The Asstt.CIT Cir.1, Aurangabad, Aurangabad v. Laxmi Rikshaw Body Pvt.Ltd.,, Aurangabad

ITA 424/PUN/2012 | 2006-2007
Pronouncement Date: 30-07-2013 | Result: Dismissed

Appeal Details

RSA Number 42424514 RSA 2012
Assessee PAN AAACL5650Q
Bench Pune
Appeal Number ITA 424/PUN/2012
Duration Of Justice 1 year(s) 4 month(s) 29 day(s)
Appellant The Asstt.CIT Cir.1, Aurangabad, Aurangabad
Respondent Laxmi Rikshaw Body Pvt.Ltd.,, Aurangabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-07-2013
Assessment Year 2006-2007
Appeal Filed On 01-03-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE: SHRI G. S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO S . 421 422 424 & 425 / P N/ 20 12 ASSESSMENT YEAR S : 2004 - 05 2005 - 06 2006 - 07 & 2008 - 09 THE ASSTT. COMMISSIONER OF INCOME TAX CIRCEL - 1 AURANGABAD VS. LAXMI RIKSHAW BODY PVT. LTD. E - 38 - 1 MIDC CHIKALTHANA AURANGABAD (APPELLANT) (RESPONDENT) PAN NO. AAACL5650Q APPELLANT BY: MS. ANN KAPTHUAMA RESPONDENT BY: SHRI NIKHIL PAT HAK DATE OF HEARING : 04 - 07 - 2013 DATE OF PRONOUNCEMENT : 30 - 07 - 2013 ORDER PER BENCH : - THIS BATCH OF FOUR APPEALS ARE FILED BY THE REVENUE CHALLENGING THE IMPUGNED COMMON ORDERS OF THE LD. CIT(A) AURANGABAD DATED 20 - 12 - 2011 FOR THE A.YS. 2004 - 05 2005 - 06 2006 - 07 AND 2008 - 09. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL WHICH ARE COMMON IN ALL THE APPEALS: 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS CORRECT IN INTERPRETING THE PROVISION OF SECTION 80IA(5) IN THE LIGHT OF DECISION IN THE CASE OF M/S. HYDERABAD CHEMICALS SUPPLIES LTD. APIE BALANAGAR HYDERABAD - 37 VS. THE ACIT CIRCLE 1(4) HYDERABAD DATED 21 ST JANUARY 2011 . 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS CORRECT IN I NTERPRETING INITIAL ASSESSMENT YEAR. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE DEFINITION OF INITIAL ASSESSMENT YEAR AS GIVEN IN SECTION 80IB(14) OF THE ACT IS NOT APPLICABLE IN THE PROVISION OF SECTION 80IA OF THE ACT. 4. THE ORDER OF THE AO BE RESTORED AND THAT OF THE CIT(A) BE VACATED. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE MANUFACTURING OF AUTOMOBILE COMPONENTS AS WELL AS E LECTRICITY GENERATION. THE ISSUE IN CONTROVERSY BEFORE US IS THAT THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 2 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD 80IA IN RESPECT OF THE PROFIT DERIVED FROM THE WIND MILL ELECTRICITY GENERATION. T HE CASE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER WRONGLY APPLIED THE PROVISIONS OF SEC. 80IA(5) OF THE INCOME - TAX ACT FOR DECIDING THE INITIAL ASSESSMENT YEAR FOR CLAIMING THE DEDUCTION U/S. 80IA( 4 ) OF THE ACT. IN VIEW OF THE ASSESSING OFFICER AS PER THE PROVISIONS OF SEC. 80IA(5) FOR DECIDING THE QUANTUM OF DEDUCTION INCOME OF THE UNDERTAKING IS T O BE COMPUTED SEPARATELY FOR EACH YEAR BY ALLOWING DEPRECIATION AND OTHER EXPENSES AND LOSSES OF THE UNITS EVEN THOSE ARE SET OFF AGAINST INCOME FROM OTHER BUSINESS IN ANY PRECEDING YEARS. IN THE OPINION OF THE ASSESSING OFFICER FOR THE PURPOSE OF COMPUT ATION OF DEDUCTION U/S. 80IA OF THE UNIT LOSSES OF THE WIND MILL UNIT MAY BE PERTAINED TO THE PRECEDING YEARS WHICH ARE OTHERWISE S ET OFF AGAINST THE INCOME OF THE OTHER BUSINESS ARE TO BE NOTIONALLY CARRIED FORWARD AND IS TO BE SET OFF AGAINST THE PROFIT OF THE ELIGIBLE UNIT FOR THE SUBSEQUENT YEARS. THE ASSESSING OFFICER RELIED ON THE DECISION OF THE HON'BLE SPECIAL BENCH IN THE CASE OF ACIT AHMEDABAD VS. GOLDMINE SHARES & FINANCE (P) LTD. 113 ITD 209 (AHD.) (SB). THE ASSESSING OFFICER THEREFORE NOTI ONALLY BROUGHT FORWARD THE LOSSES OF THE PRECEDING YEARS I.E. ASSESSMENT YEARS 2002 - 03 2003 - 04 AND SET OFF THE SAME AGAINST THE PROFIT FOR THE A.Y. 2004 - 05 ONWARDS . 