Issue before court:
- The only issue before Hon’ble court is that whether assessee is entitled to claim deduction u/s 80 IA even though it have been set off losses against the profits from other sources.
Brief Facts:
- Assessee installed windmills and generate windpower during the years in concern.
- Assessee claimed deduction u/s 80 IA after setting off losses incurred and adjusted against the profits of earlier years.
- AO denied deduction but tribunal favoured assessee on this issue and allowed appeal.
Contention of the revenue:
- Revenue contended that the case law relied upon the assessee in case of Velayudhaswamy Spinning Mills P. Ltd Vs. ACIT 340 ITR 477 was challenged before Hon’ble SC and are pending.
- Revenue also relied upon the memorandum explaining provision in the Finance (No. 2) Bill, 1980 which describes that taxable income derived from the new industrial units will be determined as if such units were an independent unit owned by a taxpayer who does not have any other source of income.
- Losses, depreciation and investment allowance of earlier years in respect of the new industrial undertaking, ship or approved hotel will be taken into account in determining the quantum of deduction admissible under the new section 80-I even though they may have been set off against the profits of the taxpayer from other sources.
Contention of the Assessee:
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