DCIT, Central Circle 1(1), Pune V. M/s. Malpani Tea Corporation, Sangamner

ITA 538/PUN/2013

• Counselvise Citation: 53824514 RSA 2013
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI
• Keywords: Business income; Depreciation; Search and seizure; Unabsorbed depreciation
• Section: 143(3); 153A; 80IB; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S . 538, 539, 540 & 541 / P N/ 20 13 ASSESSMENT YEAR S : 2007 - 08, 2008 - 09, 2009 - 10 & 2 010 - 11 DCIT (CENTRAL), CIRCLE - 1(1), PUNE VS. M/S. MALPANI TEA CORPORATION, S. NO. 150, MALPANI HOUSE, INDIRA GANDHI MARG, NEW NAGAR ROAD, SAMGAMNER (APPELLANT) (RESPONDENT) PAN NO. AACFM3111A APPELLANT BY: SHRI D.S. KOTHARI RESPONDENT BY: SHRI NIKHIL PATHAK DATE OF HEARING : 30 - 08 - 2013 DATE OF PRONOUNCEMENT : 30 - 08 - 2013 ORDER P ER R.S. PADVEKAR , JM : - THIS BATCH OF FOUR APPEALS ARE FILED BY THE REVENUE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(A) - I, PUNE DATED 12 - 12 - 201 2 FOR THE A.YS. 2007 - 08, 2008 - 09, 2009 - 10 & 2010 - 11. THE SOLITARY ISSUE ARISES FOR OUR CONSIDERATION IN ALL FOUR YEARS IS WHETHER THE LD. CIT(A) JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION TO THE ASSESSEE U/S. 80IA(4)(IV) OF THE INCOME - TAX ACT IN RESPECT OF THE PROFIT FROM THE WIND MILL UNIT. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF BLENDING AND PACKING OF TEA. IN THIS CASE, THERE WAS A SEARCH AND SEIZURE OPERATION AGAINST THE ASSESSEE COMPANY ON 06 - 10 - 2009 AND IN CONSEQUENCE OF THE SEARCH ACTION , THE ASSESSEE WAS ISSUED NOTICES U/S. 153A AND ASSESSMENT HAS BEEN COMPLETED U/S. 153 A R.W.S. 143(3) OF THE INCOME - TAX ACT. THE ENTIRE CONTROVERS Y REVEALED AROUND THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE IN RESPECT OF PROFITS DERIVED FROM THE WIND MILL UNIT . T HE 2 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IA(4)(IV) IN ALL THESE ASSESSMENT YEARS AS UNDER: SL. NO. A.Y. AMOUNT OF DEDUCTION CLAIMED 1 2007 - 08 RS.13,00,259/ - 2 2008 - 09 RS.11,37,114 / - 3 2009 - 10 RS.12,68,302/ - 4 2010 - 11 RS.10,15,916/ - 3. WE FIND THAT THE ASSESSING OFFICER HAS NOT MADE ANY OTHER ADDITION EXCEPT DISALLOWING THE CLAIM OF DEDUCTION U/S. 80IA(4) TO THE ASSESSEE. WE ALSO FIND THAT NO INCRIMINATING MATERIAL WAS FOUND I N THE COURSE OF SEARCH BUT IT IS ONLY THE INTERPRETATION OF THE PROVISIONS OF LAW MADE BY THE ASSESSING OFFICER . T HE ASSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE AND THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING DECISION IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE COMPANY IN THE A.Y. 2006 - 07. THE LEARNED COUNSEL SUBMITTED A COPY OF THE DECISION IN ASSESSEES OWN CASE FOR THE A.Y. 2006 - 07 ON THE SAME ISSUE AS THE A.Y. 2006 - 07 THE FIRST YEAR IN WHICH THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IA (4). T HE UNABSORBED DEPRECIATION AND LOSSES IN THE WIND MILL UNIT FOR THE A.YS. 2001 - 02, 2002 - 03, 2003 - 04 WERE SET OFF AGAINST OTHER BUSINESS INCOME IN THE RESPECTIVE ASSESSMENT YEARS. IN THE SAID YEAR DISCARDING THE ACTUA L SET OFF CLAIMED BY THE ASSESSEE , THE ASSESSING OFFICER COMPUTED DEDUCTION U/S. 80IA (4) AFTER REDUCING NOTIONAL BROUGHT FORWARD LOSSES AND DEPRECIATION OF THE WIND MILL UNIT BY APPLYING THE PROVISIONS OF SEC. 80IA(5) OF THE ACT. 4. SO FAR AS A.YS. 2007 - 0 8, 2008 - 09, 2009 - 10 & 2010 - 11 ARE CONCERNED , THE ASSESSING OFFICER MADE THE DISALLOWANCE OF THE CLAIM AFTER CONSIDERING THE LOSSES ON NOTIONAL BASIS RELATING TO THE PRECEDING YEARS HAVE BEEN