Tax Tribunal grants relief for multiple assessment years, allows deductions under Section 80IA, directs interest computation.

The Tribunal allowed the appeals for the assessment years 2007-08 and 2008-09, quashing the reassessment orders. For the assessment years 2009-10 and 2010-11, the Tribunal partly allowed the appeals, granting the deduction under Section 80IA and directing the AO to compute the interest under Sections 234A, 234B, and 234C as per the law.

---

---

Issues Involved:
1. Allowability of deduction under Section 80IA of the Income Tax Act.
2. Levy of interest under Sections 234A, 234B, and 234C of the Income Tax Act.
3. Reopening of assessment under Section 147 of the Income Tax Act.

Detailed Analysis:

1. Allowability of Deduction under Section 80IA of the Income Tax Act:
The primary issue was whether the assessee's turbine division qualified as a new industrial undertaking eligible for deduction under Section 80IA. The assessee claimed that it had established a new undertaking by installing new FBC boilers and steam turbines, which resulted in the generation of power and steam. The Assessing Officer (AO) and Commissioner of Income Tax (Appeals) [CIT(A)] denied the deduction, arguing that the turbine division was not an independent unit but a reconstruction or splitting up of the existing paper division. They contended that the steam production was essential for the paper production and that the new system merely replaced the old one to make the paper industry more energy-efficient.

The Tribunal examined the legal provisions and past judgments, emphasizing that a new unit must have a separate and independent existence capable of producing goods independently of the old unit. The Tribunal found that the assessee had established a distinct industrial undertaking for power generation, with separate premises, technology, and financial investments. The Tribunal noted that the new unit was not formed by the splitting up or reconstruction of the existing business, as it involved new machinery and separate approvals. Consequently, the Tribunal allowed the deduction under Section 80IA, ruling in favor of the assessee.

2. Levy of Interest under Sections 234A, 234B, and 234C of the Income Tax Act:
The next issue was the levy of interest under Sections 234A, 234B, and 234C. The Tribunal stated that the charging of interest under these sections is consequential and mandatory. Therefore, the Assessing Officer must compute the interest in accordance with the law. This issue was resolved by directing the AO to compute the interest as per the statutory provisions.

3. Reopening of Assessment under Section 147 of the Income Tax Act:
For the assessment years 2007-08 and 2008-09, the AO reopened the assessments based on the findings for the assessment year 2009-10. Since the Tribunal ruled in favor of the assessee for the assessment year 2009-10, allowing the deduction under Section 80IA, the basis for reopening the assessments for the earlier years no longer existed. Consequently, the Tribunal quashed the reassessment orders for these years. As the reassessment orders were quashed, the Tribunal did not find it necessary to adjudicate the other grounds raised in these appeals.

Conclusion:
The Tribunal allowed the appeals for the assessment years 2007-08 and 2008-09, quashing the reassessment orders. For the assessment years 2009-10 and 2010-11, the Tribunal partly allowed the appeals, granting the deduction under Section 80IA and directing the AO to compute the interest under Sections 234A, 234B, and 234C as per the law. The judgment was pronounced in the open court on December 18, 2015, in Chennai.

---