Best Corporation Private Limited, CHENNAI V. JCIT, Tiruppur

ITA 1958/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90339 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 16-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N RENGARAJ
• Assessee Lawyers: R KUMAR
• Keywords: Business income; Depreciation; Capital receipt; Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A.NO. 1958/MDS/2014 & C.O.NO.142/MDS/2014 (IN ITA NO.1958/MDS/2014) ( / ASSESSMENT YEAR: 2011-12) M/S. BEST CORPORATION PVT.LTD. 89/2, AVINASHI ROAD, PADMAVATHI PURAM, TIRUPUR-641 605. VS JOINT COMMISSIONER OF INCOME TAX, TIRUPUR RANGE, TIRUPUR. PAN:AACCR6828G ( /APPELLANT) (RESPONDENT/CROSS OBJECTOR) & ./ I.T.A.NO. 2165/MDS/2014 ( / ASSESSMENT YEAR: 2011-12) JOINT COMMISSIONER OF INCOME TAX, TIRUPUR RANGE, TIRUPUR. VS M/S. BEST CORPORATION PVT.LTD. 89/2, AVINASHI ROAD, PADMAVATHI PURAM, TIRUPUR-641 605. PAN:AACCR6828G ( /APPELLANT) (RESPONDENT) ASSESSEE BY : MR. R.KUMAR, ADVOCATE REVENUE BY : MR.N.RENGARAJ, CIT /DATE OF HEARING : 24 TH MARCH, 2015 /DATE OF PRONOUNCEMENT : 20 TH MAY, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THESE TWO APPEALS ARE FILED BY THE ASSESSEE AND REVENUE RESPECTIVELY AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME TAX(APPEALS)-II, COIMBATORE DATED 29.05.2 014 FOR THE ASSESSMENT YEAR 2011-12. THE CROSS OBJECTION IS FILED BY THE REVENUE WITH DELAY OF 119 DAYS. 2 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 ITA NO.1958/MDS/2014: 2. THE FIRST ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IA ON SALE OF CARBON CREDIT, TUF INTEREST SUBSIDY RECEIPT AND GEN ERATION LOSS COMPENSATION RECEIPT. THE COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN NOT ACCEPTING THE ALTERNATE CLAI M THAT THE RECEIPTS ON SALE OF CARBON CREDIT AND TUF INTEREST SUBSIDY BEING CAPITAL RECEIPTS ARE NOT INCOME LIABLE TO TAX . 3. IN SO FAR AS SALE OF CARBON CREDIT IS CONCERNED , COUNSEL FOR THE ASSESSEE SUBMITS THAT IT IS A CAPITAL RECEI PT AS HELD BY THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE O F CIT VS. MY HOME POWER LTD. IN TAX APPEAL NO.60 OF 2014 DATED 19.02.2014. COUNSEL FURTHER SUBMITS THAT THIS BENC H IS HOLDING THAT CARBON CREDIT IS A CAPITAL RECEIPT AND NOT EXIGIBLE TO TAX AND NOT A BUSINESS RECEIPT FOR THE PURPOSE O F SECTION 80IA. HE PLACES A COPY OF ON THE DECISION OF CO-ORD INATE BENCH OF THIS TRIBUNAL IN THE CASE OF CNV TEXTILES PVT. LTD., VS. DCIT., IN ITA NO.746/MDS/2014 DATED 21.11.2014 . 