{"id":6606,"date":"2013-04-18T09:38:53","date_gmt":"2013-04-18T04:08:53","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=6606"},"modified":"2013-04-18T09:38:53","modified_gmt":"2013-04-18T04:08:53","slug":"hercules-hoists-limited-vs-acit-itat-mumbai-s-80-ia5-loss-of-eligible-unit-even-if-set-off-against-non-eligible-profits-have-to-be-aggregated-carried-forward-for-set-off-against-future-eligibl","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/hercules-hoists-limited-vs-acit-itat-mumbai-s-80-ia5-loss-of-eligible-unit-even-if-set-off-against-non-eligible-profits-have-to-be-aggregated-carried-forward-for-set-off-against-future-eligibl\/","title":{"rendered":"Hercules Hoists Limited vs. ACIT (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (hercules_hoists_80_IA_5.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 80-IA(5): Loss of eligible unit, even if set-off against non-eligible profits, has to be aggregated & carried forward for set-off against future eligible profits
\n<\/strong><\/p>\n

The assessee set up two windmills, the income from which was eligible for deduction u\/s 80IA. The assessee suffered a loss in the said Wind Mills and claimed a set-off of the same against its other income. The AO and the CIT(A) rejected the claim by relying on Gold Mine Shares<\/a><\/strong> 113 ITD 209 (SB) (Ahd) where it was held that in view of s. 80-IA(5), the loss suffered by the eligible unit cannot be set off against the profits of other units \/ other business in the initial year of assessment or subsequent years of eligible years of assessments. The Tribunal had to consider the following legal issues: (i) what is the “initial assessment year<\/em>“?, (ii) whether the loss\/ depreciation from the eligible unit is entitled to be set-off against the other income?, (iii) whether the said loss\/ depreciation of the eligible unit is, after set-off against the other income, still required to be notionally carried forward for set-off against the future profits of the eligible unit? HELD by the Tribunal:<\/p>\n

(i) The “initial assessment year<\/em>” is the year in which the eligible unit commences operations. It is not the year in which the assessee chooses to claim deduction. The requirement of s. 80-IA(5) is that the loss and unabsorbed depreciation of the eligible unit should begin to be aggregated from the “initial assessment year<\/em>” to the last allowable year. The aggregation has to continue for every year irrespective of whether s. 80-IA (1) deduction for that year is exigible or not;<\/p>\n

(ii) If the eligible unit has no profit, the loss & depreciation of the eligible unit is entitled to be set-off against the other income. However, despite such set-off, the loss and depreciation has to be aggregated and notionally carried forward for set-off against the future profits of the eligible unit. <\/p>\n

\nNote<\/strong>: Gold Mine Shares<\/a><\/strong> 113 ITD 209 (SB) (Ahd), Velayudhaswamy Spinning Mills<\/a><\/strong> 340 ITR 477 (Mad) & Anil H. Lad<\/a><\/strong> (Bang) partly followed\/ not followed; Swarnagiri Wire Insulations<\/a><\/strong> (Bang) referred. See also Shevie Exports<\/a><\/strong> (Mum), Hyderabad Chemicals<\/a><\/strong> 137 TTJ 732 (Hyd) & BCAJ Article<\/a><\/strong>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

If the eligible unit has no profit, the loss & depreciation of the eligible unit is entitled to be set-off against the other income. However, despite such set-off, the loss and depreciation has to be aggregated and notionally carried forward for set-off against the future profits of the eligible unit<\/p>\n

Read more ›<\/a><\/div>\n

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