2018 (5) TMI 516

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....ai -I, (ITAT, for brevity) in I.TA.No.669/MDS 2006, for the assessment year 2002-03. 3. The Appeal is admitted on the following substantial question of law:- "Whether on the facts and circumstances of the case, the ITAT was right in its interpretation holding that depreciation on wind mills, which had been already adjusted for the assessment years 1995-1996 and 1996-97, against the profits of printing business could artificially be carried forward for the impugned assessment year for the purpose of denial of relief under Section 80 IA read with Sections 80 AB and 80 IA (7), 72 of the Income Tax Act" 4. We need not labour much to decide the question framed for consideration, as, in the assessee's own case, for the earlier assessment ....

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....mplated. It does not allow the Revenue to look backward and find out if there is any loss of earlier years and bring forward notionally even though the same were set off against other income of the assessee and the set off against the current income of the eligible business. Once the set off is taken place in earlier year against the other income of the assessee, the Revenue cannot rework the set off amount and bring it notionally. A fiction created in sub-section does not contemplates to bring set off amount notionally. The fiction is created only for the limited purpose and the same cannot be extended beyond the purpose for which it is created. 19. In the present cases, there is no dispute that losses incurred by the assessee were alrea....

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.... finding of the fact noticed by the Commissioner of Income-tax (Appeals), which has not been disturbed by the Tribunal and challenged before us, there was no error much less any error apparent on the face of the record which could be rectified. That question would have been germane only if thee would have been carry forward of unabsorbed depreciation and unabsorbed development rebate or any other unabsorbed losses of the previous year arising out of the priority industry and whether it was required to be set off against the income of the current year. It is not at all required that losses or other deductions which have already been set off against the income of the previous year should be reopened again for computation of current income und....

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.... 154 to support this case and the same reads as follows: "Clause 30(iii). In computing the quantum of 'tax holiday' profits in all cases, taxable income derived from the new industrial units, etc., will be determined as if such units were an independent unit owned by a taxpayer who does not have any other source of income. In the result, the losses, depreciation and investment allowance of earlier years in respect of the new industrial undertaking, ship or approved hotel will be taken into account in determining the quantum of deduction admissible under the new section 80-I even though they may have been set off against the profits of the taxpayer from other sources." 22. We are not agreeing with the counsel for the Revenue. We ....