3 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF C.N.V TEXTILES PVT. LTD., VS. DCIT., IN ITA NO.746/MDS/20 14 DATED 21.11.2014 HELD AS UNDER:- 7. FIRST WE TAKE UP ASSESSEES APPEAL I.T.A.NO.746/MDS/2014. ITS FIRST GROUND IS THAT THE ASSESSING OFFICER AND CIT(A) HAVE WRONGLY TREATED ITS CARBON CREDIT RECEIPTS AS REVENUE RECEIPTS. THE ASSESSEE ITSELF SEEMS TO HAVE INCLUDED THIS SUM OF ` 13,44,581/- AS REVENUE RECEIPTS FOR CLAIMING SECT ION 80IA DEDUCTION. THE ASSESSING OFFICER REFERRED TO DERIVED EXPRESSION (SUPRA). THE ASSESSEE RAISED AN ALTERNATIVE PLEA IN LOWER APPELLATE PROCEEDINGS BASED ON THE CASE LAW OF MY HOME POWER LTD VS DCIT (2013) 21 ITR (TRIB) 186 (HYD) UPHELD BY THE HON'BLE A.P HIGH COURT IN INCOME TAX APPELLATE TRIBUNAL APPEAL NO.60 OF 2014 IN ORDER DATED 19.2.2014 THAT THESE RECEIPTS ARE NOT REVENUE BU T CAPITAL IN NATURE. THE CIT(A) TURNS DOWN THIS ALTERNATIVE PLEA AS WELL. THERE IS NO QUARREL ABOUT THIS FACTUAL BACKDROP. WE FIND THAT A CO-ORDINATE BENCH OF THE 'TRIBUNAL' IN P.K.GANESHWR VS ACIT - I.T.A.NO. 2091/ MDS/2013 DATED 17.7.2014 HAS ACCEPTED A SIMILAR PLEA RAISED IN LOWER APPELLATE PROCEEDINGS FOR TREATING SALE OF CARBON CREDIT RECEIPTS AS CAPITAL RECEIPTS INSTEAD OF REVENUE RECEIPTS ALREADY ACCOUNTED. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION ON FACTS. THUS, WE ACCEP T THE ASSESSEES GROUND. THE ASSESSING OFFICER IS DIRECTED TO FRAME NECESSARY COMPUTATION. 4 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 6. RESPECTFULLY FOLLOWING THE SAID DECISION, WE HOL D THAT INCOME FROM CARBON CREDIT IS CAPITAL RECEIPT NOT EX IGIBLE TO TAX AND SUCH INCOME IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. 7. AS FAR AS TUF INTEREST SUBSIDY IS CONCERNED, COU NSEL FOR THE ASSESSEE SUBMITS THAT SIMILAR ISSUE IS DE CIDED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF C .N.V TEXTILES PVT. LTD., VS. DCIT., IN ITA NO.746/MDS/20 14 DATED 21.11.2014, WHEREIN THE TRIBUNAL FOLLOWING THE DECI SION OF KOLKATA BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. GLOSTER JUTE MILLS LTD. VS. ADDL. CIT IN ITA NO.687/KOL/2010 DA TED 2.7.2014 AND THE DECISION OF HONBLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF CIT VS. SHAMLAL BANSAL [(2011 ) 11 TAXMAN.COM 369] HELD THAT TUF RECEIPT IS ONLY CAPIT AL RECEIPT NOT LIABLE TO BE TREATED AS INCOME. 8. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDER O F LOWER AUTHORITIES. 9. AFTER HEARING BOTH THE PARTIES AND ON GOING THRO UGH THE DECISIONS RELIED ON BY THE ASSESSEE, WE FIND THAT T HE ISSUE IS 5 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 SQUARELY COVERED BY THE SAID DECISIONS. THE CO-ORDI NATE BENCH OF THIS TRIBUNAL IN C.N.V TEXTILES PVT. LTD., VS. DCIT., IN ITA NO.746/MDS/2014 DATED 21.11.2014 HELD AS UND ER:- 8. THE ASSESSEES SECOND GROUND CLAIMS ITS TUF RECEIPTS OF ` 7.58 LAKHS ARE ALSO CAPITAL RECEIPTS. THE ASSESSMENT AS WELL AS LOWER APPELLATE TREAT THE S AME AS REVENUE RECEIPTS