The assessee exercised the option under section 80-IA to treat A.Y. 2002-03 as the initial assessment year for claiming deduction in respect of its eligible power generation undertaking. The Assessing Officer reduced the eligible profits by setting off unabsorbed depreciation relating to earlier years and denied the deduction. The Tribunal allowed the assessee’s claim by following the CBDT Circular No. 1 of 2016 and judicial precedents. Upholding the Tribunal’s order, the Bombay High Court held that section 80-IA(2) gives the assessee the option to choose the initial assessment year for claiming deduction and, once such option is exercised, deduction is available for ten consecutive years from the chosen year. The Revenue’s interpretation of section 80-IA(5) was contrary to the CBDT Circular and the decisions in Velayudhaswamy Spinning Mills Pvt. Ltd v. ACIT (2012)  340 ITR 477 ( Mad)( HC)  G.R.T. Jewellers (India)( (Mad)( HC)  Hercules Hoists Ltd ( Bom)( HC)  and B.G. Chitale( Bom)( HC) . No substantial question of law arose. (ITXA No. 21 of 2020, dated 23-07-2026 ) ( AY. 2003-04)