2019 (1) TMI 1963

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....ently, a revised return was filed declaring total income of Rs. 14,71,45,097/-. In the assessment, the AO made certain disallowances viz., (1) Disallowance u/s.14A amounting to Rs. 1,41,23,169/-; (2) Disallowance of unexplained expenses amounting to Rs. 83,02,973/-; and (3) Disallowance of deduction u/s.80IA amounting to Rs. 3,18,33,046/-. Thus, in effect, the AO assessed the total income at Rs. 20,14,04,290/-. 3. Aggrieved with the said assessment, the assessee filed an appeal before the CIT(A). However, the assessee remained unsuccessful before the First Appellate Authority. Now, against the order of First Appellate Authority, the assessee has come up in appeal before the Tribunal. 4. Before us, Ld. Counsel for the assessee did not ....

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....relying on the Karnataka High Court judgment in the case of Microlabs Ltd. Vs. ACIT 230 Taxman 647, CIT(A) confirmed the decision of the AO on this issue. Aggrieved, the assessee is in appeal. 6. Before us, on this issue, Ld. AR submitted the manner of quantifying the allowable deduction u/s.80IA(4) is not in tune with the settled ratio of the binding judgments. Assessee objected to the manner of carry forward of losses notionally to eat away the profit of the year. In this regard, Ld. Counsel for the assessee relied on the judgment of Hon'ble Jurisdictional High Court in the case of CIT Vs. Hercules Hoists Ltd where the Hon'ble Court held that "Eligible business is only source of income, during previous year relevant to initial assessme....

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....on'ble Karnataka High Court in the case of Microlabs Ltd. Vs. ACIT (supra) 8.1 Assessee contested the same holding that the provisions of section 80IA(4) and 80IA(5) allows the computation on standalone basis. If the conclusions of the AO is considered favourably, it defeats the purpose of provisions of section 80IA(4) and 80IA(5) read with umpteen decisions on this subject including the Tribunal's decision in the case of Poonawala Estate Stud & Agro Farm (P) Ltd. Vs. ACIT 136 TTJ 236 (Pune). 8.2 We find that there is no dispute on the fact that the assessment year 2009-10 is the initial assessment year in the hands of Kirloskar Oil Ltd. The dispute is only with respect to the manner of computation of deduction qua the set off of carr....