DCIT, Yamunanagar V. M/s M/S Kamal Encon Industires Ltd, Yamunanagar

ITA 873/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0073 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Keywords: Depreciation; Source of fund; Unabsorbed depreciation
• Section: 80IB; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 873/CHD/2015 ASSESSMENT YEAR: 2012-13 THE DCIT, VS M/S KAMAL ENCON IND.LTD., YAMUNA NAGAR CIRCLE, (FORMERLY KEC INDUSTRIAL L TD.), YAMUNA NAGAR. 56, INDUSTRIAL ESTATE LTD. YAMUNA NAGAR. PAN: AAACK4706E & C.O. 38/CHD/2015 ITA NO. 873/CHD/2015 ASSESSMENT YEAR: 2012-13 M/S KAMAL ENCON IND.LTD., VS THE DCIT, (FORMERLY KEC INDUSTRIAL LTD.), YAMUNA NAGAR CIRCL E, 56, INDUSTRIAL ESTATE LTD. YAMUNA NAGAR. YAMUNA NAGAR. PAN: AAACK4706E (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI MANJIT SINGH,DR ASSESSEE BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 04.05.2016 DATE OF PRONOUNCEMENT : 06.05.2016 O R D E R PER BHAVNESH SAINI,JM THE DEPARTMENTAL APPEAL AND THE CROSS OBJECTION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PANCHKULA DATED 24.09.2015 FOR ASSESSMENT YEAR 2012-13. 2 2. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS T HE CROSS OBJECTION AND SEEKS PERMISSION TO WITHDRAW TH E SAME. THE CROSS OBJECTION IS, THEREFORE, DISMISSED AS WITHDRAWN. 3. THE DEPARTMENTAL APPEAL IS FILED ON THE FOLLOWIN G GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN TREATING THE INITIAL ASSESSMENT YEAR FROM THE BEGINNING OF BLOCK AND NOT FROM THE YEAR IN WHICH T HE UNDERTAKING BEGINS ITS OPERATION. 2. ON THE FACTS 'AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE LOSSES WILL BE COMPUTED AND CARRIED FORWARD FOR THE ELIGIBLE BUSINESS UNITS SEP ARATELY TREATING THEM AS THE ONLY SOURCE OF INCOME BEGINNING FROM THE OPT ED INITIAL ASSESSMENT YEAR AND NOT BY SETTING OFF ALL LOSSES O F ELIGIBLE BUSINESS WITH, PROFIT OF NON ELIGIBLE BUSINESS. 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF HEAVY MACHINERIES AND GENERATION OF POWER THROUGH WIND MILLS. THE ASSESSING OFFICER COMPLETED ASSESSMENT BY DISALLOWING DEDUCTION OF RS. 1,27,32,244/- UNDER SECTION 80IA OF THE ACT. 5. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE COMPANY ESTABLISHED TWO WIND MILLS ONE IN THE STATE OF MAHARASHTRA - A 1.65 MW WIND POWER PROJECT AT BRAHMANWEL, TAL. SAKRI, DISTRICT DHULE, WHICH COMMENCED PRODUCTION IN THE YEAR RELEVANT TO THE A. Y. 3 2006-07. THE INITIAL ASSESSMENT YEAR FROM WHEN THE DEDUCTION HAS BEEN CLAIMED IS TAKEN AS A.Y. 2009-10 . THE SECOND WIND MILL OF 1250 KW HAS BEEN SET UP AT TIRUNELVELI DISTRICT OF TAMILNADU, WHICH COMMENCED PRODUCTION IN THE YEAR RELEVANT TO THE A.Y. 2005-06 . THE INITIAL ASSESSMENT YEAR FROM WHEN THE DEDUCTION HAS BEEN CLAIMED IS TAKEN AS A.Y. 2008-09. THE ASSESSEE COMPANY HAS CLAIMED DEDUCTION U/S 80IA OF THE ACT AMOUNTING TO RS. 1,27,32,244/- @ 100% OF INCOME EARNED FROM THE BUSINESS OF WIND POWER GENERATION PROJECTS. THE CLAIM WAS SUPPORTED BY THE AUDIT REPO RT IN FORM NO. LOCCB UNDER RULE 18BBB OF THE I. T. RULES, 1962. 5(I) THE AO ON VERIFICATION OF THE ASSESSMENT REC ORD NOTICED THAT ON THESE WIND POWER PLANTS THE ASSESSE E COMPANY HAS INCURRED LOSSES FOR A.Y. 2005-06 TO 200 9- 10 AS DETAILED BELOW:- A.Y. LOSSES DECLARED IN MAHARASHTRA WIND MILL LOSSES DECLARED IN TAMILNADU WIND MILL 2005-06 -2,75,63,910/- 2006-07 -4,66,82,134/- -1,82,13,230/- 2007-08 -3,14,07,233/- -8,17,770/- 2008-09 -43,23,486/- -- TOTAL -8,24,12,553/- -4,65,94,910/- 4 5(II) THESE LOSSES INCLUDING UNABSORBED DEPRECIATI ON WERE SET OFF BY THE ASSESSEE COMPANY AGAINST THE IN COME DERIVED FROM THE BUSINESS OF MANUFACTURING OF HEAVY MACHINERY ETC. FURTHER, THE ASSESSEE COMPANY ALSO EARNED AND DECLARED INCOME FROM THE BUSINESS OF WIN D MILL POWER PROJECTS FOR THE A.Y.2008-09 TO 2012-13 AS DETAILED BELOW:- A.Y. INCOME DECLARED IN MAHARASHTRA WIND INCOME DECLARED IN TAMILNADU WIND 2008-09 12,71,760/- 2009-10 25,28,423/- 40,40,514/- 2010-11 83,04,357/- 47,47,241/- 2011-12 13,00,582/- 45,49,675/- 2012-13 1,05,61,236/- 21,71,008/- TOTAL 2,26,94,598/- 1,67,80,198/- 5(III) THE AO NOTED THAT LOSSES WERE SET OFF AGAI NST NON ELIGIBLE BUSINESS FOR DEDUCTION U/S 80IA OF THE ACT. FURTHER, PRESUMING THAT THE ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE, AS IS MANDAT ED IN SECTION 80IA(5) OF THE ACT, THE BROUGHT FORWARD LOSSES OF THE ELIGIBLE BUSINESS WERE SET OFF AGAINST THE I NCOME FROM THE ELIGIBLE BUSINESS, EVEN THOUGH IF THEY WER E SET- OFF AGAINST THE NON ELIGIBLE BUSINESS IN THE RESPEC TIVE YEARS. 