Case Law Details
Petronet LNG Ltd Vs DCIT (ITAT Delhi)
Conclusion: Where assessee had existing brought forward losses which were either could not be set off against the profits and if the assessee considered any year as the initial assessment year for the benefit of Section 80IA in such cases, the eligible profits would be determined only after setting off of the losses/ unabsorbed depreciation carried forward in the year the deduction was claimed.
Held: Assessee was a company engaged in the business of operation of port, purchase of LNG etc having port at Dahej in Gujarat. The port undertaking of assessee commenced operations from the F.Y. 2004-05. In the first year of operation, assessee incurred substantial losses. In A.Y.’s 2006-07, 2007-08 & 2008-09, the assessee made profits and the profits were set off against the losses. In the relevant A.Y. 2009-10, assessee also had profits and claimed a deduction u/s 80IA. AO disallowed deduction claimed stating that assessee did not have any profits available for claiming deduction. The business losses/deprecation of earlier years, which had been set off against the income had been notionally brought forward and set off against the profits for the relevant assessment year thereby reducing the profits. Assessee stated that for the purpose of computing deduction u/s 80IA, unabsorbed depreciation of earlier years already set off against income of assessee in the preceding years should not be notionally brought forward and set off under section 80IA(5) for determining claim of deduction. It was held that on a concurrent reading of what constitutes on initial assessment year and the provision for brought forward of losses, the eventual conclusion derived from such reading was that in case assessee had existing brought forward losses which were either could not be set off against the profits and if the assessee considered any year as the initial assessment year for the benefit of Section 80IA in such cases, the eligible profits would be determined only after setting off of the losses/ unabsorbed depreciation carried forward in the year the deduction was claimed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeals have been filed by the assessee and the revenue against the orders of the ld. CIT(A)-7, New Delhi dated 29.05.2015.
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