3. WHEN THE MATTER REACHED BEFORE THE LD. CIT(A) IT WAS HELD THAT THE ASSESSING OFFICE R WAS NOT JUSTIFIED IN DISALLOWING THE DEDUCTION TO THE ASSESSEE U/S. 80IA(IV)(A) CLAIMED BY THE ASSESSEE AT RS.12 05 997/ - RS.21 87 505/ - RS. 24 92 798/ - & RS.18 80 077/ - FOR A.YS. 2004 - 05 2005 - 06 2006 - 07 & 2008 - 09 RESPECTIVELY. THE LD. CIT(A) ALLOWE D THE GROUNDS TAKEN BY THE ASSESSEE AND ALLOWED THE CLAIM OF THE ASSESSEE IN ALL THE FOUR ASSESSMENT YEARS BEFORE US AND HENCE THE REVENUE IS IN APPEAL BEFORE US. 3 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD 4. WE HAVE HEARD THE PARTIES. THE LEARNED COUNSEL SUBMITS THAT SO FAR AS A.Y. 2004 - 05 IS CONCERN THERE IS A MISTAKE IN COMPUTATION OF THE BROUGHT FORWARD LOSSES. HE FURTHER SUBMITS THAT THE ISSUE HAS ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08 . T HE LEARNED COUNSEL FILED COPY OF THE TRIBUNAL DECISION IN ITA NO. 134/PN/2011 DATED 30 - 03 - 2012 IN ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08 WHICH IS PLACED ON RECORD. HE FURTHER SUBMITS THAT SO FAR AS A.Y. 2004 - 05 IS CONCERNED AS THERE IS A RESIDUE OF THE UNABSORBED LOSSES/DEPRECIATION BROUGHT FORWARD IN RESPEC T OF THE WIND MILL UNIT HENCE THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION IN THE A.Y. 2004 - 05. HE FURTHER SUBMITS THAT THE ASSESSEE HAS FILED THE APPLICATION RAISING THE ADDITIONAL GROUND CHALLENGING THE LEGALITY AND VALIDITY OF THE ASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER MORE PARTICULARLY IN THE A.Y. 2004 - 05. 5. THE ASSESSEE HAS FILED THE APPLICATION INVOKING THE RULE 2 7 OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1962 RAISING THE FOLLOWING GROUNDS: 1. THE ASSESSEE SUBMITS THAT THE LEARNED CIT(A) ERRED IN HOLDING THAT THE REOPENING OF ASST. U/S. 148 WAS VALID WITHOUT APPRECIATING THAT THE NOTICE ISSUE U/S. 148 WAS BAD IN LAW AND ACCORDINGLY THE REASST. B E DECLARED NULL AND VOID. 2. THE ASSESSEE SUBMITS THAT THE REOPENING IS BAD IN LA W ON ACC O UNT OF THE FOLLOWING REASON THAT THE ASST. U/S. 143(3) WAS COMPLETED AND THE REOPENING IS BEYOND 4 YEARS FROM THE END OF THE RELEVANT ASST. YEAR AND SINCE ALL THE MATERIAL FACTS WERE DULY SUBMITTED BY THE ASSESSEE IN THE COURSE OF ORIGINAL ASST. P R O CEEDINGS THE REOPENING IS NOT VALID SINCE THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO FU R NISH THE MATERIAL FACTS. 6. WE HAVE HEARD THE PARTIES. THE MAIN PLUNK OF THE ARGUMENT OF THE LEARNED COUNSEL IS THAT THE ORIGINAL ASSESSMENT FOR THE A.Y. 2004 - 05 HAS BEEN COMPLETED U/S. 143(3) OF THE ACT ON 26 - 12 - 2006 AND THE ASSESSING OFFICER ISSUED THE NOTICE U/S. 148 FOR THE A.YS. 2004 - 05 ON 06 - 01 - 2010 WHICH WAS ISSUED BEYOND THE PERIOD OF 4 YEARS FROM THE END OF 4 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD THE ASSESSMENT YEAR 2004 - 05. HE PLEADS THAT IN VIEW OF THE PROVISO TO SEC. 147 OF THE INCOME - TAX ACT UNLESS THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS FOR HIS ASSESSMENT. THE ASSESSING OFFICER HAS NO JURISDICTION TO INITIATE RE - ASSESSMENT PROCEEDING U/S. 147 OF THE ACT. HE RELIED ON THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF NYK LINE (INDIA) LTD. VS. DCIT 346 ITR 355. HE C ONCLUDED HIS ARGUMENT BY SUBMITTING THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DIS CLOSE THE MATERIAL FACTS FOR THE PURPOSE OF THE ASSESSMENT AND ONLY IT IS INTERPRETATION ADOPTED BY THE ASSESSING OFFICER RIGHTLY OR WRONGLY FOR APPLYING SEC. 80IA(5) AND THAT CANNOT BE SAID TO BE THE FAILURE CONTEMPLATED IN PROVISO TO SEC. 147 OF THE ACT. HE PLEA D ED FOR SUSTAINING THE ORDER OF THE LD. CIT(A) FOR THE A.Y. 2004 - 05 . 7. PER CONTRA IN REPLY THE L D. DR SUBMITS THAT THE ASSESSING OFFICER HAS RELIED ON THE DECISION IN THE CASE OF GOLDMINE SHARES & FINANCE (P) LTD. (SUPRA) FOR REOPENING AND IF T HE ASSESSING OFFICER HAS NOT CONSIDERED ANY DECISION WHICH WAS APPLICABLE TO CLAIM MADE BY THE ASSESSEE THEN THE ASSESSING OFFICER HAS JURISDICTION TO REOPEN THE ASSESSMENT COMPLETED EVEN UNDER SEC. 143(3) OF THE ACT. 8. ADMITTEDLY IN THE PRESENT CASE THE ASSESSMENT OF THE ASSESSEE HAS BEEN COMPLETED BY THE ASSESSING OFFICER U/S. 143(3) ON 26 - 12 - 2006. WHILE COMPLETING THE ASSESSMENT THE CLAIM OF THE ASSESSEE WAS EXAMINED BY THE ASSESSING OFFICER . A S PER THE PROVISO TO SEC. 147 I F REASSESSMENT PROCEED ING IS INITIATED BEYOND THE PERIOD OF 4 YEARS FROM THE END OF THE RESPECTIVE ASSESSMENT YEAR I.E. A.Y. 2004 - 05 THEN THE ASSESSEE GET THE PROTECTION OF PROVISO BELOW SEC. 147. NOTHING IS THERE ON RECORD TO SUGGEST THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL THE MATERIAL FACTS REQUIRED FOR COMPLETING HIS ASSESSMENT. HE FIND THAT REOPENING IS BASED ON THE INTERPRETATION OF LAW 5 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD AND NOT BASED ON NON - DISCLOSURE OF ANY MATERIAL FACTS. THE CONTENTION OF THE ASSESSEE IS WELL SUPPORTED BY THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF NYK LINE (INDIA) LTD. VS. DCIT (SUPRA). WE THEREFORE ALLOW THE GROUNDS TAKEN BY THE ASSESSEE ON THE ISSUE OF VALIDITY OF THE REASSESSMENT PROCEEDINGS AND CONFIRMED THE ORDER OF THE LD. C IT(A) FOR THE A.Y. 2004 - 05 . 9 . NOW LET US EXAMINE THE LEGAL POSITION IN RESPECT OF THE CLAIM IN THE A.YS. 2005 - 06 2006 - 07 AND 2008 - 09 . A S DISCUSSED HERE - IN - ABOVE IN ASSESSEES OWN CASE THE TRIBUNAL HAS EXAMINED THE ISSUE IN CONTROVERSY REGARDING THE INITIAL ASSESSMENT YEAR AND AS WELL AS WHETHER THE LOSSES OR DEPRECIATION OF THE POWER GENERATION UNIT WHICH HAVE ALREADY BEEN SET OFF AGAINST THE OTHER INCOME IN THE PRECEDING YEARS CAN BE NATIONALLY BROUGHT FORWARD AND SET OFF FOR DETERMINING THE QUANTUM OF DEDUCTION. THE OPERATIVE PART OF THE TRIBUNAL ORDER IN ITA NO. 134/PN/2011 (A.Y. 2007 - 08) DATED 30 - 03 - 2012 IN ASSESSEES OWN CASE IS AS UNDER: 7. THE COMMISSIONER OF INCOME - TAX (APPEALS) HOWEVER HAS NOT UPHELD THE STAND OF THE ASSESSING OFFICER. TH E PLEA OF THE ASSESSEE WAS THAT AS PER THE PROVISIONS OF SECTION 80IA(2) OF THE ACT DEDUCTION CAN BE CLAIMED AT THE OPTION OF THE ASSESSEE FOR ANY 10 CONSECUTIVE ASSESSMENT YEARS OUT OF 15 YEARS STARTING FROM THE YEAR IN WHICH THE UNDERTAKING HAS STARTED GENERATION OF POWER. THEREFORE AS PER THE ASSESSEE THE LEGISLATURE