Provision of Sec 80LA prevail over the non obstante sec 70(1) and income/loss from windmill business has to be separately computed and allowed to be set off against future incom

Last updated: 08 February 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Brief stated facts of the case are as follows: The assessee is a partnership firm dealing in automobiles and Sony products and also into generation of electricity from windmills. The assessee filed its return of income for AY 2007-08 declaring income of `.11,52,410/- after setting off of depreciation loss pertaining to windmill installed during the financial year relevant to assessment year under appeal. The AO, in the assessment completed, disallowed loss of `1,22,30,626/- by holding thus: “Section 80IA(5) starts with non-obstante clause reading as ‘notwithstanding anything contained in any provisions of the Act’ which means it overrides all the provisions of the Act. Thus, the income from this source is to be computed independently. The computation to be made is in respect of the eligible business and not in respect of the assessee. It is therefore clear that depreciation in respect of the assets pertaining to the said activities is allowable only to the extent of the income from such activity and any unabsorbed depreciation cannot be set off against any other income. It has to be carried forward for set off only against the income from such business, in subsequent years. This view has been upheld by the Special Bench of Ahmedabad ITAT in the case of ACIT v. Goldmine Shares and Finance Ltd. (2008) 113 ITD 209.”

Citation :
Deputy Commissioner of Income-tax,Circle-1(1), Hubli.…Appellant Vs.M/s.Bellad & Co.Vidyanagar,Hubli.PAN No.AABFB6457D … Respondent