NOT ENTITLED FOR SECTION 80IA DEDUCTION. THIS AMOUNT REPRESENTS INTEREST SUBSIDY @ 5% SEPARATELY ACCOUNTED FOR AS RECEIPT INSTEAD OF NETTING THE SAME AS AGAINST INTEREST PAID AMOUNT. IT EMERGES FROM CASE LAW [2011] 11 TAXMANN.COM 369 (P&H) CIT VS SHAMLAL BANSAL THAT THEIR LORDSHIPS HA VE HELD THAT A TUF RECEIPT IS ONLY A CAPITAL RECEI PT NOT LIABLE TO BE TREATED AS INCOME U/S 4 AS ITS OBJECT IVE IS TO ENHANCE TECHNOLOGY APPARATUS BY ASSISTING ITS MACHINERY ACQUISITION. A CO-ORDINATE BENCH OF THE 'TRIBUNAL' IN M/S GLOSTER JUTE MILLS LTD. VS ADDL. CIT I.T.A.NO. 687/KOL/2010 DATED 2.7.2014 HAS TOED THE VERY VIEW. IN THESE CIRCUMSTANCES, WE ACCEPT THE ASSESSEES ALTERNATIVE GROUND AND DIRECT THE ASSESS ING OFFICER TO TREAT THIS TUF RECEIPT OF ` 7.58 LAKHS AS A CAPITAL RECEIPT IN CONSEQUENTIAL COMPUTATION. 10. RESPECTFULLY FOLLOWING THE SAID DECISION, WE HO LD THAT TUF IS A CAPITAL RECEIPT AND NOT A REVENUE RECEIPT AND NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IA ON SUCH R ECEIPT. 11. INSOFAR AS GENERATION LOSS COMPENSATION RECEIPT IS CONCERNED, COUNSEL FOR THE ASSESSEE SUBMITS THAT TH E ISSUE IS SQUARELY COVERED BY THE CO-ORDINATE BENCH OF THIS T RIBUNAL IN 6 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 THE CASE OF C.N.V TEXTILES PVT. LTD., VS. DCIT., IN ITA NO.746/MDS/2014 DATED 21.11.2014. 12. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES. 13. ON GOING THROUGH THE ABOVE ORDER OF THIS TRIBUN AL, WE FIND THAT THE TRIBUNAL WAS OF THE VIEW THAT GENERAT ION LOSS COMPENSATION RECEIPT IS ENTITLED FOR DEDUCTION UNDE R SECTION 80IA OF THE ACT. WHILE HOLDING SO, THE TRIBUNAL OBS ERVED AS UNDER:- 9. THE ASSESSEES LAST GROUND PERTAINS TO GENERATION LOSS COMPENSATION RECEIPT OF ` 10,00,569/- FROM ITS SUPPLIER FOR LOSS OF WIND POWE R PRODUCTION. THE REVENUES OBJECTIONS ARE BASED ON THE WORD DERIVED (SUPRA). THE ASSESSEES WINDMI LL SUPPLIER HAS PAID THE AFORESAID AMOUNT IN LIEU OF ASSURED POWER GENERATION FAILURE AT A RATE FIXED VE RY WELL IN ADVANCE. IN IDENTICAL CIRCUMSTANCES, WE FI ND THAT IN CASE LAW [2011] 16 TAXMANN.COM 75(DELHI) MAGNUM POWER GENERATION LTD. VS DCIT HOLDS THAT SUCH A RECEIPT ARISING FROM COMPENSATION IS ENTITLE D FOR SECTION 80IA DEDUCTION. THE REVENUE DOES NOT CITE ANY JUDICIAL PRECEDENCE IN ITS FAVOUR. THUS, WE ADOPT THE SAME VIEW AND ALLOW THE ASSESSEES CORRESPONDING GROUND. THE ASSESSING OFFICER IS DIRECTED TO PASS A CONSEQUENTIAL COMPUTATION ORDER. 14. SIMILAR VIEW HAS BEEN EXPRESSED BY THE DELHI BE NCH OF THIS TRIBUNAL IN THE CASE OF MAGNUM POWER GENERATIO N LTD. 7 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 VS. DCIT (16 TAXMANN.COM 75). RESPECTFULLY FOLLOWIN G THE SAID DECISIONS, WE HOLD THAT GENERATION LOSS COMPEN SATION IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE AC T. ITA NO.2165/MDS/2014:- 15. THE ONLY ISSUE IN THE APPEAL OF THE REVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDI NG THAT ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80 IA OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT AS PER PROVISIONS OF SECTION 80IA(5) ELIGIBLE UNDERTAKING SHOULD BE TREATED AS ONLY SOUR CE OF INCOME FOR COMPUTING QUANTUM OF DEDUCTION ALLOWABLE UNDER SECTION 80IA. 16. THE ASSESSING OFFICER WHILE COMPLETING THE ASSE SSMENT RESTRICTED THE DEDUCTION UNDER SECTION 80IA OF THE ACT ON THE WINDMILL PROFITS OBSERVING AS UNDER:- 3.3 ON A PLAIN READING OF THE PROVISIONS OF SECTION 80IA(5) IT IS MANDATED THAT 'THE PROFITS AND GAINS OF THE ELIGIBLE BUSINESS FOR WHICH THE PROVISIONS OF SUB-SECTION (1) APPLY SHALL FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS 8 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 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 UPTO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMINATION IS TO BE MADE'. 3.4 THE PLAIN IMPORT OF THIS SECTION WHICH OVERRI DES EVERY OTHER PROVISIONS OF THE IT ACT 1961 IS THAT T HOUGH LOSSES PERTAINING TO THE ELIGIBLE BUSINESS IS SET O FF AGAINST THE OTHER BUSINESS OF THE ASSESSEE, FOR THE PURPOSE OF SECTION 80IA(5) THE LOSSES OF THE EARLIE R YEARS OF THE ELIGIBLE WILL HAVE TO BE NOTIONALLY BR OUGHT FORWARD AND SET OFF AGAINST THE INCOME IF ANY OF THE ELIGIBLE BUSINESS FOR THE SUCCEEDING ASSESSM ENT YEAR. WHEN SUCH A COURSE IS ADOPTED, IT IS SEEN THA T IN THIS CASE THE ASSESSEE WOULD BE LEFT WITH UNABSORBE D. DEPRECIATION AND BUSINESS LOSS NOTIONALLY BROUGHT FORWARD WHICH WOULD MAKE THE ELIGIBLE BUSINESS /UNDERTAKING INELIGIBLE FOR CLAIM U/S 80IA. 3.5 TO THIS THE ASSESSEE BROUGHT TO NOTICE THE DECISION OF THE HONOURABLE MADRAS HIGH COURT IN TH E CASE OF M/S SRI VELAYUTHASWAMY SPINNING MILLS (P) L TD V CIT [231 CTR 368(MAD.)] WHEREIN THE COURT HELD TH AT LOSSES ALREADY SET OFF AGAINST OTHER BUSINESS INCOM E NEED NOT BE NOTIONALLY BROUGHT FORWARD AND SET OFF FOR COMPUTING THE DEDUCTION U/S.80IA. 3.6 THE DEPARTMENT HAS FILED A SPECIAL LEAVE PETI TION IN THE HONORABLE SUPREME COURT AGAINST THE DECISION OF THE HONORABLE HIGH COURT AND IT HAS BEEN ADMITTED BY THE HONORABLE SUPREME COURT. IN THE EVENTUALITY OF THE SUPREME COURT OVERTURNING THE DECISION OF THE HONOR ABLE HIGH COURT IN THE CASE OF M/S SRI VELAYUTHASWAMY SPINNING MILLS (P) LTD V CIT, THE DEPARTMENT MAY N OT BE ABLE TO REVISIT THE ASSESSMENT BECAUSE OF THE LIMITATION OF TIME ENSHRINED IN SECTION 153 AND SO THE CLAIM OF DEDUCTION U/S 80IA IS DISALLOWED AND ADDED BACK TO THE INCOME RETURNED. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE 9 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 OF CIT VS. VELAYUDHASWAMY SPINNING MILLS P. LTD. (2 31 CTR 368) ALLOWED THE CLAIM OF THE ASSESSEE. 17. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON THE ORDER OF ASSESSING OFFICER IN RESTRICTING THE CLAIM UNDER SECTION 80IA(5) OF THE ACT. 18. COUNSEL FOR THE ASSESSEE SUPPORTS THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 19. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES AND THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SRI VELAYUDHASWAMY SPINNING MILLS P.LTD. (SUPRA).THE HONBLE HIGH COURT IN THE CASE OF SRI VELAYUDHASWAMY SPINNING MILLS PVT.LTD. VS. ACIT (SU PRA) HELD THAT FOR THE PURPOSE OF COMPUTING DEDUCTION UN DER SECTION 80IA, INITIAL ASSESSMENT YEAR MEANS THE YE AR IN WHICH THE ASSESSEE BEGINS TO CLAIM DEDUCTION UNDER SECTION 80IA OF THE ACT. WHILE HOLDING SO, THE HONBLE HIG H COURT OBSERVED AS UNDER:- FROM READING OF SUB-S. (1) OF S. 80-IA, IT IS CLEA R THAT IT 10 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 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 SUB-S. (4) I.E. REFERRED TO AS THE E LIGIBLE BUSINESS, THERE SHALL, IN ACCORDANCE WITH AND SUBJE CT TO THE PROVISIONS OF THE SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT EQUAL TO 100 PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR TE N CONSECUTIVE ASSESSMENT YEARS. DEDUCTION IS GIVEN TO ELIGIBLE BUSINESS AND THE SAME IS DEFINED IN SUB-SO (4). SUB-S.(2) PROVIDES OPTION TO THE ASSESSEE TO CHOOSE 10 CONSECUTIVE ASSESSMENT YEARS OUT OF 15 YEARS. OPTION HAS TO BE EXERCISED. IF IT IS NOT EXERCISED, THE ASSESSEE WILL NOT BE GETTING THE BEN EFIT. FIFTEEN YEARS IS OUTER LIMIT AND THE SAME IS BEGINN ING FROM THE YEAR IN WHICH THE UNDERTAKING OR THE ENTERPRISE DEVELOPS AND BEGINS TO OPERATE ANY INFRASTRUCTURE ACTIVITY ETC. SUB-S. (5) DEALS WITH QUANTUM OF DEDUCTION FOR AN ELIGIBLE BUSINESS. THE WORDS 'INITIAL ASSESSMENT YEAR' ARE USED IN SUB - S.(5) AND THE SAME IS NOT DEFINED UNDER THE PROVISIONS. IT IS TO BE NOTED THAT 'INITIAL ASSESSM ENT YEAR' EMPLOYED IN SUB-S. (5) IS DIFFERENT FROM THE WORDS 'BEGINNING FROM THE YEAR' REFERRED TO IN SUB- S. (2). IMPORTANT FACTORS ARE TO BE NOTED IN SUB-S. (5 ) AND THEY ARE AS UNDER: '(1) IT STARTS WITH NON OBSTANTE CLAUSE WHICH MEANS IT OVERRIDES ALL THE PROVISIONS OF THE ACT AND OTHER PROVISIONS ARE TO BE IGNORED; (2) IT IS FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION; (3) FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR; (4) IT IS A DEEMING PROVISION; (5) FICTION CREATED THAT THE ELI GIBLE BUSINESS IS THE ONLY SOURCE OF INCOME; AND (6) DURI NG THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMEN T YEAR AND EVERY SUBSEQUENT ASSESSMENT YEAR.' FROM READING OF THE ABOVE, IT IS CLEAR THAT THE ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME, DURING THE PREVIOUS YEAR RELEVANT TO INITIAL ASSESSMENT YEAR A ND EVERY SUBSEQUENT ASSESSMENT YEARS. WHEN THE ASSESSEE EXERCISES THE OPTION, THE ONLY LOSSES OF T HE YEARS BEGINNING FROM INITIAL ASSESSMENT YEAR-ALONE ARE TO BE BROUGHT FORWARD AND NOT LOSSES OF EARLIER 11 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 YEARS WHICH WERE ALREADY SET OFF AGAINST THE INCOME OF THE ASSESSEE. LOOKING FORWARD TO A PERIOD OF TEN YEARS FROM THE INITIAL ASSESSMENT IS CONTEMPLATED. IT DOES NOT ALLOW THE REVENUE TO LOOK BACKWARD AND FIN D OUT IF THERE IS ANY LOSS OF EARLIER YEARS AND BRING FORWARD NOTIONALLY EVEN THOUGH THE SAME WERE SET OF F AGAINST OTHER INCOME OF THE ASSESSEE AND THE SET OF F AGAINST THE CURRENT INCOME OF THE ELIGIBLE BUSINESS . ONCE THE SET OFF IS TAKEN PLACE IN EARLIER YEAR AGA INST THE OTHER INCOME OF THE ASSESSEE, THE REVENUE CANNOT REWORK THE SET OFF AMOUNT AND BRING IT NOTIONALLY. FICTION CREATED IN SUB-S. (5) DOES NOT CONTEMPLATES TO BRING SET OFF AMOUNT NOTIONALLY. FICTION IS CREATED ONLY FOR THE LIMITED PURPOSE AND THE SAME CANNOT BE EXTENDED BEYOND THE PURPOSE FOR WHICH IT IS CREATED. 20. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWE D THE CLAIM OF THE ASSESSEE FOLLOWING THE JURISDICTIO NAL HIGH COURT DECISION IN THE CASE OF VELAYUDHASWAMY SPINNI NG MILLS LTD. VS. ACIT(SUPRA). RESPECTFULLY FOLLOWING THE SA ID DECISION, WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE AND REJECT THE GROUNDS OF A PPEAL RAISED BY THE REVENUE. 21. COMING TO CROSS OBJECTION FILED BY THE REVENUE OPPOSING THE CONTENTIONS OF THE ASSESSEE THAT RECEI PTS FROM SALE OF CARBON CREDITS IS TO BE TREATED AS CAPITAL RECEIPT IN CASE IF IT IS NOT HELD AS REVENUE RECEIPT FOR THE P URPOSE OF RELIEF UNDER SECTION 80IA OF THE ACT, WE FIND THAT CROSS 12 ITA NO.1958 & 2165/MDS/2014 & C.O.NO.142/MDS/2014 OBJECTION WAS FILED WITH A DELAY OF 119 DAYS AND NO CONDONATION PETITION WAS FILED THOUGH DEFECT MEMO W AS ISSUED. REVENUE ALSO DID NOT PLACE ANY ARGUMENT ON THE CONDONATION OF DELAY IN FILING OF CROSS OBJECTION. THUS, THE CROSS OBJECTION RAISED BY THE REVENUE DESERVES TO B E DISMISSED IN LIMINIE . 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. THE APPEAL AND CROSS OBJECTION OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DAY OF MAY, 2015 . SD/- SD/- ( . ) ( $ '( ) ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) + / ACCOUNTANT MEMBER ' + / JUDICIAL MEMBER ' /CHENNAI, - /DATED 20 TH MAY, 2015 SOMU )/0 10 / COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. 2 () /CIT(A) 4. 2 /CIT 5. 0 )5 /DR 6. /GF .