6. IN PARA 3.5 OF ASSESSMENT ORDER, THE AO ON THE APPLICABILITY OF SECTION 80IA(5) HAS ELABORATED THA T IN CASE SUCH NOTIONAL SET OFF OF LOSSES OF EARLIER YEA RS WITH 5 THE PROFITS OF ELIGIBLE BUSINESS IS NOT MADE, THEN UNDUE AND UNINTENDED BENEFIT WILL ACCRUE TO THE ASSESSEE WHO RUNS TWO PARALLEL BUSINESSES ONE ELIGIBLE FOR DEDUC TION AND THE OTHER NON ELIGIBLE FOR DEDUCTION. ANY ASSES SEE RUNNING TWO BUSINESSES, ONE ELIGIBLE ONE AND OTHER NON ELIGIBLE ONE, WILL FIRST SET OFF ALL LOSSES OF ELIG IBLE BUSINESS WITH PROFITS OF THE NON ELIGIBLE BUSINESS AND LATER ON, THE BROUGHT FORWARD LOSSES LEFT WILL BE S ET OFF WITH THE PROFITS OF ELIGIBLE AND NON ELIGIBLE BUSIN ESS WITHOUT CLAIMING ANY DEDUCTION. THUS TILL THE TIME THE ENTIRE B/F LOSSES OF THE WINDMILL ARE WIPED OFF, TH E ASSESSEE CAN POSTPONE THE CLAIM OF DEDUCTION U/S 80 IA, VIRTUALLY GETTING THE BENEFITS OF DEDUCTION FOR ALL 15 YEARS INSTEAD OF 10 YEARS AS IS CLEARLY MANDATED IN SECTION 80IA(1) OF THE ACT. MOREOVER, DEDUCTION U/S 80IA IS ALLOWED TO AN UNDERTAKING OR AN ENTERPRISE OR AN ELIGIBLE BUSINESS AND NOT TO AN ASSESSEE AND THA T SECTION 80IA(5) IS A NON OBSTANTE CLAUSE AND THUS H AS OVERRIDING EFFECT OVER ALL OTHER PROVISIONS OF THE ACT. 6(I) THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSES SEE AND AFTER CONSIDERATION OF THE REPLY CONCLUDED IN P ARA 3.8 OF ASSESSMENT ORDER AS UNDER : 'IN VIEW OF THE PROVISIONS OF SECTION 80IA(5) OF THE ACT, FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION, THE PROFIT AND GAINS FROM THE ELIGIBLE BUSINESS NEED TO BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WAS THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR 6 RELEVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR. THE LOSSES OF THE WIND MILL FROM THE YEAR IN WHICH IT STARTS GENERATING ELECTRICITY NEED TO BE NOTIONALLY CARRIED FORWARD FOR SETTING THEM OFF AGAINST THE PROFITS FROM THE WIND MILL IN THE SUBSEQUENT YEARS, AND ONLY AFTER THE ENTIRE LOSS IS ABSORBED BY THE INCOME FROM WIND MILL, DEDUCTION U/S 80IA IS AVAILABLE. THE ARGUMENT OF THE ASSESSEE THAT IT HAS AN OPTION TO CHOOSE A BLOCK OF 10 CONSECUTIVE ASSESSMENT YEARS OUT OF THE GROSS BLOCK OF 15 YEARS AND THE INITIAL ASSESSMENT YEAR WOULD REFER TO THE 1 ST YEAR OF THE BLOCK IS NOT ACCEPTABLE. SUB SECTION 2 OF SECTION 80IA GIVES AN OPTION ONLY TO CHOOSE THE BLOCK OF ANY 10 CONSECUTIVE ASSESSMENT YEAR FOR CLAIMING DEDUCTION, AND NOTHING MORE CAN BE READ OR INFERRED FROM SUB SECTION 2. NO WHERE SUB SECTION 2 OF SECTION 80IA INDICATES THAT THE INITIAL ASSESSMENT YEAR WILL BE RECKONED FROM THE BEGINNING OF THE BLOCK AND NOT FROM THE YEAR IN WHICH THE UNDERTAKING BEGINS ITS OPERATIONS. IT IS ALSO WORTHWHILE TO MENTION THAT THE ERSTWHILE SECTION 80IA, WHICH WAS SUBSTITUTED FOR SECTION 80IA& 80IB W.E.F. 01.04.2000 DEFINED INITIAL ASSESSMENT YEAR IN SUB SECTION 12 FOR VARIOUS TYPES OF UNDERTAKING ELIGIBLE FOR DEDUCTION. IN, THE AMENDED SECTIONS ALSO 'INITIAL ASSESSMENT YEAR' HAS BEEN DEFINED FOR DEDUCTIONS AVAILABLE U/S 80IB AND 80IC. THE INITIAL ASSESSMENT YEAR HAS NOT BEEN DEFINED FOR SECTION 80IA AS IT STANDS TODAY. IN SUCH A SCENARIO, THE NATURAL MEANING OF THE TERM ONLY SHOULD BE TAKEN. AS DISCUSSED ABOVE, IF THE 7 INITIAL ASSESSMENT YEAR IS TAKEN AS ANY YEAR OTHER THAN THE YEAR WHEN THE BUSINESS COMMENCES, IT WILL MAKE ASSESSEE DERIVE THE BENEFITS OF DEDUCTION FOR MORE THAN 10 YEARS, WHICH IS NOT INTENDED UNDER SECTION 80IA(1). THEREFORE, THE INITIAL ASSESSMENT YEAR WOULD REFER ONLY TO THE YEAR IN WHICH THE ASSESSEE BEGINS TO GENERATE POWER. 