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2018 (12) TMI 526
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.....03.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of Revenue is against the order of CIT(A) allowing the claim of deduction under section 80IA of the Act without considering the brought forward losses have to be adjusted against the current year income before calculating the eligible amount of deduction under section 80IA of the Act. For this Revenue has raised the following three grounds: - "1. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was right in allowing the entire claim of deduction u/s. 80IA of the IT Act. 1961 without appreciating the fact that brought forward losses have to be adjusted against the current year's income ....
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.... calculating the profit for the year under consideration. The assessee replied that section 80IA of the Act as enacted by the Finance Act, 1999 with effect from 1st April, 2000 gives an option to the assessee with effect from 1st April, 2000 to claim relief under this section for any 10 consecutive assessment years out of 15 years beginning from the year ending in which the undertaking or enterprise develops or begins to operate any infrastructure facility etc. Once the assessee has opted for the first year of relief then it continues for further 9 consecutive years. The section mandates that the year in which the relief is claimed under this section for the first time is called as the initial assessment year. This will be the year in which....
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....d under this section for the first time is called as the 'initial assessment year' and that this will be the year in which the undertaking has to be treated as a separate sole source of income within meaning of section 80-IA(5). The assessee has the option to decide the 'initial assessment year' and it snot mandated that the first year of operation of the eligible business has to be taken as initial assessment year' for the purpose of set off of carried forward losses and depreciation. Hence, the provisions of section 80 IA(5) treating undertaking as a separate sole source of income cannot applied to a year prior to the year in which the appellant had opted to claim deductions under this section for the first time. Accor....
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.... per sub-s. (5) of s. 80-IA, profits are to be computed as if such eligible business is the only source of income of the assessee and When the assessee exercises the option, only the tosses of the years beginning from the initial assessment year are to be brought forward and not the losses of earlier years which have been already set off against the income of the assessee and that in that case revenue cannot notionally bring forward any loss of earlier years which has already been set off against other income of the assessee and set off the same against the current income of the eligible business. It was also held that the fiction created by sub-s. (5) of s. 80-IA does not contemplate such notional set off and in the case before Hon'ble Cou....
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....era 67.5 MW power undertaking shall be deemed to be the only source of the income as provided u/s 80IA(5) of the Act only from the assessment year succeeding the assessment year 2002-03 being the initial assessment year and subsequent assessment year up-to and including the assessment year for which the determination is to be made which in any case shall not transgress beyond fifteen years from the year when Jojobera 67.5 MW power generating unit started generating power. We also hold that the notionally brought forward losses/ depreciation of the Jojobera 67.5 MW power generating unit for the period from the assessment year 1997-98 to 2001-02 which are already set off against the other business income in earlier years and set-off being all....
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..... Ltd. (supra), the Court observed as under: "From a readying of the above, it is clear that the eligible business were the only source of income, during the previous year relevant to the initial assessment year and every subsequent assessment years. When the assessee exercises the option, the only losses of the years beginning from initial assessment year alone are to be brought forward and no losses of earlier years which were already set off against the income of the assessee. Looking forward to a period of ten years from the initial assessment is contemplated. 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 in....