TaxTMI 
TaxTMI 
2020 (4) TMI 364
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....rdingly, the ground No. 1 raised by the assessee is dismissed as not pressed. 4. Ground Nos. 2 and 3 raised by the assessee challenging the action of CIT(A) in confirming the order of AO on account of benefit under Sales Tax is not eligible for deduction u/s. 80IA(i) of the Act. 5. Heard both parties and perused the material available on record. We find that this issue was decided by this Tribunal against assessee in assessee‟s own case vide its order dated 22-04-2019 passed in ITA No. 1634/PUN/2017 for A.Y. 2003-04 wherein the assessee raised similar issue challenging the action of CIT(A) in holding that the Sales Tax benefit is not eligible for claiming deduction u/s. 80IA(i) of the Act. This Tribunal by placing reliance on the order dated 07-09-2018 in assessee‟s own case for A.Ys. 2006-07 to 2008-09 dismissed grounds raised by the assessee in challenging the action of CIT(A) in confirming the order of AO in denying deduction u/s. 80IA of the Act in respect of Sales Tax benefit is not eligible business income u/s. 80IA of the Act. We find the facts and circumstances in the year under consideration are similar and identical to the facts and circumstances in A.Y.....
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....on 80-IA(5) of the Act. Similar issue arose before the Tribunal in the case of Shri Sangram Patil vs. ITO in ITA No.177 & 178/PN/2011 relating to assessment year 2006-07 & 2007-08 vide dated 12.12.2012. The Tribunal considered the provisions of section 80-IA(5) of the Act and observed as under :- "5. The bone of contention between the assessee and the Revenue is with regard to the provisions of section 80-IA(5) of the Act. Section 80- IA(5) of the Act creates a fiction that for the purpose of computing deduction u/s 80-IA of the Act, it was to be presumed that the eligible unit was only the source of income of the assessee during the previous year relevant to initial assessment year and also to every subsequent year upto and including the assessment year for which the determination is to be made." 8. The Tribunal further referred to the ratio laid down by another Bench of the Tribunal in the case of Serum International Ltd. vs. Addl.CIT (supra) in para 6 and observed as under :- "6. Before us, the learned counsel for the assessee has submitted that the Pune Bench of the Tribunal in the case of Serum International Ltd. Vs. Addl. CIT Range 6, Pune in ITA No....
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....case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra). He submitted that the decision of Hon‟ble Madras High Court will prevail upon the decision of the Special Bench of the Tribunal in the case of ACIT Vs. Goldmine Shares and Finance (P) Ltd. (Supra) followed by the Pune Bench of the Tribunal in its recent decision in the case of Prima Paper Engg (P) Ltd. Vs. ITO (Supra) and there the assessee did not dispute the fact that the authorities below have decided the issue following the decision of Special Bench of the Tribunal in the case of ACIT Vs. Goldmine Shares.. The Ld. A.R. pointed out that decision of Hon‟ble Madras High Court in the case of Velayudhaswamy Spinning Mills (P) Ltd Vs. ACIT (Supra) was not cited before the Pune Bench in the case of Prima Paper Engg (P) Ltd. Vs. ITO (Supra). The Ld. A.R. has also cited the decision of Pune Bench of the Tribunal in the case of ACIT Vs. Aurangabad Holiday Resorts (P) Ltd., (Supra) holding that even a decision of nonjurisdictional High Court is a binding precedent for the Tribunal until a contrary decision is given by any other competent High Court. Similar view has been expressed by the Hon‟ble Bombay High ....
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....e rejected in view of the overriding provisions of Sub-section (5) of Section 80IA of the Act. 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 holding that the initial A.Y for the purposes of Section 80IA(2) r.w.s. 80IA (5) was the year in which the assessee started generating electricity from the wind mill activity. We also find that the issue raised in Ground No. 2 regarding the eligibility of the assessee to claim deduction u/s. 80IA undiminished by unabsorbed losses and depreciation also set off in earlier years against the other income,....
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.... 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 business. We thus set aside the orders of the authorities below and direct the A.O to allow the claimed deduction u/s. 80IA without bringing the notionally brought forward any loss or depreciation of earlier years which has already been set off against other income of the assessee. The decision of Pune Bench of the Tribunal in the case of Prima Paper Engineering P.Ltd. Vs. ITO (Supra) ....
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....e, we find that the controversy before us is no longer res integra and is in fact covered in favour of the assessee by the decision of Pune Bench of the Tribunal in the case of Serum International Ld. (supra) which has been decided following the decision of the Hon‟ble Madras High Court in the case of Velaydhaswamy Spinning Mills (P) Ltd. (supra)." 10. The facts and circumstances of the present case are identical to the facts before the Tribunal in the case of Shri Sangram Patil vs. ITO (supra). The assessee during the year under consideration had claimed deduction under section 80-IA(5) of the Act. The Assessing Officer had tabulated the notional losses from year to year at page 9 of the assessment order. However, the said losses were being adjusted against the other income arising to the assessee from time to time. Where the losses have already been adjusted against assessable income in the preceding year, the said losses cannot be said to be available to be adjusted against the income of the assessee arising in the year under consideration. 11. The second aspect of the issue is the year from which the said losses are to be considered. As held by the Tribu....