6(II) THE ASSESSING OFFICER RELIED UPON THE FOLLOW ING JUDGMENTS :- I) ACIT VS. GOLD MINE SHARES & FINANCE PVT. L TD. (ITAT, SB - AHD) 113 ITD 209. II) M/S HYDERABAD CHEMICALS PRODUCTS V S. ACIT 20 TAXMANN.COM 289 (HYD.) III) PARSHAD PRODUCTIONS PVT. LTD. VS. DCIT (IT AT, CHENNAI) 98 ITD 212 IV) ADDL.CIT VS. ASHOK ALCO CHEM. LTD. (ITAT, MUM) 96 ITD 160 6(III) AFTER SETTING OFF OF THE LOSSES FOR A.Y.2 005-06 TO 2012-13 AGAINST THE INCOME FOR A.YS. 2008-09 TO 201 2- 13 AS IN TABLE IN PARA 5.1 ABOVE, THE DEDUCTION CLA IMED U/S 80IA BY THE ASSESSEE AT RS.1,27,32,243/- WAS NO T ALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 7. DURING THE APPELLATE PROCEEDINGS, THE COUNSEL FO R THE ASSESSEE FILED WRITTEN SUBMISSION WHICH IS, IN BRIEF, REPRODUCED AS UNDER : '1) THAT NEW SECTIONS 80-1 A & 80-IB WERE SUBSTITUT ED FOR OLD SECTION 80- IA BY THE FINANCE ACT, 1999, W. E. F. 1-4-2000 AND THE APPELLANT'S CASE IS COVERED BY THE AMENDED SECTION 80-IA AND THE RELEVA NT SUB-SECTIONS (1), (2) & (5). 8 2) THERE CANNOT BE TWO OR MORE INITIAL ASSESSMENT YEARS. ALSO IN S. 80- IA(5) THE WORDS 'INITIAL ASSESSMENT YEAR' HAVE BEEN USED TWICE. ONCE IN THE BEGINNING READING AS 'FOR THE PURPOSES OF DE TERMINING THE QUANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSE QUENT ASSESSMENT YEAR' AND AGAIN IN CONTINUING THE ABOVE SENTENCE READING AS 'BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCO ME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL AS SESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UP TO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMINATION IS TO BE MADE. ' THESE WORD S CANNOT HAVE TWO DIFFERENT MEANINGS IN THE SAME SENTENCE OF A SUB-SE CTION. THE LEARNED AO WHILE DESCRIBING THE IMPUGNED WORDS APPEARING IN TH E SECOND LIMB OF THE SUB-SECTION HAS ARBITRARILY LEFT THE SAME APPEARING IN THE FIRST LIMB. IN CASE, AS TAKEN BY THE LEARNED ASSESSING OFFICER, THE YEAR OF START OF OPERATIONS OF THE UNDERTAKING IS THE INITIAL ASSESSMENT YEAR; THE PRO VISIONS OF SS.(5) OF S. 80-IA CONTAINING THE WORDS 'FOR THE PURPOSES OF DETERMINI NG THE QUANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSE QUENT ASSESSMENT YEAR' WILL FAIL AS THE ASSESSEE HAS NOT OPTED THE SECOND YEAR OF OPERATION FOR CLAIMING DEDUCTION U/S (2) OF S. 80-IA. TO CLARIFY FURTHER, IN THE CASE AS TAKEN BY THE AO, THE A.Y. 2005-06 I.E. THE FIRST YEAR OF THE START OF OPERATIONS OF THE UNDERTAKING IS THE INITIAL ASSESSMENT YEAR THEN THE 'ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR' WILL BE THE A. Y. 2006- 07 BUT THE ASSESSEE IS NOT CLAIMING DEDUCTION FOR T HIS ASSESSMENT YEAR. THEREFORE, THE AO HAS DONE WRONG BY TAKING THE FIRS T YEAR OF OPERATION AS THE INITIAL YEAR. IN THE CASE UNDER APPEAL, THE ASSESSE E HAS OPTED THE TEN YEARS PERIOD FOR CLAIM OF SECTION 80IA BENEFIT W.E.F. A.Y . 2008-09 IN VIEW OF801 A(2) THEREFORE, A.Y. 2008-09 IS THE FIRST ASSESSMEN T YEAR FOR CLAIMING DEDUCTION, AND A.Y. 2009-10 IS THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING IT AND IS ALSO THE 'ASSESSMENT YEAR IMMED IATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR FOR THE PURPOSES OF DETERMI NING THE QUANTUM OF DEDUCTION UNDER SUB-SECTION (1) '. 3) ON GOING THROUGH THE PROVISIONS OF CHAPTER VL-A WHI CH GIVES INDUSTRY SPECIFIC DEDUCTIONS IT MAY BE OBSERVE THAT THESE WORDS HAVE NOT 9 BEEN DEFINED IN THE AMENDED SECTION 80-IA AS ALSO I N SECTION 80IAB PURPOSELY AS THE CHOICE OF SELECTION OF THE 'INITIA L ASSESSMENT YEAR' HAS BEEN LEFT TO THE ASSESSEE. INITIALLY THERE WAS SECT IONS 80-1 WHICH GAVE INDUSTRY SPECIFIC BENEFITS. AFTER ABOLITION OF SECT ION 80-1 THERE CAME SECTION 80-IA ON THE STATUTE AND THERE WAS NO OPTIO N FOR AVAILING DEDUCTION FOR ANY TEN CONSECUTIVE ASSESSMENT YEARS IN A BLOCK OF FIRST FIFTEEN YEARS FROM THE START OF OPERATIONS BY THE U NDERTAKING BUT THE INITIAL ASSESSMENT YEAR WAS DEFINED AS THE YEAR OF START OF OPERATIONS. SECTION 801 A WAS SUBSTITUTED FOR NEW