010 (9) TMI 1080
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....ncurred for construction of cafeteria amounting to Rs. 23,00,000 as referred in ground No. 1 above which allows the appellant the right to use the lounge/cafeteria as per the terms of agreement with RWITC as per Appendix I, Part B namely, 'intangible assets' eligible for depreciation @ 25 per cent. 3. Holding that the past losses of the undertaking entitled to claim deduction under s. 80-IA which have been set off in the earlier years should have been set off against the profit of the said undertaking for the current year and only on the balance income, the deduction under s. 80-IA was to be allowed to the assessee. 4. The learned CIT(A) erred in not appreciating that in view of the provisions of s. 80-IA(5) of the IT Act, 1961 the profit from the eligible business for the purpose of deduction under s. 80-IA of the Act need not be computed after deduction of the notional brought forward losses and depreciation of eligible business which have been set off against other income in earlier years." 2. Briefly stated, relevant facts of the case are that assessee is engaged in breeding of livestocks (horses). Assessee filed the return of income declaring the total income of Rs. 73,93,1....
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....which is 1/4th of Rs. 92,00,000 is capital in nature. Accordingly, addition was made by the AO and the said addition was sustained by the CIT(A). Aggrieved with the same, assessee filed the impugned appeal with this issue. During the proceedings before us, learned counsel for the assessee has taken us through para 2.3 of the impugned order and read out the following portion: "It is again an undisputed fact that in case of Serum Institute of India Ltd., which is assessed to tax in Range-6, Pune, an amount of Rs. 23 lakhs which is borne by Serum Institute of India Ltd., out of Rs. 92 lakhs is allowed as revenue expenditure under s. 143(3); in case of appellant it is held as capital expenditure and no depreciation be allowed of such expenditure and in case of other two entities, there is no scrutiny assessment and, therefore, the claim of the assessee is accepted without scrutiny." 5. Basing on the above, learned counsel argued stating that Rs. 23,00,000 each was paid by the four companies of the Poonawala Group and the said amount was allowed as a revenue expenditure in the case of Serum Institute of India Ltd. during the scrutiny proceedings under s. 143(3) of the Act. Further, th....
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....in the following year; where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year." 7. We also found that the impugned sum of Rs. 23,00,000 is part and parcel of the total payment of Rs. 92,00,000. The facts of the issue involved in Serum Institute of India Ltd. and the present assessee are one and the same. Revenue did not make out any case to demonstrate that the claims in the cases of the assessee and other three assessees including Serum Institute of India Ltd. are different or distinguishable. Considering the homology of the facts, commonality of the agreement and the contents thereof, benefits arrived by the impugned four concerns, we are of the opinion that the rule of consistency is violated within the meaning of the ratio decidendi in the case of Radhasoami (supra). Therefore, on this reasoning, the assessee is also entitled for making claim of deduction without going to the merits of the issue raised in the appeal. Accordingly, ground....
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.... are : (i) The provisions of s. 80-IA(2) provide option to the assessee for starting claiming any 10 consequtive assessment years out of 15 years. In this regard, the counsel mentioned that 10 out of 15 years is given for exercising the option by the assessee. He further mentioned that once assessee opted to claim from that assessment year, it has to be continuous and assessee cannot jump the assessment years for one reason or the other. (ii) The definition provided in the pre-amended s. 80-IA(12C) also provides for some question of such option. (iii) Sub-s. (5) of s. 80-IA will come into operation only after the assessee exercises his option of selecting initial assessment year. (iv) The computation of income on standalone basis envisaged in sub-s. (5) will apply after the initial assessment year as per sub-s. (2) of s. 80-IA is exercised. 12. Next assessee's counsel relied on various citations for the proposition for various propositions including that the assessee has option to choose the 'initial assessment year'. On the other hand, the learned Departmental Representative for the assessee relied on the orders of the Revenue and stated that the AO has an authority to alter ....
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....ears'. Starting assessment year for counting the duration of fifteen years is also provided in the said sub-section. As per these provisions, the assessee is not allowed to jump the assessment year once an initial assessment year is opted. Therefore, we find no fault with the assessee in selecting the asst. yr. 2004-05 as the 'initial assessment year'. In this regard i.e., on the issue of assessee's option to select the 'initial assessment year', we have perused the citations relied upon by the assessee's counsel. The conclusion by the Tribunal Mumbai Bench decision in ITA No. 4620/Mum/2007 (asst. yr. 2004-05) in the case of Dy. CIT v. Ushdev International Ltd., is straight on this issue of initial assessment year and the option to the assessee and the held portion of the decision reads as under : "In view of the above learned CIT(A)'s order to the extent of holding that initial assessment year and subsequent succeeding assessment years can only be considered for the purpose of computing deduction under s. 80-IA. Coming to the facts of the case, however, as seen from the schedule of details available in the learned CIT(A)'s order the assessee has incurred losses in the asst. yrs. ....