The DCIT, Circle-8, Ahmedabad V. Shilp Gravures Ltd., Ahmedabad

ITA 2290/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1275 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R T SHAH
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 2290/AHD/2012 (ASSESSMENT YEAR: 2009-10) THE D.C.I.T.,CIRCLE-8, AHMEDABAD V/S SHILP GRAVURES LTD., 101- KASHI PAREKH COMPLEX, B/H. BHAGWATI CHAMBERS, C.G. ROAD, NAVRANGPURA, AHMEDABAD-380009 (APPELLANT) (RESPONDENT) PAN: AADCS 0868G APPELLANT BY : SHRI PRASOON KABRA, SR. D. R. RESPONDENT BY : SHRI R.T. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 08 -06-2 016 DATE OF PRONOUNCEMENT : 14 -06-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. CIT(A)-XIV, AHMEDABAD DATED 27.07.2012 PERTAINING T O A.Y. 2009-10. ITA NO2290/A HD/2012 . A.Y. 2009-10 2 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READ AS UN DER:- (1) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X IV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWA NCE OF RS.48,77,722/- MADE BY THE ASSESSING OFFICER U/S.80IA OF THE ACT I N RESPECT OF WIND MILL BUSINESS. (2A) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X IV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISAL LOWANCE OF RS. 10,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF PRIOR PERIOD EXPENSES. (2B) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN ADMITTING ADDITIONAL E VIDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACT URING AND JOB WORK IN ELECTRONICALLY ENGRAVED COPPER ROLLERS AND TRADING OF PIPES, CIRCLES ETC. 4. WHILE SCRUTINIZING THE RETURN OF INCOME, THE A.O. F OUND THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IA OF THE ACT AT RS. 4,77,722/-. THE INCOME WAS GENERATED ON ACCOUNT OF WIND MILL BU SINESS. THE A.O. WAS OF THE FIRM BELIEF THAT THE PROFIT FROM THE ELI GIBLE BUSINESS FOR THE PURPOSE OF DETERMINATION OF QUANTUM OF DEDUCTION U/ S. 80IA HAS TO BE COMPUTED AFTER DEDUCTION OF NOTIONAL BROUGHT FORWAR D LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS THOUGH THEY MIGHT HAVE BEEN ALLOWED SET OFF AGAINST OTHER INCOME IN EARLIER YEARS. THE A.O. WAS OF THE FIRM BELIEF THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S. 80IA OF THE ACT AND ACCORDINGLY DENIED THE CLAIM OF DEDU CTION OF RS. 48,77,722/-. ITA NO2290/A HD/2012 . A.Y. 2009-10 3 5. ON FURTHER PROBE, THE A.O. FOUND THAT THE ASSESSEE HAS CLAIMED AN EXPENDITURE OF RS. 10,00,000/- UNDER THE HEAD QUANT ITY DISCOUNT. THE A.O. WAS OF THE FIRM BELIEF THAT THIS CLAIM RELATES TO THE PRIOR PERIOD EXPENDITURE AND, THEREFORE, DISALLOWED THE SAME AND COMPLETED THE ASSESSMENT. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CLAIM OF DEDUCTION U/S. 80IA OF THE ACT. AFTER CONS IDERING THE FACTS AND THE SUBMISSIONS IN THE LIGHT OF THE RELEVANT PROVIS IONS OF THE ACT, THE LD. CIT(A) HELD AS UNDER:- 2.3 DECISION: I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSION FILED BY THE APPELLANT. THE A. O. HAS DISALLOWED TH E CLAIM OF DEDUCTION U/S. 80IA AMOUNTING TO RS.48,77,722/- AS IT HAS BEEN HEL D BY HIM THAT IT HAS TO BE COMPUTED AFTER DEDUCTION OF NOTIONAL BROUGHT FOR WARD LOSSES AND DEPRECIATION OF THE ELIGIBLE BUSINESS EVEN IF THE S AME HAVE BEEN SET OFF AGAINST THE OTHER INCOME IN EARLIER YEARS. THE APPE LLANT HAS SUBMITTED THAT THE VIEW TAKEN BY THE A. O. WAS ERRONEOUS AND RELIE D ON THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDDHA SWAMY SPINNING MILLS PVT. LTD. VS. ACIT [231 CTR 0368]. AFTER CONSIDERING ALL THE FACTS, IT IS NOTED THAT T HE APPELLANT COMPANY HAD INSTALLED WIND MILLS IN THE PREVIOUS YEAR RELEVANT TO A. Y. 2006-07. INITIALLY THERE WERE LOSSES IN THE WIND MILL BUSINESS AND THE SAME HAVE BEEN CLAIMED AS SET OFF AGAINST THE INCOME FROM OTHER BU SINESS. THERE WERE PROFITS IN A. Y. 2008-09, BUT THE APPELLANT DID NOT CLAIM THE DEDUCTION IN THAT YEAR BY MISTAKE. THE CLAIM HAS BEEN MADE IN TH E CURRENT YEAR FOR THE FIRST TIME. THE APPELLANT HAS ALSO FILED COPIES OF STATEMENT OF INCOME FOR A. Y. 2006-07,2007-08 & 2008-09. IT IS SEEN FROM THE S TATEMENTS THAT THE APPELLANT HAS NOT CLAIMED DEDUCTION U/S. 80IA OF TH E ACT IN THOSE YEARS AND THE CLAIM OF THE APPELLANT THAT THE DEDUCTION H AVE BEEN CLAIMED FOR THE FIRST TIME IN CURRENT ASSTT. YEAR IS FACTUALLY CORRECT. ACCORDINGLY A. Y. ITA NO2290/A HD/2012 . A.Y. 2009-10 4 2009-10 WOULD BE THE INITIAL ASSTT. YEAR AS PER PRO VISIONS OF SECTION 801A(5) OF THE ACT. IN VIEW OF THE ABOVE MENTIONED FACTS, THE RATIO GIV EN BY HON'BLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING M ILLS PVT. LTD.(SUPRA) WOULD BE SQUARELY APPLICABLE. WHILE DECIDING THE IS SUE IN THAT CASE, THE HON'BLE HIGH COURT HAS ALSO CONSIDERED THE DECISION OF SPECIAL BENCH OF ITAT IN THE CASE OF ACIT VS. GOLDMINE SHARES AND FI NANCE P. LTD. [116 TTJ 705 (AHD)(SB)], WHICH HAS BEEN RELIED BY A.O., THE HON'BLE COURT HAS EXAMINED THE PROVISIONS OF SECTION 80IA AND HAS OBS ERVED THAT THE ELIGIBLE BUSINESS WAS TO BE TAKEN AS THE ONLY SOURCE OF INCO ME DURING THE PREVIOUS YEAR RELEVANT TO INITIAL ASSESSMENT YEAR A ND EVERY SUBSEQUENT ASSESSMENT YEARS WHEN THE ASSESSEE EXERCISES THE OP TION, ONLY LOSSES BEGINNING FROM INITIAL ASSESSMENT YEAR ALONE ARE TO BE BROUGHT FORWARD AND NO LOSSES OF EARLIER YEARS WHICH WERE ALREADY S ET OFF AGAINST THE INCOME OF THE ASSESSEE. LOOKING FORWARD TO A PERIOD OF TEN YEARS FROM THE INITIAL ASSESSMENT YEAR IS CONTEMPLATED. THE HON'BL E COURT HAS FURTHER HELD THAT THE REVENUE CANNOT LOOK BACKWARD TO FIND OUT WHETHER THERE WAS ANY LOSSES OF EARLIER YEARS AND BRING FORWARD THE S AME NOTIONALLY EVEN THOUGH IT WERE SET OFF AGAINST OTHER INCOME OF THE ASSESSEE. IN THE CASE OF THE APPELLANT, THERE IS NO DISPUTE T HAT THE LOSSES INCURRED IN EARLIER YEARS WERE ALREADY SET OFF AND ADJUSTED