HAS NOT INTENDED THAT THE INITIAL YEAR (AS REFERRED TO IN SECTION 80IA(5)) TO BE FIRST YEAR OF OPERATION BUT THE ASSESSEE HAD AN OPTION TO SELECT SUCH INITIAL ASSESSMENT YEAR NOT FALLING BEYOND 15 YEARS STARTING FROM THE PREVIOUS YEAR IN WHICH THE UNDERTAKING STARTS GENERATION OF POWER. IT WAS THEREFORE HELD THAT THE LOSSES PERTAINING TO THE ASSESSMENT YEARS 2003 - 04 AND 2004 - 05 WHICH WERE SOUGHT TO BE ADJUSTED BY THE ASSESSING OFFICER WA S NOT JUSTIFIED INASMUCH AS SUCH ASSESSMENT YEARS WERE PRIOR TO THE INITIAL ASSESSMENT YEAR SELECTED BY THE ASSESSEE AND THEREFORE THE CONTENTION OF THE ASSESSEE HAS BEEN UPHELD BY THE COMMISSIONER OF INCOME - TAX (APPEALS). IN SUPPORT THE COMMISSIONER OF INCOME - TAX (APPEALS) REFERRED AND RELIED UPON THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF MOHAN BREWERIES & DISTILLERIES LTD. V CIT 116 ITD 241 6 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD (CHENNAI). HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U NDER SECTION 80IA(4)(IV)(A) OF THE ACT AS CLAIMED BY THE ASSESSEE. AGGRIEVED WITH THE AFORESAID THE REVENUE IS IN APPEAL BEFORE US. 8. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT SIMILAR ISSUE WAS CONSIDERED BY OUR CO - ORDINATE BENCH IN THE CASE OF SE RUM INTERNATIONAL LTD. PUNE (SUPRA) WHEREIN THE TRIBUNAL HAS DECIDED THIS ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IN THE AFORESAID DECISION IS EXTRACTED BELOW: '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 POONAWA L LA 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 CLAIM ED 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 TH E 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 IS FULLY COVERED BY THE DECISION OF HON 'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT (SUPRA) HOLDING THAT AS PER SUB - SECTION (5) OF SECTION 801 A PROFITS ARE TO BE COMPUTE D AS IF SUCH ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. WHEN THE ASSESSEE EXERCISES THE OPTION ONLY THE LOSSES OF THE YEARS BEGINNING FROM THE INITIAL A. Y. ARE TO BE BROUGHT FORWARD AND NOT THE LOSSES OF THE EARLIER YEARS WHICH HAVE BEEN ALREADY SET OFF AGAINST THE INCOME OF THE ASSESSEE. THE HON'BLE MADRAS HIGH COURT HAS BEEN FURTHER PLEASED TO HOLD THAT REVENUE CANNOT NOTIONALLY BRING FORWARD ANY LOSS OF EARLIER YEARS WHICH HAD ALREADY BEEN SET OFF AGAINST THE OTHER INCOME OF ASSESS EE AND SET OFF AGAINST THE CORRECT INCOME OF THE ELIGIBLE BUSINESS. FICTION CREATED BY SUB - SECTION (5) OF SECTION 80IA DOES NOT CONTEMPLATE SUCH NOTIONAL SET OFF HELD THE HON'BLE HIGH COURT. THE HON'BLE MADRAS HIGH COURT IN THAT DECISION HAS ALSO REFERRED THE DECISION OF HON'B LE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (SUPRA) AND THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF GOLDMAN SHARES & FINANCE (P) LTD. (SUPRA). THERE IS NO DISPUTE THAT EVEN A DECISION OF NON - JURISDICTIONAL H IGH COURT IS A BINDING PRECEDENT FOR THE TRIBUNAL UNTIL A CONTRARY DECISION IS GIVEN BY ANY OTHER COMPETENT HIGH COURT. IN THIS REGARD WE FIND STRENGTH FROM THE RECENT DECISION OF HON'B L E JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF CEN TRAL EXCISE VS. VALSON DYEING BLEACHING AND PRINTING WORKS (SUPRA) WHEREIN THE HON'BLE BOMBAY HIGH COURT HAS BEEN PLEASED TO HOLD IN A CASE OF EXCISE MATTER THAT TRIBUNAL IS BOUND BY THE DECISION OF HIGH COURT EVEN OF A DIFFERENT STATE SO LONG AS THERE IS NO CONTRARY DECISION OF ANY OTHER HIGH COURT. THE HON'BLE BOMBAY HIGH COURT HAS BEEN PLEASED TO HOLD FURTHER THAT THE TRIBUNAL HAD NO OPTION BUT TO FOLLOW THE JUDGMENT OF THE MADRAS HIGH 7 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD COURT. AN AUTHORITY LIKE AN INCOME TAX TRIBUNAL ACTING ANYWHERE IN THE COUNTRY HAS TO RESPECT THE LAW LAID DOWN BY THE HIGH COURT THOUGH OF A DIFFERENT STATE SO LONG AS THERE IS NO CONTRARY DECISION OF ANY OTHER HIGH COURT ON THAT QUESTION. WE THUS RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE VS. VAKSON DYEING BLEACHING AND PRINTING WORKS (SUPRA) HOLD THAT THE TRIBUNAL IS BOUND BY THE DECISION OF THE HON'B L E 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 YEA R 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 ALREAD Y 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 BRI NGING 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. I TO (SUPRA) C ITED BY THE LD. DR IS ALSO NOT HELPFUL TO THE REVENUE SINCE FIRSTLY THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. VS. ACIT (SUPRA) ON THE ISSUE WAS NOT CITED BEFORE THE BENCH AND SECONDLY THE ID. AR FAI RLY AGREED THAT THE ISSUE RAISED WAS COVERED AGAINST THE ASSESSEE BY THE DECISION OF SPECIAL BENCH IN THE CASE OF ACIT VS. GOLDMINE SHARES & FINANCE (P) LTD. (SUPRA) FOLLOWED BY THE AUTHORITIES BELOW. THE ID. AR THEREIN THUS CONTENDED THAT THOUGH THE ISSUE MAY BE DECIDED AGAINST THE ASSESSEE IN VIEW OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. GOLDMINE SHARES & FINANCIAL (P) LTD. BUT IT SHOULD NOT BE CONSTRUED AS ACQUIESCENCE FROM THE SIDE OF THE ASSESSEE AS THE LEGAL POSITION ON THE SUBJEC T IS YET NOT SETTLED. THE GROUND NO. 2 IS THUS DECIDED IN FAVOUR OF THE ASSESSE'. THE ABOVE DECISION HAS BEEN FURTHER FOLLOWED BY OUR CO - ORDINATE BENCH IN A SUBSEQUENT DECISION IN THE CASE OF LAP FINANCE & CONSULTANCY P. LTD. (SUPRA). THEREFORE FOLLOWIN G THE PRECEDENTS WE CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) ON THIS GROUND. THE REVENUE FAILS ON THIS GROUND OF APPEAL. 10 . WE THEREFORE FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THE A.Y. 2007 - 08 HOLD THAT THER E CANNOT BE NOTIONAL C ARRY FORWARD OF THE LOSSES OR DEPRECIATION WHICH HAVE ALREADY BEEN S ET OFF IN THE PRECEDING YEAR S FOR DETERMINING THE QUANTUM OF DEDUCTION U/S. 80IA(4)(IV)(A) OF THE ACT. WE ACCORDINGLY CONFIRMED THE ORDERS OF THE LD. CIT(A) FOR TH E A.YS. 2005 - 06 2006 - 07 AND 2008 - 09. THE ASSESSING OFFICER IS DIRECTED TO RE - WORK OUT THE QUANTUM OF THE DEDUCTION IN ALL THE ASSESSMENT YEARS WITHOUT NOTIONALLY S ETTING OFF OF THE LOSSES OR 8 ITA NOS.421 422 424 & 425/PN/2012 LAXMI RIKSHAW BODY PVT. LTD. AURANG ABAD DEPRECIATION PERTAINING TO THE POWER GENERATION UNIT IN ALL THE ASSESSMENT YEARS AS PER THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08. 1 1 . IN THE RESULT ALL FOUR APPEALS OF THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 - 07 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PA DVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE DATED : 30 TH JULY 20 1 3 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) AURANGABAD 4 THE CIT AURANGABAD 5 THE DR ITAT A BENCH PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE