TaxTMI 
TaxTMI 
2017 (8) TMI 474
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....to the 2nd issue of claim of disallowance of depreciation amounting to Rs. 66,35,717/- while computing the deduction allowable u/s.80IA (4) (iii) of the Act. 3. Briefly stated relevant facts are that the assessee is a Promoter, engaged in the business of development of residential and commercial properties. He is also in the business of running windmills. During the assessment proceedings, the AO noticed that the assessee installed tall windmills in Dhule, Maharashtra relevant to the Assessment Year 2007-08. Assessee incurred losses from the Assessment Years 2007-08 to 2009-10 and the same was set off against the other income from the other ineligible units. In the year under consideration, assessee opted 2010-11 as the initial assessment ....
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....Circular No.01/2016 dated 15-02-2016 in support of the assessee's claim of initial assessment year and the manner of computation of losses of the eligible units against the other income earned from the ineligible units of the assessee. CIT(A) did not agree with the submissions of the assessee. Regarding the first issue contents of Para No.4.1 is relevant. On this issue, CIT(A) opined that the said decision of the Pune Bench of the Tribunal and the judgment of the Hon'ble Madras High Court cited (supra) is on the initial assessment year and not relating to the issue of set off of losses. CIT(A) has given the following reasoning while deciding the first issue. For the sake of completeness relevant lines are extracted as under : "4.1 . . . .....
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.... the case of M/s. Poonawalla Estates Stud & Agro Farm Pvt. Ltd. (supra), the appeal deals with the manner of computation of losses, and also the option of the assessee in matters relating to "initial assessment year". CIT(A) erred in mentioning that the AO agreed 2010-11 as the "initial assessment year" which is not borne on the facts. In the current case, AO is of the opinion that 2007-08 is the initial assessment year and thereby the option of the assessee in chosing the initial assessment was denied completely. First Appellate authority did not appreciate the fact that the claim of losses/brought forward losses against the other income of the ineligible units of the assessee which is intrinsically linked that leads the assessee to chose ....
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....assessment year for the above purposes is the first year in which the assessee claimed deduction u/s.80IA(1) after exercising the option as per the provisions of sec. 80IA(2)." 10. The above view of the Tribunal was approved by the Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills Pvt. Ltd. Vs. ACIT (supra). Therefore, the CIT(A) has not properly appreciated the said decision (supra). In the remand proceedings, CIT(A) is directed to consider the existing legal position on the issue under consideration and allow the claim of the assessee in accordance with law. Assessee shall be given reasonable opportunity of being heard to the assessee in accordance with the principles of natural justice. In the process, we find ther....
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....eed to extract relevant lines of the said para (Page 14) and the same reads as under : "7. . . . . . . . . . . . . . . . . . . . . . . . Thus for the purpose of deductions under Chapter VI-A, the gross total income has to be computed by claiming deduction allowable under sections 30 to 43D of the Act and the assessee cannot claim a double advantage, i.e. in the subsequent years for claiming deduction u/s.80IA(4)(iii), the assessee should claim deduction after reducing depreciation irrespective of the amount claimed as the total income. Hence, in view of the foregoing discussion, and in the light of the decision of the jurisdictional High Court in the case of Plastiblends India Limited (supra), the appellant's claim of deduction u/s.....