SET OFF ALREADY IN PRECEDING YEARS. THE REASONS GIVEN BY THE 3 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER ASS ESSING OFFICER FOR DISALLOWING CLAIM OF DEDUCTION IN THE A.YS. 2007 - 08, 2008 - 09, 2009 - 10 & 2010 - 11 ARE SAME AS WERE IN THE A.Y. 2006 - 07 . W HEN MATTER REACHED BEFORE THE TRIBUNAL IN A.Y. 2006 - 07 T HE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING DECI SION IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS PVT. LTD. VS. ACIT 231 CTR 268 (MAD.). THE OPERATIVE PART OF THE REASONING AND FINDING OF THE TRIBUNAL ON THIS ISSUE IN THE A.Y. 2006 - 07 (ITA NO. 912/PN/2011) ORDER DATED 31 - 12 - 2 0 12 ARE AS UNDER: 4. BEFO RE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SERUM INTERNATIONAL LTD. VS. ADDL. CIT RANGE 6, PUNE IN ITA NOS. 290 TO 292/PN/2010 FOR A.Y. 2004 - 05 TO 2006 - 07 VIDE ORDER DATED 28 - 9 - 2011 HAS CONS IDERED AN IDENTICAL CONTROVERSY AND AFTER FOLLOWING THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. VS. ACIT (2010) 38 DTR (MAD) 57 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FOLLOWING DISCUSSION IN TH E ORDER OF THE TRIBUNAL IS RELEVANT IN THIS REGARD: - 11. THE ISSUE RAISED BEFORE THE BENCH IS AS TO WHETHER IN VIEW OF THE PROVISIONS OF SEC. 80IA(5) OF THE I.T. ACT 1961, THE PROFIT FROM THE ELIGIBLE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S. 80IA OF THE ACT HAS TO BE COMPUTED AFTER DEDUCTION OF THE NOTIONAL BROUGHT FORWARD LOSSES AND DEPRECIATION OF ELIGIBLE BUSINESS EVEN THOUGH THEY HAVE BEEN ALLOWED SET OFF AGAINST OTHER NON - ELIGIBLE BUSINESS INCOME IN EARLIER YEARS. THE SUBMISSION OF THE LD A.R. REMAINED THAT ON THE WIND MILLS SET UP IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2002 - 03, THE ASSESSEE HAD CLAIMED DEPRECIATION AT THE RATE OF 100% THEREON I.E. RS. 3.54 CRORES, WHICH WAS FULLY SET OFF AGAINST THE ANOTHER INCOME IN THE SAID A.Y. 2002 - 03 ITS ELF. IN THE A.Y. 2004 - 05, THE ASSESSEE HAD POSITIVE INCOME FROM THE SAID GENERATION ACTIVITY AND THERE WERE NO BROUGHT FORWARD LOSSES/ UNABSORBED DEPRECIATION OF THE PRECEDING YEAR, WHICH HAD REMAINED TO BE SET OFF IN THE A.Y. 2004 - 05. THE A.O., NOTIONA LLY BROUGHT FORWARD UNABSORBED DEPRECIATION FOR THE A.Y. 2003 - 04 TO THE IMPUGNED A.Y. 2004 - 05 AND DENIED THE CLAIM FOR DEDUCTION MADE BY THE ASSESSEE U/S. 80IA IN RESPECT OF THE PROFIT EARNED BY IT IN A.Y. 2004 - 05. THE LD. A.R. SUBMITTED THAT SUB - SECTION (2) OF SECTION 80IA PROVIDES AN OPTION TO THE ASSESSEE TO CHOOSE 10 CONSECUTIVE A.YS. OUT OF 15 YEARS FOR CLAIMING THE DEDUCTION. HE SUBMITTED THAT THE TERM INITIAL YEAR IN SUB - SECTION (5) OF 80IA IS NOT DEFINED AND IS USED IN CONTRADICTION TO THE WORDS BEGINNING FROM THE YEAR USED IN SUB - SECTION (2). HE SUBMITTED THAT THE ASSESSEE CHOSE A.Y. 2004 - 05 AS INITIAL A.Y BEING THE FIRST YEAR IN WHICH IT CLAIMED DEDUCTION U/S. 80IA AND THEREFORE, LOSSES/DEPRECIATION BEGINNING FROM A.Y. 2004 - 05 ALONE COULD ONLY BE BROUGHT FORWARD AND SET OFF. DEPRECIATION OF THE PRECEDING A.Y. 4 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER 2002 - 03 COULD NOT HAVE BEEN NOTIONALLY BROUGHT FORWARD AND SET OFF AGAINST PROFIT FOR THE A.Y. 2004 - 05. THE LD. A.R. PLACED HEAVY RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH CO URT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT (SUPRA). HE SUBMITTED THAT THE DECISION OF HONBLE MADRAS HIGH COURT WILL PREVAIL UPON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. GOLDMINE SHARES AND FINANC E (P) LTD. (SUPRA) FOLLOWED BY THE PUNE BENCH OF THE TRIBUNAL IN ITS RECENT DECISION IN THE CASE OF PRIMA PAPER ENGG (P) LTD. VS. ITO (SUPRA) AND THERE THE ASSESSEE DID NOT DISPUTE THE FACT THAT THE AUTHORITIES BELOW HAVE DECIDED THE ISSUE FOLLOWING THE D ECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. GOLDMINE SHARES.. THE LD. A.R. POINTED OUT THAT DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT (SUPRA) WAS NOT CITED BEFORE THE PUNE BEN CH IN THE CASE OF PRIMA PAPER ENGG (P) LTD. VS. ITO (SUPRA). THE LD. A.R. HAS ALSO CITED THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. AURANGABAD HOLIDAY RESORTS (P) LTD., (SUPRA) HOLDING 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. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE VS. M/S. VALSON DYEING , BLEACHING AND PRINTING WORKS (SUPRA). 12. THE CONTENTION OF THE LD. D.R. ON THE OTHER HAND REMAINED THAT DEDUCTION U/S. 801 AND 801A COVERED INTER ALIA, INDUSTRIAL UNDERTAKINGS. THE POWER GENERATION UNITS FOUND A SPECIFIC MENTION FOR THE FIRST TIME W.E.F. 1.4.1993. IN ALL THE YEARS FROM 1.4.1981 TO 31 TO 31 ST MARCH 2000 IN BOTH U/S. 80I AND 80IA, THE TERM INITIAL A.Y WAS DEFINED AND MEANT THE FIRST A.Y. RELEVANT TO THE PREVIOUS YEAR IN WHICH THE ELIGIBLE UNIT COMMENCES PRODUCTION/POWER GENERATION. ONLY FROM 1.4.2000, WHEN SECTIONS 80IA WAS REPLACED WITH SECTION 80IA AND 80IB, THE DEFINITION OF INITIAL A.Y. DID NOT FIND A MENTION. BUT NOWHERE, IN THE PARLIAMENT SPEECH OF MEMORANDUM EXPLAINING THE FINANCE BILL HAS ANY MENTION THAT THERE WAS ANY INTENTION TO IGNORE LOSSES AND DEPRECIATION FROM FIRST YEAR OF POWER GENERATION/PRODUCTION AND THAT SUCH LOSSES TILL FIRST YEAR OF CLAIM OF DEDUCTION IS TO BE IGNORED. THE VIEW CANVASSED BY THE ASSESSEE DOES NOT FIND ANY SUPPORT. HE SUBMITTED THAT THE RE IS NO DISCERNIBLE CHANGE IN LAW OR INTENTION OF PARLIAMENT W.E.F. 1.4.2000. THE LD. D.R. SUBMITTED THAT THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF GOLDMINE SHARES AND FINANCE (P) LTD. (SUPRA) IS FULLY APPLICABLE IN THE PRESENT CASE. HE POINTED OUT THAT IN ITS RECENT DECISION DT. 21 ST JANUARY 2011, THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF HYDERABAD CHEMICAL SUPPLIES LTD. VS. ACIT (SUPRA) HAS ALSO DECIDED AN IDENTICAL DECISION IN FAVOUR OF THE REVENUE FOLLOWING THE DECISION O F SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. GOLDMAN SHARES & FINANCE (P) LTD. (SUPRA). HE SUBMITTED THAT THE HYDERABAD BENCH OF THE TRIBUNAL WHILE DECIDING THE ISSUE HAS ALSO DISCUSSED THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT (SUPRA). THE LD. D.R. SUBMITTED THAT EVEN IN THE CASE OF LIBERTY INDIA VS. CIT (SUPRA), THE HONBLE SUPREME COURT HAS BEEN PLEASED TO EXPLAIN THE INTENTION OF PARLIAMENT AND SCOPE OF 5 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER DEDUCTION U/S. 80IA AND 80IB OF THE ACT. THE HONBLE SUPREME COURT HAS BEEN PLEASED TO HOLD THAT SUCH PROFITS ARE TO BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. THE DEVICES ADOPTED TO REDUCE OR INFLATE THE PROFIT OF ELIGIBLE BUSIN ESS HAS GOT TO BE REJECTED IN VIEW OF THE OVERRIDING PROVISIONS OF SUB - SECTION (5) OF SECTION 80IA OF THE ACT. 