TaxTMI 
TaxTMI 
2026 (1) TMI 990
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....taining to Assessment Years2017-18, 2018-19 and 2020-21 respectively, wherein the Ld. CIT(A) has allowed the Appeals filed by the Assessee. 2. Since, the Revenue has raised identical grounds of Appeal, the captioned appeals of the Revenue are heard together and decided in this common order. For the sake of convenience, the Appeal of the Revenue pertaining to Assessment Year 2018-19 is taken as lead matter. 3. The Grounds of Appeal of the Revenue for the Assessment Year 2018-19 reads as under:- "1. Whether the Ld.CIT(A) has erred in facts and in law while deleting the addition of assessee has u/s 80IA of the Act of Rs. 26,22,32,988/- without appreciating the fact that the not set-off brought forward unabsorbed depreciation of ....
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.... wind-based electricity. The Assessee filed its Original return of income on 31.10.2018 declaring income of Rs. 86,35,98,160/- which was revised on 26.03.2019. The case was selected for scrutiny, an assessment order came to be passed u/s 143(3) r.w.Section 144B of the Income Tax Act, 1961 ('Act' for short) by making disallowance of deduction u/s 80-1A of the Act under normal provisions of the Income Tax Act of Rs. 26,22,32,988/-, disallowed u/s 14A of the Act under normal provisions of the Income Tax Act 6,56,442/-, disallowed on account of ICDS application of Rs. 3,29,27,827/- and also disallowed CSR expenses in computing book profit U/s 115B of the Income Tax Act of Rs. 1,45,35,910/-. Aggrieved by the order dated 21/09/2021, Asses....
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.... thatbecause the set off amounts against other income of the assessee in previous years have to be ignored and because of the fiction created in the subsection notionally, the set off losses are to be treated as losses to be carried forward for the purpose of determination of profit of the eligible business/undertaking for the purpose of deduction U/s 80-IA of the Act. 4.2 Further, during the appellate proceedings it is contended by the Appellant that the notional carried forward losses since the year of commencement in eligible undertaking is not in accordance with the provisions of law as clarified by CBDT vide circular No.1/2016. Similar view was also taken by Hon'ble Madras High Court in the case of PCIT Vs. Prabhu spinning....
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....n Section 80IA(5) of the Act is only to determine the period of deduction available for a consequent period of 10/15/20 years. The Ld. CIT(A) observed that the concept of "Initial assessment year" and "First year" is not relevant to the facts of the present case for the relevance to the issue of setting off of (notional) losses of earlier years with the profit of the eligible undertaking/business/enterprises. Further, the Ld. CIT(A) has also considered the CBDT Circular 1/2016 dated 15.02.2016, which it does not address/comment on the issue of setting off of (notional) losses of eligible undertaking/business/enterprises. During the proceedings before the Ld. CIT(A), it was also contended by the Assessee that the notional carried forward los....
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....#39;ble High Court of Delhi in the case of Joint Investment Private Limited Vs CIT (372 ITR 694) and CIT Vs. Holcim India (P) Ltd (2014) 272 CTR 282(Delhi), wherein it was held that disallowance U/s 14A of the Act cannot be more than the exempt income. Thus, sought for dismissal of the Appeal. 9. We have heard both the parties and perused the material available on record. It is well settled law that disallowance u/s 14A of the Act cannot be more than the exempt income as held in the case of Joint Investment Private Limited Vs CIT (372 ITR 694) and CIT Vs. Holcim India (P) Ltd (2014) 272 CTR 282(Delhi). In view of the above, we find no merit in the Ground No. 4 of the Revenue. Accordingly, Ground No. 4 of the Revenue is dismissed. 10. ....