SECTION 80-IA AND SECTION 80IB. 4) IT IS NOT CORRECT TO GIVE THE SAME MEANING TO THE C ONCEPT OF INITIAL ASSESSMENT YEAR FOR SECTIONS 80-IA/80-IAB A S GIVEN IN OTHER SECTIONS OR TO PRESUME THAT THE DEFINITION HAS ESCA PED DUE TO OVERSIGHT. RATHER THE CONCEPT OF INITIAL ASSESSMENT YEAR HAS N OT BEEN DEFINED IN THESE SECTIONS AS THE LEGISLATURE WANTED THE SAM E TO BE THE FIRST YEAR OF THE BLOCK PERIOD OF TEN CONSECUTIVE ASSESSMENT YEAR S OPTED BY THE ASSESSEE FOR AVAILING DEDUCTION UNDER THESE, SECTIONS OUT OF THE FIRST FIFTEEN YEARS FROM THE START OF THE OPERATIONS OF THE UNDERTAKING . THUS THE 'INITIAL YEAR' CONTAINED IN SUB SECTION 5 OF SECTION 80IA & 80IAB IS THE FIRST YEAR OF THE TEN CONSECUTIVE ASSESSMENT YEARS AS SELECTED BY THE ASSESSEE WITHIN THE PERIOD OF FIRST FIFTEEN YEARS OF THE START OF THE E STABLISHMENT OR ENTERPRISE IN VIEW OF SUB SECTION (2) OF THE SECTION. 5) FURTHER, THE APPELLANT RELIED UPON THE DECISION OF HON'BLE ITAT JAIPUR BENCH IN THE CASE OF THE ACITVS. SAURABH AGR OTECH (P) LTD, IN IT A 829/JP/201J DECIDED ON 18.10.2 012 FOR A Y 2007-08 AND THE HON'BLE IT A T MUMBAI BENCH IN THE CASE OF SHEVIE EXPORTS IN I T A NO. 321/MUM/2012 DECIDED ON 10.04.2013 FOR A.Y. 2008-09 . 6) IN ADDITION, THE APPELLANT HAS RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS IN ITS WRITTEN SUBMITTED. 8. THE LD. CIT(APPEALS), FOLLOWING HIS ORDER FOR PRECEDING ASSESSMENT YEAR 2010-11 DATED 28.11.2013 ON THE IDENTICAL ISSUE, ALLOWED THE APPEAL OF THE ASSE SSEE. 10 HIS FINDINGS IN PARA 4.7 AND 4.8 OF THE APPELLATE O RDER ARE REPRODUCED AS UNDER : 4.7 I HAVE GONE THROUGH THE FACTS OF THE CASE AND WRITTEN SUBMISSION FILED BY THE APPELLANT. THIS ISSUE IS DECIDED BY ME IN THE APPELLANT'S OWN CASE FOR THE A.Y. 2010-11 IN APPEAL NO. 63/YN/12-13 DATED 28.1 L2013. THE FINDINGS ARE REPRODUCED AS UNDER:- '5. I HAVE GONE THROUGH THE FACTS OF THE CASE A ND THE WRITTEN SUBMISSION FILED BY THE APPELLANT. IN THE INSTANT C ASE, TWO ISSUES EMERGES - ONE IS THE OPTION OF CHOOSING INITIAL ASS ESSMENT YEAR AVAILABLE TO ASSESSEE OR TAKING THE FIRST YEAR OF O PERATION OF BUSINESS AS INITIAL ASSESSMENT YEAR; SECOND IS TREA TMENT OF LOSS INCURRED PRIOR TO INITIAL ASSESSMENT YEAR, ITS CARR Y FORWARD AND SET-OFF FOR ARRIVING AT QUANTUM OF DEDUCTION II/S 8 0-IA OF THE ACT. SECTION 80-IA WHICH HAS BEEN SUBSTITUTED BY FI NANCE ACT, 1999 W.E.F 01.04.2000 AND THE RELEVANT SUB SECTIONS ON THESE TWO ISSUES READS AS UNDER :- '80-IA (1) WHERE THE GROSS INCOME OF AN ASSESSEE I NCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISES FROM ANY BUSINESS REFERRED TO IN SUB-SE CTION(4) (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJ ECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT EQ UAL TO HUNDRED PERCENT OF THE PROFITS AND GAINS DERIVED FR OM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. ' (2) THE DEDUCTION SPECIFIED IN SUB-SECTION (1) M AY, AT THE OPTION OF THE ASSESSEE, HE CLAIMED BY HIM FOR ANY T EN CONSECUTIVE ASSESSMENT YEARS OUT OF FIFTEEN YEARS B EGINNING FROM THE YEAR IN WHICH THE UNDERTAKING OR THE ENTER PRISE DEVELOPS AND BEGINS TO OPERATE ANY INFRASTRUCTURE F ACILITY OR STARTS PROVIDING TELECOMMUNICATION SERVICE OR DEVEL OPS AN INDUSTRIAL PARK OR DEVELOPS A SPECIAL ECONOMIC ZONE REFERRED TO IN CLAUSE (HI) OF SUB SECTION (4)] OR GENERATES POW ER OR COMMENCES TRANSMISSION OR DISTRIBUTION OF POWER OR UNDERTAKES SUBSTANTIAL RENOVATION AND MODERNIZATION OF THE EXI STING TRANSMISSION OR DISTRIBUTION LINES, (5) NOTWITHS TANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS A CT, THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WHICH THE PROV ISIONS 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 SUCCEEDING THE INITIA L ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR, BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL AS SESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UPTO AND IN CLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMINATION IS TO B E MADE. 11 5.1 ON THE READING OF ABOVE