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 POONAWALLA STUD AND AGRO FARM PVT. LTD. VS. ACIT (SUPRA). IN THAT CASE AFTER DISCUSSING THE ISSUE IN DETAIL, THE TRIBUNAL H AS 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 CLAIMED 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 THE ASSESSEE STARTED GENERATING ELECTRICITY FROM THE WIND MILL ACTIVITY. WE ALSO FIND THAT THE ISSUE RAISED IN G ROUND 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 HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD VS. ACIT (SUPRA) HOLDING THAT AS PER SUB - SECTION (5) OF SECTION 80IA, PROFITS ARE TO BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. WHEN THE ASSESSEE EXERCISES TH E 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 HONBLE MADRAS HIGH COURT HAS BEEN FURTHER PLE ASED TO HOLD THAT REVENUE CANNOT NOTIONALLY BRING FORWARD ANY LOSS OF EARLIER YEARS WHICH HAD ALREADY BEEN SET OFF AGAINST THE OTHER INCOME OF ASSESSEE AND SET OFF AGAINST THE CORRECT INCOME OF THE ELIGIBLE BUSINESS. FICTION CREATED BY SUB - SECTION (5) O F SECTION 80IA DOES NOT CONTEMPLATE SUCH NOTIONAL SET OFF, HELD THE HONBLE HIGH COURT. THE HONBLE MADRAS HIGH COURT IN THAT DECISION HAS ALSO REFERRED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (SUPRA) AND THE DECISION O F 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 HIGH 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 HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE VS. VALSON DYEING, BLEACHING AND PRINTING WORKS (SUPRA) WHEREIN THE HONBLE BOMBAY HI GH 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 HONBLE BOMBAY HIGH COURT HAS BEEN PLEASED TO HOLD FURTHER THAT THE TRIBUNAL HAD NO OPTION BUT TO FOLLOW THE JUDGMENT OF THE MADRAS HIGH COURT. AN AUTHORITY LIKE AN INCOME TAX TRIBUNAL ACTING 6 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER ANYWHERE IN THE COUNTRY HAS TO RESPECT THE LAW LAID DOWN BY THE HIGH COURT, THOUGH OF A DIFFERENT STATE, S O 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 HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE VS. VAKSON DYEING, BLEACHING AND P RINTING WORKS (SUPRA) HOLD THAT THE TRIBUNAL IS BOUND BY THE DECISION OF THE HONBLE 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 HONBLE 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 YEAR BEGINNING FROM THE INITIAL A.Y. ARE TO BE BROUGHT FORWARD AND NOT THE LOSSES OF EARLI ER 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 ALREADY BEEN SET OFF AGAINST ANY OTHER INCOME OF THE ASSESSEE AND SET OFF THE SAME AGAINST T HE 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 BRINGING THE NOTIONALLY BROUGHT FORWARD ANY LOSS OR DEPRECIATION OF EARLIER YEARS W HICH 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. ITO (SUPRA) CITED BY THE LD. DR IS ALSO NOT HELPFUL TO THE REVENUE SINCE FIRSTLY THE DECISION O F THE HONBLE 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 LD. AR FAIRLY 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 LD. AR THEREIN THUS CONTENDED THAT THOUGH THE ISSUE MAY BE DECIDED AGAINST THE ASSESSEE IN VIEW OF THE SPECIAL BENCH OF THE TRIBUNA L 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 SUBJECT IS YET NOT SETTLED. THE GROUND NO. 2 IS THUS DECIDED IN FAVOUR OF THE ASSESSE E. 5. A PERUSAL OF THE AFORESAID WOULD SHOW THAT IN THE CASE OF SERUM INTERNATIONAL LTD. (SUPRA), THE TRIBUNAL HAS CONSIDERED AN IDENTICAL CONTROVERSY. ON BEHALF OF THE ASSESSEE, THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYDHASWAMY SPI NNING MILLS (P) LTD., (SUPRA) WAS BEING CITED WHEREAS THE REVENUE HAD RELIED UPON THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ASSTT. CIT VS. GOLDMIND SHARES AND FINANCE (P) LTD. (2008) 116 TTJ (AHD) (SB) 705 TO THE CONTRARY. THE TRIBUNAL NOTICED THAT HAVING REGARD TO THE DECISION OF THE HONBLE MADRAS HIGH COURT THE ISSUE WAS TO BE DECIDED ACCORDINGLY AND NOT ON THE BASIS OF DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF GOLDMINE SHARES AND FINANCE (P) LTD. (SUPRA) WHICH WAS TO THE CONTRARY. IN THIS CONTEXT, 7 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER THE TRIBUNAL CAME TO THE CONCLUSION THAT WHEN THE ASSESSEE EXERCISED OPTION IDENTIFYING TEN CONSECUTIVE YEARS AS CONTAINED IN SUB - SECTION (2) OF SECTION 80 - IA OF THE ACT, ONLY THE LOSSES OF THE YEAR BEGINNING FROM SUCH INIT IAL ASSESSMENT YEAR ARE TO BE BROUGHT FORWARD AND SET OFF ON APPLYING SECTION 80 - IA(5) OF THE ACT AND NOT THE LOSSES OF EARLIER YEARS WHICH OTHERWISE WERE LYING SET OFF AGAINST OTHER INCOME OF THE ASSESSEE. 6. AT THE TIME OF HEARING, THE LEARNED DR HAS N OT BROUGHT TO THE NOTICE OF THE BENCH ANY DECISION CONTRARY TO THAT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYDHASWAMY SPINNING MILLS (P) LTD. (SUPRA) ON THE ISSUE IN QUESTION. THEREFORE, WE FIND THAT THE CONTROVERSY BEFORE US IS NO LONGER RES INTEGRA AND IS IN FACT COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SERUM INTERNATIONAL LD. (SUPRA). 7. BEFORE PARTING WE MAY ALSO REFER TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PR IMA PAPER ENGG. (P) LTD. VS. ITO IN ITA NO. 1755 AND 1205/PN/2007 FOR A.Y. 2002 - 03 AND 2003 - 04 VIDE ORDER DATED 31 - 1 - 2011 WHICH IS CONTRARY TO THE AFORESAID POSITION. THE SAID DECISION OF THE TRIBUNAL HAS BEEN EXPLAINED IN THE CASE OF SERUM INTERNATIONAL LTD (SUPRA) WHEREIN IT HAS BEEN CLEARLY BROUGHT OUT AS TO HOW THE SAID DECISION DOES NOT HELP THE CASE OF THE REVENUE. FOLLOWING DISCUSSION IN THE ORDER OF THE TRIBUNAL IS RELEVANT. THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PRIMA PAPER E NGINEERING P.LTD. VS. ITO (SUPRA) CITED BY THE LD. DR IS ALSO NOT HELPFUL TO THE REVENUE SINCE FIRSTLY THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. VS. ACIT (SUPRA) ON THE ISSUE WAS NOT CITED BEFORE T HE BENCH AND SECONDLY THE LD. AR FAIRLY 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 LD. 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 ASSESS EE AS THE LEGAL POSITION ON THE SUBJECT IS YET NOT SETTLED. THE GROUND NO. 2 IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. 8 ITA NO S . 538, 539, 540 & 541/PN/2013, M/S. MALPANI TEA CORPORATION, SAMGAMNER 8. IN VIEW OF THE AFORESAID DISCUSSION, WE THEREFORE, HOLD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80 - IA OF THE ACT F OR THE YEAR UNDER CONSIDERATION IN A MANNER WHEREBY THE INITIAL ASSESSMENT YEAR REFERRED TO IN SECTION 80 - IA(5) OF THE ACT IS TO BE TAKEN AS THE A.Y. 2006 - 07 AND NOT THE A.Y. 2001 - 02 AS CANVASSED BY THE REVENUE. RESULTANTLY, WE THEREFORE, SET ASIDE THE O RDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE AND ALLOW THE DEDUCTION TO THE ASSESSEE U/S 80 - IA OF THE ACT AS ABOVE. 5. AS WE HAVE ALREADY OBSERVED , THE REASONS FOR DISALLOWANCE OF THE CLAIM OF DEDUCTION U/S. 80IA(4)(IV) IN RESPECT OF THE PROFITS OF THE WIND MILL ARE SAME AS WERE IN THE A.Y. 2006 - 07 , W E, THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNAL ON THIS ISSUE REFERRED (SUPRA) DISMISS THE GROUNDS TAKEN BY THE REVENUE I N ALL THE APPEALS ON THIS ISSUE. 6. IN THE RESULT, ALL THE APPEA LS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 - 08 - 20 1 3 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 30 TH A UGUST, 20 1 3 COPY TO 1 DEPARTMENT 2 A SSESSEE 3 THE CIT(A) - I, PUNE 4 THE CIT - I, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE