TaxTMI 
TaxTMI 
2014 (5) TMI 1127
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....tances of the case, the definition of "Initial Assessment Year" as given in Section 80IB(14) of the Act is not applicable in the provision of Section 80IA of the Act. 4. The order of the AO be restored and that of the CIT(A) be vacated. 2. The facts as well as issues are identical in both the assessment years hence, both these appeals are disposed off by this common order. The solitary issue is in respect of the initial assessment year for claiming the deduction u/s. 80IA(4)(iv)(a) of the Income-tax Act. The facts which are revealed from the record as under. The assessee company is engaged in the manufacturing of automobile components. The assessee also have the Windmills from which the power is generated. The assessee claimed the deduction u/s. 80IA(4)(iv)(a) of the Income-tax Act of Rs. 13,83,980/- and Rs. 63,27,017/- in the A.Ys. 2009-10 and 2010-11 respectively. In the opinion of the Assessing Officer, the profits and gains from the power generation which is the eligible business is to be computed as if the assessee's only source of income is from eligible business. The Assessing Officer rejected the claim of the assessee towards the deduction u/s. 80IA(4)(iv)(a) by workin....
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.... and has accordingly worked out and carried forward the losses of the eligible business in the subsequent years including the years under appeal. The A.O. has, therefore, held that no profit of the eligible business is available for claiming deduction u/s 80IA of the Act. The appellant has claimed that as per provisions of Section 80IA(2) of the Act, the deduction can be claimed at the assessee's option for any ten consecutive assessment years out of the fifteen years from the year in which the undertaking started generating power. The appellant therefore claimed that the Legislature has not intended that the initial assessment year is to be the first year of operation, but the assessee has option to select initial year not falling beyond the fifteen assessment years starting from the previous years in which the undertaking begins power generation. This contention of the appellant is supported by the decision in the case of Mohan Breweries & Distilleries Ltd. Vs. CIT (2008) 116 ITD 241 (Chennai) - wherein it has been laid down that losses pertaining to the period prior to the initial assessment year opted by the assessee shall not be taken into consideration for calculating the....
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....the assessee chooses to claim deduction u/s.80IA and if it has not chosen to claim the deduction u/s. 80IA, section 80IA(5) cannot be made applicable. In the instant case there was a categorical finding by the assessing officer and the Commissioner (Appeals) that the first year claimed by the assessee was from the assessment year 2004-05. Since the assessee had opted to claim this deduction only in the assessment year, the initial assessment year could not be the year in which the undertaking commence its operation and in the instance case, the initial assessment year was the assessment year in which the assessee has chosen to claim deduction u/s.80IA. Hence, the provision of section 80IA(5), treating undertaking has a separate sole source of income, could not be applied to a year prior to the year in which the assessee opted to claim relief u/s.80IA for the first time. Further, depreciation and carry forward loss relief to the unit which claims deduction u/s.80IA cannot be nationally carried forward and set off against the income from the year in which the assessee started claiming deduction u/s.80IA. Therefore there was no question of setting off nationally carried forward ....
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....e is in appeal before us. 5. We have heard the parties. We find that the issue stands squarely covered in favour of the assessee by the decision of the Hon'ble High Court of Madras in the case of Velayudhaswamy Spinning Mills (P) Ltd. Vs. ACIT 38 DTR 57 (Mad) as well as the decision of the ITAT, Pune in the case of Serum International Ltd. Vs. Addl. CIT, Range-6 ITA Nos. 290 to 292/PN/2010 dated 20-09-2011. 6. In the case of Serum International Ltd. (supra) the Tribunal has held 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 of Section 80IA(5) of the Act has been decided in favour of the assessee by the Pune Bench of the Tribunal in the case of Poonawalla Stud and Agro Farm Pvt. Ltd. Vs. ACIT (Supra). In that case after discussing the issue in detail, the Tribunal has come to the conclusion that the initial 'A. Y' for the purpose of claiming deduction u/s. 80IA was the first year in which the assessee claimed the deduction u/s. 80IA (1) after exercising his option as per the provisions of 80IA (2) of the Act. It was held that the Ld. CIT(A) has erred in h....
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....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 issue under almost similar facts, hold that when the assessee exercising the option, only the losses of the year beginning from the initial A. Y. are to be brought forward and not the losses of earlier year which have been already set off against the other income of the assessee. The revenue cannot notionally bring forward any loss of earlier years which has already been set off against any other income of the assessee and set off the same against the current income of the eligible bus....