TaxTMI 
TaxTMI 
2016 (3) TMI 914
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....of the Bombay High Court in the case of CIT Vs. Thane Electricity Supply Ltd. reported in 206 ITR 727 ? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in allowing deduction u/s.80IA(4) by considering the initial assessment year for the purpose of claiming deduction u/s.80IA(4) of the Act, is the first year in which the assessee claimed deduction u/s.80IA(iv)(4) for ignoring the operation of Sec. 80IA(5) of the I.T. Act, 1961 ? 4. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 3. Facts of the case, in brief, are that the assessee is engaged in the business of manufacturing of rubber items as well as energy generation business. It filed its return of income on 06-10-2010 declaring total income of Rs. 6,10,14,820/-. 4. During the course of assessment proceedings the A.O. observed that the assessee company owned four Windmills on which the assessee company has claimed deduction u/s. 80IA of the Income-tax Act for an amount of Rs. 38,88,733/-. The assessee company had opted to claim the deduction u/s 80IA for the first time in A.Y. 2009-10 which was the "initial year". The deta....
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....O, section 80IA(5) creates a fiction, as per which while computing the deduction from initial year onwards, it has to be computed as if the eligible business is the only business of the assessee. As per AO the losses of the eligible business of even prior to the first year of claim of deduction has to be notionally brought forward, if not already set off, against the income of eligible business while computing the deduction. The A.O. further observed that after adjusting brought forward losses of Wind Mill Unit of earlier years, there was no profit left and therefore in this year the assessee is not entitled for deduction u/s 80IA(4) of the I.T. Act. Thus, as per see. 80IA(5) of the I.T. Act, for the purpose of computing the income of the eligible unit, it has to be treated as if such unit was the only source of income of the assessee. Rejecting the various decisions cited before him, the AO disallowed the deduction of Rs. 38,88,733/- claimed by the assessee company u/s 80IA of the Income-tax Act, 1961. The claim of the assessee that sec. 80IA(5) will operate from the 1st year of claim and not from the year of commencement of eligible business even when business commences prior to ....
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....l before us. 11. The Ld. Departmental Representative strongly opposed the order of the CIT(A). Referring to the statement of facts filed by the Revenue, the Ld. Departmental Representative drew the attention of the Bench to the following part of the statement of facts filed by the revenue as to why the order of the CIT(A) is not acceptable : "(i) The Ld.CIT(A) has ignored the decision of Special Bench of ITAT, Ahmedabad in the case of Goldmine Shares and Finance Pvt. Ltd. (Supra) wherein it is held that the profit from the eligible business, for the purpose of determination of quantum of deduction u/ s.801A, has to be computed after deduction of the notional brought forward loss and depreciation of eligible business even though it has been allowed set off against other income in the earlier years. (ii) The Department has not accepted the Hon'ble ITAT, Pune's decision given in the case of M/s. Serum International Ltd. for A.Y. 2008- 09 on similar issue and appeal has been filed before the Hon'ble High Court, Bombay. (iii) The Department has not accepted the decision given in the case of M/s Advik Hi-Tech Pvt. Ltd for A.Y. 2008-09 on similar ....
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....r of Ld.CIT(A) be reversed and that of the AO be restored. 12. The Ld. Counsel for the assessee on the other hand referring to the series of decisions filed in the paper book submitted that the issue stands decided in favour of the assessee after considering all the points raised by the Ld. Departmental Representative. 13. We have considered the rival submissions made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We find the issue of initial assessment year as per provisions of section 80IA(5) has been decided in favour of the assessee by the decision of the Hon'ble Madras High Court in the case of Vellayudhaswamy Spinning Mills Pvt. Ltd., (Supra). Following the above decision the Pune Bench of the Tribunal in the case of Serum International Ltd. Vs. ACIT vide ITA Nos. 290 to 292/PN/2010 order dated 20-09-2011 for A.Yrs. 2004-05 to 2006-07 has decided the issue in favour of the assessee and dismissed the appeal filed by the revenue by observing as under: "13. Having been considered the above submissions, we find that the issue raised in Ground No. 1 as to what would be the initial A.Y for the purposes o....
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....he case of Commissioner of Central Excise Vs. Valson Dyeing, Bleaching and Printing Works (Supra) wherein the Hon'ble Bombay High Court has been pleased to hold in a case of excise matter that Tribunal is bound by the decision of High Court , even of a different State, so long as there is no contrary decision of any other High Court. The Hon'ble Bombay High Court has been pleased to hold further that the Tribunal had no option but to follow the judgment of the Madras High Court. An authority like an Income Tax Tribunal acting anywhere in the country has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court on that question. We thus respectfully following the ratio laid down by the Hon'ble jurisdictional High Court in the case of Commissioner of Central Excise Vs. Vakson Dyeing, Bleaching and Printing Works (Supra) hold that the Tribunal is bound by the decision of the Hon'ble Madras High Court on an identical issue in the case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra). We thus respectfully following the decision taken by the Hon'ble Madras High Court in that case on an identical ....