PROVISIONS, IT IS N OTED THAT THE SUB SECTION (2) OF SECTION 801 A PROVIDES THAT AN O PTION IS GIVEN TO THE ASSESSEE FOR CLAIMING ANY 10 CONSECUTIVE ASS ESSMENT YEARS OUT OF 15 YEARS BEGINNING FROM THE YEAR IN WH ICH THE UNDERTAKING OR THE ENTERPRISE DEVELOPS AND BEGINS T O OPERATE. PRIOR TO THE AMENDMENT THE SECTION PROVIDED FIX NUM BER OF ASSESSMENT YEARS FOR CLAIM OF DEDUCTION BY AN ELIGI BLE BUSINESS. IN THE PRE-AMENDED PROVISION THE INITIAL ASSESSMENT YEAR WAS ALSO DEFINED. IN THE POST AMENDED PERIOD I.E. AFTER 1 ST APRIL, 2000 BY VIRTUE OF SECTION 80IA(2) A WINDOW OF 15 AS SESSMENT YEARS HAS BEEN GRANTED AND THE OPTION HAS BEEN GIVE N TO THE ASSESSEE TO CLAIM THE DEDUCTION FOR ANY 10 CONSECUT IVE ASSESSMENT YEARS OUT OF 15 YEARS. THE 15 YEARS WIND OW STARTS FROM YEAR IN WHICH THE UNDERTAKING OR THE ENTERPRIS E DEVELOPS AND BEGINS TO OPERATE THE ELIGIBLE BUSINESS. THEREF ORE, IT IS CLEAR THAT THE ASSESSEE HAS OPTION FOR CHOOSING THE INITIAL ASSESSMENT YEARS AND ONCE THE INITIAL ASSESSMENT YE AR HAS BEEN OPTED BY THE ASSESSEE, THE CLAIM OF DEDUCTION WILL BE AVAILABLE FOR 10 CONSECUTIVE ASSESSMENT YEARS INCLUDING THE I NITIAL ASSESSMENT YEAR. THEREFORE, IN THE INSTANT CASE, TH E AO WAS NOT JUSTIFIED IN HOLDING THAT INITIAL ASSESSMENT YEAR W ILL BE THE YEAR IN WHICH THE BUSINESS OF THE APPELLANT HAS BEGIN TO OPERATE. THIS FINDING IS SUPPORTED BY PLACING RELIANCE ON TH E DECISION GIVEN BY HON'BLE IT AT MUMBAI BENCH IN THE CASE OF SHEVIE EXPORTS VS. JCIT IN IT A NO. 321/MUM/2012 [33 TAXMA NN.COM 446 (MUM)]. 5.2 THE APPELLANT HAS ESTABLISHED TWO WIND MILL S, ONE IN MAHARASHTRA AND OTHER IN TAMILNADU. THE MAHARASHTRA UNIT HAS COMMENCED PRODUCTION IN THE YEAR RELEVANT TO A. Y. 2006- 07 BUT THE APPELLANT HAS OPTED THE INITIAL ASSESSME NT YEAR FOR CLAIM .OF DEDUCTION AS A.Y. 2009-10. IN THE SECOND UNIT AT TAMILNADU THE PRODUCTION HAS COMMENCED IN THE YEAR RELEVANT TO A. Y. 2005-06 BUT THE APPELLANT HAS OPTED INITIA L ASSESSMENT YEAR FOR THE CLAIM OF DEDUCTION AS A.Y. 2008-09. IN VIEW THAT APPELLANT CASE PERTAINS TO POST AMENDED PERIOD THER EFORE BY VIRTUE OF SECTION 801 A (2) THE OPTION OF CHOOSING INITIAL ASSESSMENT YEARS AS ABOVE BY THE APPELLANT IS AVAIL ABLE TO THE APPELLANT. THE A O 'S RELIANCE ON THE JUDICIAL PRON OUNCEMENTS AS CITED IN ASSESSMENT ORDER IS OF NO RELEVANCE AS THE ASSESSMENT YEARS INVOLVED IN THOSE CASES PERTAIN TO PRE- AMENDMENT PERIOD. THE GROUND NO. 2 OF APPEAL IS ALL OWED. ' 6. THE APPELLANT HAS TAKEN GROUND NO. 3 FOR CLAIM O F CARRY FORWARD OF LOSSES WHICH WERE ALREADY ABSORBED AGAIN ST THE PROFIT OF OTHER BUSINESS. THE AO HAS TAKEN THE YEAR OF COMMENCEMENT OF BUSINESS AS THE INITIAL ASSESSMENT YEAR AND ACCORDINGLY COMPUTED THE QUANTUM OF DEDUCTION. THE AO HAS TAKEN THE LOSSES INCLUDING UNABSORBED DEPRECIATION BY CARRYING FORWARD NATIONALLY WITHOUT SET-OFF AGAINST ANY OTHE R INCOME IN THE RELEVANT ASSESSMENT YEARS. THE APPELLANT HAS CL AIMED THE QUANTUM OF DEDUCTION AFTER SET-OFF OF LOSSES AGAINS T INCOME DERIVED FROM THE BUSINESS OF MANUFACTURING OF HEAVY MACHINERY ETC. IN THE RELEVANT ASSESSMENT YEARS AND AFTER TAK ING THE INITIAL ASSESSMENT YEAR AS OPTED BY THE APPELLANT. ON THIS ISSUE, THE 12 HON'BLE IT AT MUMBAI BENCH IN THE CASE OF SHEVIE EX PORTS VS. JCIT (SUPRA) HAS HELD AS UNDER :- IT CAN HE GATHERED THAT SECTION 801 A(5) IS A NON OBST ANTE CLAUSE WHICH OVERRIDES THE OTHER PROVISIONS OF THE ACT AND IT IS FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION UND ER SECTION 801 A, FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING T HE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR T O BE COMPUTED AS IF THE ELIGIBLE BUSINESS IS THE ONLY SOURCE OF I NCOME. THUS, THE FICTION CREATED IS THAT THE ELIGIBLE BUSINESS IS TH E ONLY SOURCES OF INCOME AND THE DEDUCTION WOULD BE ALLOWED FROM THE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR. IT NOWHERE DEFINES AS TO WHAT IS THE INITIAL ASSESSMENT YEAR. PRIOR TO 1 ST APRIL, 2000, THE INITIAL ASSESSMENT YEAR WAS DEFINED FOR V ARIOUS TYPES OF ELIGIBLE ASSESSEE U/S 80IA(12). HOWEVER, AFTER THE AMENDMENT BROUGHT IN STATUTE BY THE FINANCE ACT, 1999, THE DE FINITION OF 'INITIAL ASSESSMENT YEAR' HAS BEEN SPECIFICALLY TAKEN AWAY. NOW, WHEN THE ASSESSEE EXERCISES THE OPTION OF CHOOSING THE INITI AL ASSESSMENT YEAR AS CULLED OUT IN SUB SECTION (2) OF SECTION 801 A F ROM WHICH IT CHOOSES ITS 10 YEARS OF DEDUCTION OUT OF 15 YEARS, THEN ONLY THE LOSSES OF THE YEARS STARTING FROM THE INITIAL ASSESSMENT Y EAR ALONE ARE TO BE BROUGHT FORWARD AS STIPULATED IN SECTION 80-1 A(5). THE LOSS PRIOR TO THE INITIAL ASSESSMENT YEAR WHICH HAS ALREADY BEEN SET-OFF CANNOT BE BROUGHT FORWARD AND ADJUSTED INTO THE PERIOD OF TEN YEARS FROM THE INITIAL ASSESSMENT YEAR AS CONTEMPLATED OR CHOSEN B Y THE ASSESSEE. IT IS ONLY WHEN THE LOSS HAVE BEEN INCURRED FROM THE I NITIAL ASSESSMENT YEAR, THEN THE ASSESSEE HAS TO ADJUST LOSS IN THE S UBSEQUENT ASSESSMENT YEARS AND IT HAS TO BE COMPUTED AS IF EL IGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME AND THEN ONLY DEDUCTION U NDER SECTION 80- IA CAN BE DETERMINED. THIS IS THE TRUE IMPORT OF SE CTION 80-IA(5). ' FROM THE ABOVE DECISION, IT IS CLEAR THAT THE LOSS WHICH HAVE BEEN INCURRED FROM THE INITIAL ASSESSMENT YEAR IS TO BE CARRIED FORWARDED AND ADJUSTED AGAINST THE PROFIT IN THE SUBSEQUENT A SSESSMENT YEARS AND IT HAS TO BE COMPUTED AS IF ELIGIBLE, BUSINESS IS THE ONLY SOURCE OF INCOME. SO, IN THE INSTANT CASE WHERE THE APPELLANT HAS TWO UNITS AND APPELLANT HAD CHOSEN DIFFERENT INITIAL AS SESSMENT YEAR FOR TWO UNITS, THE LOSSES FOR ADJUSTMENT AGAINST THE PR OFIT BY EACH ELIGIBLE UNIT WILL BE ADJUSTED SEPARATELY AND THE C ARRY FORWARD LOSS WILL BE ONLY ON ACCOUNT OF LOSS OR PROFIT FROM THAT ELIGIBLE BUSINESS UNIT. 6.1 FURTHER, THE HON'BLE IT AT MUMBAI BENCH IN THE CASE OF PIDILITE INDUSTRIES LTD. VS. DCIT [2011] 12 TAXMANN .COM 96 (MUM.) HAS DECIDED ON THE SET-OFF OF LOSSES AND ITS CARRY FORWARD FOR DETERMINATION OF QUANTUM OF DEDUCTION AS UNDER :- 'SECTION 80-IA (5) PROVIDES THAT NO/WITHSTANDING AN YTHING CONTAINED IN THE PROVISIONS OF THE ACT, THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WHICH THE PROVISIONS OF SUB-SECTION (1) APPLY, SHALL FOR THE PURPOSES OF DETERMINATION THE QUANTUM OF DEDUCT ION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUC CEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMEN T YEAR, BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESS DURING THE PREVIOUS YEAR RELEVANT 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 13 MADE. BY VIRTUE OF SUB-SECTION (5), SECTION 80-IA H AS BECOME A STANDALONE PROVISION. THE EFFECT OF SUB-SECTION (5) IS THAT FOR THE PURPOSE OF GRANTING DEDUCTION IN THE INITIAL YEAR O R A SUBSEQUENT YEAR IT SHALL BE CONSIDERED AS IF THE ASSESSEE IS HAVING ELIGIBLE BUSINESS AS THE ONLY SOURCE OF ITS INCOME. IN OTHER WORDS, IF T HERE IS A LOSS IN THE INITIAL-YEAR AND IN THE SUBSEQUENT YEAR THERE IS A PROFIT, DEDUCTION SHALL BE ALLOWED BY CONSIDERING THE BROUGHT FORWARD LOSS IN THE YEAR OF PROFIT. FIRSTLY, SUCH BROUGHT FORWARD LOSS SHALL BE SET OFF AGAINST THE PROFIT OF THE ELIGIBLE UNIT FOR SUCH SUCCEEDING YEAR AND THE DEDUCTION SHALL BE ALLOWED ONLY IF THERE IS NET PRO FIT OF THE ELIGIBLE UNIT, THAT IS, THE PROFIT OF THE YEAR IS SUFFICIENT ENOUGH TO ABSORB THE BROUGHT FORWARD LOSS OF THE UNIT AND ALSO THEREBY L EAVING SOME POSITIVE PROFIT FOR THE CURRENT, YEAR, THIS POSITIO N REMAINS NOTWITHSTANDING THE FACT THAT THE ASSESSEE MAY HAVE SET OFF SUCH LOSS FROM THE ELIGIBLE UNIT AGAINST THE INCOME OF NON-EL IGIBLE UNIT IN THE YEAR OF INCURRING OF SUCH LOSS. BY MEANS OF SUB-SEC TION(S), THE LOSS INCURRED IN THE ELIGIBLE UNIT IS NATIONALLY CARRIED FORWARD TO THE SUBSEQUENT YEARS AND CONSIDERED AS SUCH IN THE SUBS EQUENT YEARS UNTIL IT IS WIPED OUT WITH THE PROFITS OF THE ELIGI BLE UNIT FOR THE SUCCEEDING YEARS. THIS POSITION STANDS DESPITE THE FACT THAT SUCH LOSS MAY HAVE BEEN ACTUALLY SET OFF AGAINST THE INCOME O F NON-ELIGIBLE UNITS IN AN EARLIER YEAR OR EVEN THE VERY YEAR IN W HICH COMMERCIAL PRODUCTION STARTED. ' 6.2 THE HON'BLE ITAT MUMBAI BENCH IN THE CASE O F PIDILITE INDUSTRIES LTD. VS. DCIT (SUPRA) HAS DISCUSSED AT L ENGTH ON THE APPLICABILITY OF DECISION IN CASE OF ACIT VS. GOLD MINE SHARES & FINANCE PVT. LTD. (SUPRA) RELIED BY AO AND NON- APP LICABILITY OF DECISION IN THE CASE OF VELAYUDHASWAMY SPINNING MIL LS (P) LTD. VS. ACIT (SUPRA) RELIED BY THE APPELLANT. IN THE BACKDR OP OF ABOVE DECISION, IT IS FOUND THAT THE AO WHILE COMPUTING T HE CARRY FORWARD OF LOSSES WAS JUSTIFIED IN NOTIONAL SET-OFF OF LOSS ES OF EARLIER YEAR WITH THE PROFIT OF ELIGIBLE BUSINESS WHERE THE LOSSES WE RE COMPUTED WITHOUT SET-OFF AGAINST THE INCOME DERIVED FROM ANY OTHER ACTIVITY OTHER THAN ELIGIBLE BUSINESS ACTIVITY OF WIND POWER PROJECTS SEPARATELY. THEREFORE, THE LOSS INCURRED IN THE E LIGIBLE BUSINESS WITHOUT ANY SET-OFF OF INCOME FROM INELIGIBLE UNIT IS NATIONALLY CARRIED FONVARD TO THE SUBSEQUENT YEARS AND CONSIDE RED AS SUCH IN THE SUBSEQUENT YEARS UNTIL IT IS CLEARED WITH THE P ROFIT OF ELIGIBLE UNIT FOR THE SUCCEEDING YEARS. THEREAFTER, THE REMAININ G PROFIT OF INCOME WILL BE AVAILABLE FOR CLAIM OF DEDUCTION U/S 80IA O F THE ACT. THE GROUND NO. 3 & 4 OF APPEAL ARE DISMISSED. ' 7. THE GROUND NO. 1 RELATES TO QUANTUM OF DEDUCTION U/S 80IA WHICH CAN. BE ARRIVED ONLY AFTER FINDINGS ON 'INITIAL ASS ESSMENT YEAR' AND 'CARRY FORWARD AND SET OFF OF LOSSES' AGAINST PROFI T OF ELIGIBLE BUSINESS AS DISCUSSED IN PRECEDING PARAS. IN VIEW OF AFORESA ID DISCUSSION AND FINDINGS, I AM OF THE VIEW THAT THE INITIAL ASSESSM ENT YEAR IS AVAILABLE TO THE APPELLANT AS OPTED BY THE APPELLANT FOR ITS RESPECTIVE ELIGIBLE BUSINESS UNITS. BUT THE LOSSES WILL BE COMPUTED AND LED FORWARD FOR THE ELIGIBLE BUSINESS UNITS SEPARATELY TREATING THEM AS THE ONLY SOURCES OF INCOME BEGINNING FROM THE OPTED INITIAL ASSESSMENT YEARS. ANY LOSS COMPUTED SINCE THE A.Y. 2009-10 AND A.Y. 2008-09 FO R UNITS AT MAHARASHTRA AND TAMILNADU RESPECTIVELY WILL BE CARR Y FORWARDED WITHOUT SET-OFF AGAINST THE INCOME DERIVED BY THE A PPELLANT FROM THE 14 BUSINESS OF MANUFACTURING OF HEAVY MACHINERY ETC. F OR SET-OFF AGAINST PROFIT IN SUBSEQUENT YEARS. ACCORDINGLY, THE AO IS DIRECTED TO RE- COMPUTE THE CLAIM OF DEDUCTIONS U/S 8 01 A OF THE A CT AND ALLOW DEDUCTION WHILE COMPUTING TOTAL INCOME OF THE APPEL LANT. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 4.8 SINCE THE FACTS REMAIN THE SAME, THE UNDERSIG NED SEES NO REASON TO DIFFER WITH THE ORDER IN THE APPELLANT'S OWN CASE FOR THE 2010-11. IN .VIEW OF FINDINGS IN THE APPELLANT'S OWN CASE FOR A.Y. 2010- 11, THE AO IS DIRECTED TO RE- COMPUTE THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT AND ALLOW DEDUCTION U/S 80IA WHILE COMPUTING TOTAL INCOME OF THE APPELLANT. THUS, THE GROUND NO. 1 IS PARTLY ALLOWED, GROUND NO. 2 IS ALLOWED AND GROUND NO. 3 & 4 ARE SUBSUMED IN DECISIONS ON GROUND NO. 1&2. 9. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER. ON THE OTHER HAND, LD. COUNSEL FOR THE AS SESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT BOARD HAS CLARIFIED THE AB OVE ISSUE IN CIRCULAR NO. 1/2016 DATED 15.02.2016 WHICH READS AS UNDER : THE MATTER HAS BEEN EXAMINED BY THE BOARD. IT IS A BUNDANTLY CLEAR FROM SUB-SECTION (2) THAT AN ASSESSEE WHO IS ELIGIBLE TO CLAIM DEDUCTION U/S 80-IA HAS THE OPTION TO CHOOSE THE INITIAL/ FIRST YEAR FR OM WHICH IT MAY DESIRE THE CLAIM OF DEDUCTION FOR TEN CONSECUTIVE YEARS, OUT O F A SLAB OF FIFTEEN ( OR TWENTY) YEARS, AS PRESCRIBED UNDER THAT SUB-SECTION . IT IS HEREBY CLARIFIED THAT ONCE SUCH INITIAL ASSESSMENT YEAR HAS BEEN OPTED FO R BY THE ASSESSEE, HE SHALL BE ENTITLED TO CLAIM DEDUCTION U/S 80-IA FOR TEN CO NSECUTIVE YEARS BEGINNING FROM THE YEAR IN RESPECT OF WHICH HE HAS EXERCISED SUCH OPTION SUBJECT TO THE FULFILMENT OF CONDITIONS PRESCRIBED IN THE SECTION. HENCE, THE TERM 'INITIAL ASSESSMENT YEAR' WOULD MEAN THE FIRST YEAR OPTED FO R BY THE ASSESSEE FOR CLAIMING DEDUCTION U/S 80-IA. HOWEVER, THE TOTAL NU MBER OF YEARS FOR CLAIMING DEDUCTION SHOULD NOT TRANSGRESS THE PRESCR IBED SLAB OF FIFTEEN OR TWENTY YEARS, AS THE CASE MAY BE AND THE PERIOD OF CLAIM SHOULD BE AVAILED IN CONTINUITY. THE ASSESSING OFFICERS ARE, THEREFORE, DIRECTED TO ALLOW DEDUCTION U/S 80-IA IN ACCORDANCE WITH THIS CLARIFICATION AND AFTER BEING SATISFIED THAT ALL THE 15 PRESCRIBED CONDITIONS APPLICABLE IN A PARTICULAR CA SE ARE DULY SATISFIED. PENDING LITIGATION ON ALLOWABILITY OF DEDUCTION U/S 80 IA SHALL ALSO NOT BE PURSUED TO THE EXTENT IT RELATES TO INTERPRETING 'I NITIAL ASSESSMENT YEAR' AS MENTIONED IN SUB-SECTION (5) OF THAT SECTION FOR WH ICH THE STANDING COUNSELS/D.R.S BE SUITABLY INSTRUCTED. THE ABOVE BE BROUGHT TO THE NOTICE OF ALL ASSESSING OFFICERS CONCERNED. 10. HE HAS FURTHER SUBMITTED THAT IN PRECEDING ASSESSMENT YEAR 2010-11, ITAT CHANDIGARH BENCH IN T HE CASE OF THE ASSESSEE IN ITA 149/2014 VIDE ORDER DAT ED 08.02.2016 DISMISSED THE APPEAL ON IDENTICAL ISSUE AND CONFIRMED THE ORDER OF LD. CIT(APPEALS) DATED 28.11.2013. THE OPERATIVE PORTION OF THE ORDER IN PARA 14 TO 16 OF THE TRIBUNAL IS REPRODUCED AS UNDER : 14. IN VIEW OF THE JUDGMENT OF THE KARNATAKA HIGH COURT, WHICH HAS ALSO BEEN RELIED ON BY THE MUMBAI BENCH OF THE TRIBUNAL AND IN THE BACKGROUND THAT NO JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT HAS BEEN CITED BEFORE US, WE HOLD THAT CHOOSING OF INITIAL ASSESSMENT YEAR FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT IN A BLOCK OF TEN YEARS OUT OF FIFTEEN YEARS IS WITH THE ASSESSEE I.E. IT IS THE OPTION OF THE ASSESSEE TO CHOOSE THE INITIAL ASSESSMENT YEAR FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT. FURTHER, THE LOSS CLAIMED BY THE ASSESSEE IN RESPECT OF ELIGIBLE BUSINESS IS TO BE SET OFF AGAINST THE INCOME OF THE ASSESSEE FROM OTHER INELIGIBLE BUSINESS AS IN RESPECT OF ASSESSMENT YEARS AND THERE IS NOT NEED TO NOTIONALLY CARRY FORWARD THESE LOSSES UP TO THE INITIAL ASSESSMENT YEAR AND WRITE OFF THE SAME OUT OF THE PROFITS OF ELIGIBLE BUSINESS. 16 15. AS REGARDS THE CONTRADICTION ARISING IN THE ORDER OF THE LEARNED CIT (APPEALS) AND THE ASSESSEE NOT BEING IN APPEAL AGAINST THE ADVERSE FINDINGS GIVEN BY HIM, WE WISH TO CLARIFY THAT WE HAVE STATED IN PARA 14 ABOVE, THE POSITION OF LAW AS ON DATE, WITH REGARD TO THE ISSUES ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER. NOW THE ASSESSING OFFICER IS DIRECTED TO GIVE EFFECT AS PER OUR FINDINGS GIVEN IN PARA 14 ABOVE. 16. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. 11. AFTER CONSIDERING RIVAL SUBMISSIONS IN THE LIGH T OF THE FACTS OF THE CASE, BOARDS CIRCULAR AND ORDER O F THE TRIBUNAL DATED 08.02.2016 IN THE CASE OF THE SAME ASSESSEE, WE DO NOT FIND ANY MERIT IN THE DEPARTMEN TAL APPEAL. 12. THE ISSUE IN APPEAL REGARDING TREATING THE INIT IAL ASSESSMENT YEAR IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, HAVE BEEN CLARIFIED BY THE BOARD IN FAVOUR OF THE ASSESSEE VIDE CIRCULAR NO. 1/2016 DATED 15.02.2016 (SUPRA). THE BOARDS CIRCULAR IS BINDING ON THE RE VENUE AUTHORITIES. THE LD. CIT(APPEALS) IN DETAIL CONSID ERED THE IDENTICAL ISSUE INVOLVED IN THE DEPARTMENTAL AP PEAL IN PRECEDING ASSESSMENT YEAR 2010-11 VIDE ORDER DAT ED 28.11.2013 AND FOLLOWING THE SAME ORDER, ALLOWED TH E APPEAL OF THE ASSESSEE. THE ORDER OF THE LD. CIT(APPEALS) DATED 28.11.2013 HAVE BEEN CONFIRMED B Y 17 THE TRIBUNAL BY DISMISSING THE DEPARTMENTAL APPEAL VIDE ORDER DATED 08.02.2016 (SUPRA). THEREFORE, ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF THE SAME ASSESSEE F OR PRECEDING ASSESSMENT YEAR 2010-11 AS WELL AS BOARD S CIRCULAR. NO INFIRMITY HAVE BEEN POINTED OUT IN TH E ORDER OF THE LD. CIT(APPEALS) IN DELETING THE ADDIT ION. THUS, THERE IS NO MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS, ACCORDINGLY, DISMISSED. 13. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED AND CROSS OBJECTION IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAI NI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH MAY,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD