INCOME TAX ACT, 1961

Section 80-IA

Deduction under section 80-IA - Computation - AO set-off loss of earlier years against eligible profit of initial assessment year -

Assessee claimed dedduction under section 80-IA selecting assessment year 2011-12 as initial assessment year. AO held that unabsorbed depreciation or loss of years prior to initial assessment year were required to be set-off against eligible profits and thus the assessee is entitled for deduction under section 80-IA on the reduced amount.Held: It was apparent that eligible business was the only source of income, during previous year relevant to the initial assessment year and every subsequent assessment year. When assessee exercised the option, only losses of the year beginning from initial assessment year alone had to be brought forward and no losses of earlier years which were already set-off against income of assessee. Looking forward to a period of ten years from the initial assessment as contemplated it did not allow revenue to look backward and find out if there was any loss of earlier years and bring forward notionally, even though the same were set off against other income of assessee.

Relied:Velayudhaswamy Spinning Mills P. Ltd. & Ors. v. Asstt. CIT (2010) 340 ITR 477 (Mad) : 2010 TaxPub(DT) 1648 (Mad-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12 to 2013-14

INCOME TAX ACT, 1961

Section 195

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