AGA INST THE OTHER INCOME IN THAT YEAR. THE CLAIM OF DEDUCTION U/S. 80IA HAS BEE N MADE FOR THE FIRST TIME IN THE CURRENT ASSESSMENT YEAR AND, THEREFORE, THE FINDINGS OF THE HON'BLE HIGH COURT ARE SQUARELY APPLICABLE TO THE P RESENT SET OF FACTS. FOR THE SAKE OF REFERENCE, RELEVANT PARAS OF THE ORDER WHICH CONTAINS THE PROVISIONS OF SECTION 80IA AND THE FINDING OF THE H ON'BLE COURT ARE REPRODUCED HEREUNDER: ' 16. SECTION 80-IA READS AS FOLLOWS : '80-IA. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSE SSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN E NTERPRISE FROM ANY BUSINESS REFERRED TO IN SUB-SECTION [4] (SUCH BUSIN ESS BEING HEREINAFTER ITA NO2290/A HD/2012 . A.Y. 2009-10 5 REFERRED TO AS THE ELIGIBLE BUSINESS] THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOW ED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT EQ UAL TO HUNDRED PER CENT, OF THE PROFITS AND GAINS DERIVED FROM SUCH BU SINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. (2) THE DEDUCTION SPECIFIED IN SUB-SECTION (1) MAY, AT THE OPTION OF THE ASSESSEE, BE CLAIMED BY HIM FOR ANY FEN CONSECUTIVE ASSESSMENT YEARS OUT OF FIFTEEN YEARS BEGINNING FROM THE YEAR IN WHI CH THE UNDERTAKING OR THE ENTERPRISE DEVELOPS AND BEGINS TO OPERATE ANY INFRA STRUCTURE FACILITY OR STARTS PROVIDING TELECOMMUNICATION SERVICE OR DEVEL OPS AN INDUSTRIAL PARK OR DEVELOPS A SPECIAL ECONOMIC ZONE REFERRED TO IN CLAUSE (III) OF SUB- SECTION (4) OR GENERATES POWER OR COMMENCES TRANSMI SSION OR DISTRIBUTION OR POWER OR UNDERTAKES SUBSTANTIAL RENOVATION AND M ODERNIZATION OF THE EXISTING TRANSMISSION OR DISTRIBUTION LINES. (4) THIS SECTION APPLIES TO- (I) ANY ENTERPRISE CARRYING ON THE BUSINESS OF (I) DEVELOPING, OR (II) OPERATING AND MAINTAINING, OR (III) DEVELOPING, OPE RATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY WHICH FULFILS ALL THE F OLLOWING CONDITIONS, NAMELY :- (A) IT IS OWNED BY A COMPANY REGISTERED IN INDIA OR BY A CONSORTIUM OF SUCH COMPANIES (OR BY AN AUTHORITY OR A BOARD OR A CORPO RATION OR ANY OTHER BODY ESTABLISHED OR CONSTITUTED UNDER ANY CENTRAL O R STATE ACT); (B) IT HAS ENTERED INTO AN AGREEMENT WITH THE CENTR AL GOVERNMENT OR A STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY FOR (I) DEVELOPING, OR (II) OPERATING AND MAINTAINING, OR ( III) DEVELOPING, OPERATING AND MAINTAINING A NEW INFRASTRUCTURE FACILITY; (C) IT HAS STARTED OR STARTS OPERATING AND MAINTAIN ING THE INFRASTRUCTURE FACILITY ON OR AFTER THE 1ST APRIL, 1995. (5) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WH ICH THE PROVISIONS OF SUB- SECTION (1) APPLY SHALL, FOR THE PURPOSES OF DETERM INING THE QUANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY ITA NO2290/A HD/2012 . A.Y. 2009-10 6 SUCCEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSE QUENT ASSESSMENT YEAR, BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR REL EVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UP TO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMI NATION IS TO BE MADE.' 17. FROM A READING OF SUB-SECTION (1),IT IS CLEAR T HAT IT 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-SECTION (4), I.E., REFERRED TO AS THE ELIGIB LE BUSINESS, THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH E SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DE DUCTION OF AN AMOUNT EQUAL TO 100 PERCENT, OF THE PROFITS AND GAINS DERI VED FROM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. DEDUCTION IS GIVEN TO ELIGIBLE BUSINESS AND THE SAME IS DEFINED IN SUB-SECTION (4) . SUB-SECTION (2) PROVIDES OPTION TO THE ASSESSEE TO CHOOSE 10 CONSEC UTIVE ASSESSMENT YEARS OUT OF 15 YEARS. OPTION HAS TO BE EXERCISED, IF IT IS NOT EXERCISED, THE ASSESSEE WILL NOT BE GETTING THE BENEFIT. FIFTEEN Y EARS IS OUTER LIMIT AND THE SAME IS BEGINNING FROM THE YEAR IN WHICH THE UNDERT AKING OR THE ENTERPRISE DEVELOPS AND BEGINS TO OPERATE ANY INFRASTRUCTURE A CTIVITY, ETC. SUB- SECTION (5) DEALS WITH QUANTUM OF DEDUCTION FOR AN ELIGIBLE BUSINESS. THE WORDS 'INITIAL ASSESSMENT YEAR' ARE USED IN SUB-SEC TION (5) AND THE SAME IS NOT DEFINED UNDER THE PROVISIONS. IT IS TO BE NO TED THAT 'INITIAL ASSESSMENT YEAR' EMPLOYED IN SUB-SECTION (5) IS DIF FERENT FROM THE WORDS 'BEGINNING FROM THE YEAR' REFERRED TO IN SUB-SECTIO N (2). THE IMPORTANT FACTORS ARE TO BE NOTED IN SUB-SECTION (5) AND THEY ARE AS UNDER: '(L) IT STARTS WITH A NON OBSTANTE CLAUSE WHICH MEA NS IT OVERRIDES ALL THE PROVISIONS OF THE ACT AND OTHER PROVISIONS ARE TO B E IGNORED; (2) LT IS FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION; (3) FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR; (4) LT IS A DEEMING PROVISION ; ITA NO2290/A HD/2012 . A.Y. 2009-10 7 (5) FICTION CREATED THAT THE ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME; AND (6) DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND EVERY SUBSEQUENT ASSESSMENT YEAR. 18. FROM A READING OF THE ABOVE, IT IS CLEAR THAT T HE ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME, DURING THE PREVIOUS YEAR REL EVANT TO THE INITIAL ASSESSMENT YEAR AND EVERY SUBSEQUENT ASSESSMENT YEA RS. WHEN THE ASSESSEE EXERCISES THE OPTION, THE ONLY LOSSES OF T HE YEARS BEGINNING FROM INITIAL ASSESSMENT YEAR ALONE ARE TO BE BROUGHT FOR WARD AND NO LOSSES OF EARLIER YEARS WHICH WERE ALREADY SET OFF AGAINST TH E INCOME OF THE ASSESSEE. LOOKING FORWARD TO A PERIOD OF TEN YEARS FROM THE I NITIAL ASSESSMENT IS CONTEMPLATED. IT DOES NOT ALLOW THE REVENUE TO LOOK BACKWARD AND FIND OUT IF THERE IS ANY LOSS OF EARLIER YEARS AND BRING FORWAR D NATIONALLY EVEN THOUGH THE SAME WERE SET OFF AGAINST OTHER INCOME OF THE ASSES SEE AND THE SET OFF AGAINST THE CURRENT INCOME OF THE ELIGIBLE BUSINESS . ONCE THE SET OFF IS TAKEN PLACE IN EARLIER YEAR AGAINST THE OTHER INCOME OF T HE ASSESSEE, THE REVENUE CANNOT REWORK THE SET OFF AMOUNT AND BRING IT NATIO NALLY. A FICTION CREATED IN SUB-SECTION DOES NOT CONTEMPLATES TO BRING SET OFF AMOUNT NATIONALLY. THE FICTION IS CREATED ONLY FOR THE LIMITED PURPOSE AND THE SAME CANNOT BE EXTENDED BEYOND THE PURPOSE FOR WHICH IT IS CREATED 19. IN THE PRESENT CASES, THERE IS NO DISPUTE THAT LOSSES INCURRED BY THE ASSESSEE WERE ALREADY SET OFF AND ADJUSTED AGAINST THE PROFITS OF THE EARLIER YEARS. DURING THE RELEVANT ASSESSMENT YEAR, THE ASS ESSEE EXERCISED THE OPTION UNDER SECTION 80-IA(2). IN TAX CASE NOS. 909 OF 2009 AS WELL AS 940 OF 2009, THE ASSESSMENT YEAR WAS 2005-06 AND IN TAX CA SE NO. 918 OF 2008 THE ASSESSMENT YEAR WAS 2004-05. DURING THE RELEVANT PE RIOD, THERE WERE NO UNABSORBED DEPRECIATION OR LOSS OF THE ELIGIBLE UND ERTAKINGS AND THE SAME WERE ALREADY ABSORBED IN THE EARLIER YEARS. THERE I S A POSITIVE PROFIT DURING THE YEAR. THE UNREPORTED JUDGMENT OF THIS COURT CITED S UPRA CONSIDERED THE SCOPE OF SUB-SECTION (6) OF SECTION 80-1, WHICH IS THE CO RRESPONDING PROVISION OF SUB- SECTION (5) OF SECTION 80-IA. BOTH ARE SIMILARLY WO RDED AND, THEREFORE, WE AGREE ENTIRELY WITH THE DIVISION BENCH JUDGMENT OF THIS COURT CITED SUPRA. IN THE ITA NO2290/A HD/2012 . A.Y. 2009-10 8 CASE OF CIT V. MEWAR OIL AND GENERAL MILLS LTD. (NO . 1) [2004] 271 ITR311 (RAJ); [2004] 186 CTR (RAJ) 141, THE RAJASTHAN HIGH COURT ALSO CONSIDERED THE SCOPE OF SECTION 80-1 AND HELD AS FOLLOWS (PAGE 314 OF 271ITR): 'HAVING CONSIDERED THE RIVAL CONTENTIONS WHICH FOLL OW ON THE LINE NOTICED ABOVE, WE ARE OF THE OPINION THAT ON FINDING THE FA CT THAT THERE WAS NO CARRY FORWARD FOSSES OF 1983-84, WHICH COULD BE SET OFF A GAINST THE INCOME OF THE CURRENT ASSESSMENT YEAR 1984-85, THE RECOMPUTATION OF INCOME FROM THE NEW INDUSTRIAL UNDERTAKING BY SETTING OFF THE CARRY FOR WARD OF UNABSORBED DEPRECIATION OR DEPRECIATION ALLOWANCE FROM PREVIOU S YEAR DID NOT SIMPLY ARISE AND ON THE FINDING OF FACT NOTICED BY THE COMMISSIO NER OF INCOME-TAX (APPEALS), WHICH HAS NOT BEEN DISTURBED BY THE TRIB UNAL AND CHALLENGED BEFORE US, THERE WAS NO ERROR MUCH LESS ANY ERROR A PPARENT ON THE FACE OF THE RECORD WHICH COULD BE RECTIFIED. THAT QUESTION WOUL D HAVE BEEN GERMANE ONLY IF THERE WOULD HAVE BEEN CARRY FORWARD OF UNABSORBE D DEPRECIATION AND UNABSORBED DEVELOPMENT REBATE OR ANY OTHER UNABSORB ED LOSSES OF THE PREVIOUS YEAR ARISING OUT OF THE PRIORITY INDUSTRY AND WHETHER IT WAS REQUIRED TO BE SET OFF AGAINST THE INCOME OF THE CURRENT YEAR. IT IS NOT AT ALL REQUIRED THAT LOSSES OR OTHER DEDUCTIONS WHICH HAVE ALREADY BEEN SET OFF AGAINST THE INCOME OF THE PREVIOUS YEAR SHOULD BE REOPENED AGAIN FOR C OMPUTATION OF CURRENT INCOME UNDER SECTION 80-I FOR THE PURPOSE OF COMPUT ING ADMISSIBLE DEDUCTIONS THEREUNDER. IN VIEW THEREOF, WE ARE OF THE OPINION THAT THE TRI BUNAL HAS NOT ERRED IN