The Commissioner of Income-tax-10 v. Hercules Hoists Limited
[Citation -2015-LL-0507-11]

Citation 2015-LL-0507-11
Appellant Name The Commissioner of Income-tax-10
Respondent Name Hercules Hoists Limited
Court HIGH COURT OF BOMBAY
Relevant Act Income-tax
Date of Order 07/05/2015
Assessment Year 2005-06
Judgment View Judgment
Keyword Tags infrastructure facility • distribution of power • quantum of deduction • gross total income • initial assessment • eligible business • source of income • positive income • special bench
Bot Summary: The appeals before the Tribunal arise from the order passed by the Commissioner of Income Tax dated 7th September, 2010, 21st December, 2010 and 13th September, 2011 for four consecutive years. The Commissioner partly allowed the assessee's appeals against the assessment under section 143(3) of the Income Tax Act, 1961 for relevant years but the C assessee was not satisfied with such relief. The assessee claimed loss on account of the om 80-IA unit for all these assessment years viz. The grievance is that the assessee by filing rt revised claim have also claimed these losses in section 80-IA unit as ou carried forward losses and eligible for adjustment against income for subsequent years in eligible unit as share profits under section 80-IA C of the Income Tax Act. Section 80-IA, to the extent om relevant, reads as under : 80-IA Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred B to in sub-section such business being hereafter referred to as the eligible business, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such SRP 5/7 ::: Uploaded on - 13/05/2015 ::: Downloaded on - 16/09/2016 12:29:12 ::: ITXA2485. The deduction specified in sub-section may, rt at the option of the assessee, be claimed by him for any ten consecutive asessment years out of fifteen years beginning from the year in which the undertaking or the ou enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial part or develops a special economic zone referred to in C clause of sub-section or generates power or commences transmission or distribution of power or undertakes substantial renovation and modernisation of the existing transmission or distribution lines. H Notwithstanding anything contained in any other provision of this Act, the profits and gains of an ig eligible business to which the provisions of sub-section apply shall, for the purposes of determining the quantum of deduction under that sub-section for the H assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every y subsequent assessment year up to and including the assessment year for which the determination is to be ba made.


IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION rt INCOME TAX APPEAL NO. 2485 OF 2013 Commissioner of Income Tax-10 ... Appellant Vs Hercules Hoists Limited ... Respondent C WITH INCOME TAX APPEAL NO. 2492 OF 2013 WITH INCOME TAX APPEAL NO. 2498 OF 2013 WITH INCOME TAX APPEAL NO. 2510 OF 2013 Mr. Tejveer Singh for Appellants in all appeals. Mr. J.D. Mistri, senior counsel with Mr. P.C. Tripathi i/b Mr. Atul K. Jasani for Respondents in all appeals. CORAM : S.C. DHARMADHIKARI & A.K. MENON, JJ. THURSDAY, 07TH MAY, 2015 P.C. : 1. This appeal by Revenue challenges order passed by Income Tax Appellate Tribunal dated 13th February, 2013, in Income Tax Appeal Nos.7944/Mum/2011, 7946/Mum/2011, 2255/Mum/2011 and 7943/Mum/2011 pertaining to assessment years 2005-06 to 2008- 09. They are decided by common order. appeals before Tribunal arise from order passed by Commissioner of Income Tax (Appeals) dated 7th September, 2010, 21st December, 2010 and 13th September, 2011 for four consecutive years. Commissioner partly allowed assessee's appeals against assessment under section 143(3) of Income Tax Act, 1961 for relevant years but C assessee was not satisfied with such relief. It, therefore, carried matter to Tribunal in further appeal. h 2. Revenue proposes following question as substantial ig question of law : H Whether, on facts and in circumstances of case and in law, Hon'ble Tribunal was right in holding that loss incurred in business of power y generation which is entitled to deduction under ba section 80 IA can be set off against business income from manufacturing unit ignoring provision of om section 80-IA(5)? 3. In relation to that Mr. Tejveer Singh submitted that B Tribunal's conclusions would have far reaching impact and effect. He relied upon Tribunal's conclusions whereunder ground No.1 of assessee's appeal was referred and preceding paragraphs prior SRP 2/7 ::: Uploaded on - 13/05/2015 ::: Downloaded on - 16/09/2016 12:29:11 ::: ITXA2485.13.doc to such conclusion dealt with that ground. That ground was in respect of determination of business income for relevant years without rt allowing assessee set off of depreciation / loss of its two units viz. ou Windmill 1 and 2, income from which was otherwise eligible for deduction under section 80-IA. C 4. Though Mr. Tejveer Singh would submit that above framed h question is substantial question of law, we invited his attention to ig statement of facts. statement of facts is that respondent- H assessee is engaged in business of manufacture of material handling equipment and generation of power. It has installed windmills and that is unit eligible for deduction under section 80-IA y ba of Income Tax Act. other unit of assessee is not entitled for any such deduction. assessee claimed loss on account of om 80-IA unit for all these assessment years viz. 2005-06 to 2008-09. These losses incurred in eligible unit have been adjusted against profits of ineligible unit viz. manufacturing unit in respective B years. After adjusting these losses, positive income has been determined and tax has been paid. For these years where 80-IA SRP 3/7 ::: Uploaded on - 13/05/2015 ::: Downloaded on - 16/09/2016 12:29:12 ::: ITXA2485.13.doc unit incurred losses, there was no claim for deduction under section 80-IA by assessee. grievance is that assessee by filing rt revised claim have also claimed these losses in section 80-IA unit as ou carried forward losses and eligible for adjustment against income for subsequent years in eligible unit as share profits under section 80-IA C of Income Tax Act. This is mentioned in assessment order for assessment year 2007-08. argument is that Assessing h Officer had disallowed this claim of set off of loss of eligible units ig against income of ineligible units in same year. losses H were, therefore, added in income of assessee. Assessing Officer relied upon decision of special bench of Tribunal at Ahmedabad in case of Gold Mine Shares and Finance Pvt. Ltd. y ba However, Commissioner (Appeals) in appeal by assessee partly granted relief. That partial relief and Tribunal's order, om according to Mr. Tejveer Singh, would raise substantial questions of law. B 5. We find that ground No.1 in assessee's appeal before Tribunal and referred in detail by us herein above and which has been SRP 4/7 ::: Uploaded on - 13/05/2015 ::: Downloaded on - 16/09/2016 12:29:12 ::: ITXA2485.13.doc dealt with by Tribunal from paragraphs 3.2.2 onwards and eventually conclusions recorded by Tribunal would denote that rt above question of law and reproduced by us does not arise from ou same. We have not found anything in Tribunal's order and dealing with grievance of assessee being made subject matter C of present appeals. Thus, this is not appeal projecting grievance that special bench decision has been misapplied and/or h not applied or incorrectly applied. This is not case where losses ig incurred by section 80-IA unit having been set off against H income from non section 80-IA unit that course was impermissible. Tribunal's conclusion in paragraph 5 at running pages 4.0 and 4.1 is thus not made subject matter of challenge in this y ba appeal by Revenue. Revenue question projects applicability of section 80-IA(5). Section 80-IA, to extent om relevant, reads as under : 80-IA (1) Where gross total income of assessee includes any profits and gains derived by undertaking or enterprise from any business referred B to in sub-section (4) such business being hereafter referred to as eligible business, there shall, in accordance with and subject to provisions of this section, be allowed, in computing total income of assessee, deduction of amount equal to hundred per cent of profits and gains derived from such SRP 5/7 ::: Uploaded on - 13/05/2015 ::: Downloaded on - 16/09/2016 12:29:12 ::: ITXA2485.13.doc business for ten consecutive assessment years. (2) deduction specified in sub-section (1) may, rt at option of assessee, be claimed by him for any ten consecutive asessment years out of fifteen years beginning from year in which undertaking or ou enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops industrial part or develops special economic zone referred to in C clause (iii) of sub-section (4) or generates power or commences transmission or distribution of power or undertakes substantial renovation and modernisation of existing transmission or distribution lines. h (5) Notwithstanding anything contained in any other provision of this Act, profits and gains of ig eligible business to which provisions of sub-section (1) apply shall, for purposes of determining quantum of deduction under that sub-section for H assessment year or any subsequent assessment year, be computed as if such eligible business were only source of income of assessee during previous year relevant to initial assessment year and to every y subsequent assessment year up to and including assessment year for which determination is to be ba made. 6. We do not see any reason in our referring to legislative om background and these provisions in further details or considering and interpreting them for present appeals. Once statement of facts B about which there can be no dispute show that there was no deduction claimed under section 80-IA for assessment years in question, then, there was no occasion for Tribunal and equally us to have SRP 6/7 ::: Uploaded on - 13/05/2015 ::: Downloaded on - 16/09/2016 12:29:12 ::: ITXA2485.13.doc gone into these questions. In any event, merely because Tribunal has gone into and considered them, we are not obliged to go into rt same given above admitted factual background. Therefore, by ou clarifying that as and when this question arises and in relation to same assessee in future, if deduction is claimed under section 80- C IA for eligible unit, then, it would be open for Revenue to project all questions and propose them as substantial questions of law. In that h event, they can raise all contentions and equally pertaining to ig setting off of said losses and in relation to eligible section 80- H IA unit from income of non section 80-IA ineligible unit. 7. Keeping that course open and equally contentions of both sides, we dispose of these appeals. They do not raise any substantial questions of law. No costs. A.K. MENON, J. S.C. DHARMADHIKARI Commissioner of Income-tax-10 v. Hercules Hoists Limited
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