TaxTMI 
TaxTMI 
2019 (5) TMI 940
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....sment. AO noticed that assessee has claimed heavy depreication on the windmill, and because that it has made losses from the undertaking, and therefore, it could not claim any deduction under section 80IA(4) of the Act. From the details submitted, it was noticed by the AO that assessee has unabsorbed depreicaiton and brought forward losses from the windmill during the first three years of its operation, which was sought to be set off against the profit of other business. This claim of the assessee was rejected by the AO on the ground that as per the provisions of secion 80IA(4) such losses/unabsorbed depreciaon can be allowed only agisnt eligible business income. In other words, losses/unabsorbed depreciation can be set off against the income generated from wind-mill only. The ld.AO, accordingly, disallowed the claim of the assessee and added the same to the income of the assessee. Aggrieved by the action of the AO, the assessee went in appeal before the ld.CIT(A), who after considering the issue in detail and following the decision of his predecessor taken on similar issue in the Asstt.Year 2011-12, deleted the disallowance. Thus, Revenue is before the Tribunal against this delet....
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.... From the perusal of the assessment order it is seen that there is no discussion and finding of the A.O in respect of the disallowance of deduction u/s. 80G of the Act. Hence, disallowance to the extent of Rs. 1,60,568/- is directed to be deleted since factually incorrect. In respect of deduction of Rs. 41,97,875/- u/s. 80IA(iv) of the Act, the A.O has disallowed the same in view of the provisions of Sec.80IA(5) of the Act, which reads as under:- "Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year .relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made." Thus, sub-section (5) of Section 80IA of the Act provides for the quantum of deduction u/s. 80IA(1) ....
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....ts of the case and the option exercised by the assessee, the year of claim also can be considered as initial assessment year. The Court further held that where the earlier depreciation and losses have already been set off, those loss and depreciation do not go to reduce the gross total income of an assessee within the meaning of section 80AB and, therefore, bringing the notional concept of carrying forward and set-off will be contrary to the scheme of section 80AB and concept of gross total income. Following the aforesaid judgment, assessing authority was to be directed to grant deduction to the assessee under section 80-IA for the quantum claimed by the assessee without diluting the same by the notional deduction of earlier loss and depreciation. On the other hand, the reliance placed by the. A.O. on the decision in the case of Liberty India Ltd. Vs. CIT 317 ITR 218 (SC) is not relevant to the facts of the present case and since direct judgments applicable to the facts of the appellant's case are available, the same are followed. Considering the facts and the legal decisions relied upon by the appellant, I am inclined to accept the same and the A.O. is directed to delete t....
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....ted or starts operating and maintaining the infrastructure facility on or after the 1st April, 1995. (5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of subsection (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made." 17. From a reading of sub-section (1), it is clear that it provides that where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in subsection (4), i.e., referred to as the eligible business, there shall, in accordance with and subject to the provisions of the section, be allowed, in computing the total income of the assessee, a deduction of an amount equal ....
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....essee, 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. In the present cases, there is no dispute that losses incurred by the assessee were already set off and adjusted against the profits of the earlier years. During the relevant assessment year, the assessee exercised the option under section 80-IA(2). In Tax Case Nos. 909 of 2009 as1 well as 940 of 2009, the assessment year was 2005-06 and in Tax Case No. 918 of 2008 the assessment year was 2004-05. During the relevant period, there were no unabsorbed depreciation or loss of the eligible undertakings and the same were already absorbed in the earlier years. There is a positive profit during the year. The unreported judgment of this court cited supra considered the scope of subsection (6) of section 80-1, which is the corresponding provision of sub-section (5) of section 80-IA. Both are similarly worded and, therefore, we agree entirely with the Division Bench judgment of this court cited su....