HOLDING THAT THERE WAS NO RECTIFICATION POSSIBLE UN DER SECTION 80-1 IN THE PRESENT CASE, ALBEIT, FOR REASONS SOMEWHAT DIFFEREN T FROM THOSE WHICH PREVAILED WITH THE TRIBUNAL. THERE BEING NO CARRY F ORWARD OF ALLOWABLE DEDUCTIONS UNDER THE HEAD DEPRECIATION OR DEVELOPME NT REBATE WHICH NEEDED TO BE ABSORBED AGAINST THE INCOME OF THE CURRENT YE AR AND, THEREFORE, RECOMPUTATION OF INCOME FOR THE PURPOSE OF COMPUTIN G PERMISSIBLE DEDUCTION UNDER SECTION 80-I FOR THE NEW INDUSTRIAL UNDERTAKI NG WAS NOT REQUIRED IN THE PRESENT CASE. ITA NO2290/A HD/2012 . A.Y. 2009-10 9 ACCORDINGLY, THIS APPEAL FAILS AND IS HEREBY DISMIS SED WITH NO ORDER AS TO COSTS. 20. FROM A READING OF THE ABOVE, THE RAJASTHAN HIGH COURT HELD THAT IF IS NOT AT ALL REQUIRED THAT LOSSES OR OTHER DEDUCTIONS WHI CH HAVE ALREADY BEEN SET OFF AGAINST THE INCOME OF THE PREVIOUS YEAR SHOULD BE R EOPENED AGAIN FOR COMPUTATION OF CURRENT INCOME UNDER SECTION 80-1 FO R THE PURPOSE OF COMPUTING ADMISSIBLE DEDUCTIONS THEREUNDER. WE ALSO AGREE WITH THE SAME. WE SEE NO REASON TO TAKE A DIFFERENT VIEW.' IN VIEW OF THE ABOVE JUDGMENT WHICH IS VERY LOGICAL AND CLEAR IN ALL RESPECT, I HAVE NO HESITATION IN HOLDING THAT THE APPELLANT IS ENTITLED TO THE CLAIM U/S. 80IA ON THE INCOME DERIVED FROM WIND MILL PROJECT WITHOU T NOTIONAL SETTING OFF OF LOSSES OF EARLIER YEARS. THE GROUND OF APPEAL IS AC CORDINGLY ALLOWED. 7. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 8. THE LD. D.R. COULD NOT BRING ANY DISTINGUISHI NG DECISION IN FAVOUR OF THE REVENUE; LD. COUNSEL FOR THE ASSESSEE REITER ATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO T HE FACTS IN ISSUES AND THE ORDERS OF THE AUTHORITIES BELOW. WE FIND TH AT THE FACTS OF THE CASE IN HAND ARE IDENTICAL TO THE FACTS WHICH WERE BEFORE THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF VELAYUDDHASWAMY SPINNING MILLS PVT. LTD. WE FIND THAT THE FIRST APPELLATE AUTHORIT Y HAS DRAWN SUPPORT FROM THE DECISION OF THE HONBLE MADRAS HIGH COURT AND HAS RIGHTLY HELD THE ASSESSEE ELIGIBLE FOR THE CLAIM OF DEDUCTI ON U/S. 80IA OF THE ACT. WE, THEREFORE, DECLINE TO INTERFERE. GROUND NO . 1 IS ACCORDINGLY DISMISSED. ITA NO2290/A HD/2012 . A.Y. 2009-10 10 10. IN SO FAR AS THE ADDITION OF RS. 10,00,000/- CONSID ERED AS PRIOR PERIOD EXPENDITURE IS CONCERNED, WE FIND THAT THOUG H THE QUANTITY DISCOUNT WAS GIVEN DURING THE YEAR UNDER CONSIDERAT ION BUT WERE ON ACCOUNT OF SALES MADE IN EARLIER YEARS. IN OUR CONS IDERED OPINION, THIS CANNOT BE CONSIDERED AS A PRIOR PERIOD EXPENDITURE SINCE THE EXPENDITURE HAS BEEN INCURRED DURING THE YEAR UNDER CONSIDERATION. WE, THEREFORE, DECLINE TO INTERFERE WITH THE FINDIN GS OF THE LD. CIT(A); GROUND NO. 2 IS ACCORDINGLY DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVEN UE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 14 - 06 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD