Tax Tribunal Upholds CIT(A) Decision on Husk Consumption Costs Allocation

The ITAT upheld the CIT(A)'s decision in a case concerning the allocation of husk consumption costs between a rice mill unit and a power generation plant for assessment years 2012-13 to 2015-16. The ITAT dismissed the revenue's appeals, citing previous decisions and directing the AO to correctly verify and allow the deduction under section 80IA for the assessee. The cross objections filed by the assessee were allowed, resulting in a favorable outcome for the assessee.

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Issues:
Allocation of cost of husk consumption between rice mill unit and power generation plant. Validity of deduction claimed under section 80IA for assessment years 2012-13 to 2015-16.

Analysis:
The appeals were filed by the revenue against the order of the Commissioner of Income Tax(Appeals) related to the allocation of husk consumption cost between the rice mill unit and power generation plant. The Assessing Officer (AO) found discrepancies in the allocation made by the assessee and restricted the deduction under section 80IA for the assessment years 2012-13 to 2015-16. The assessee had claimed the deduction based on allocating 10% of the husk cost to the power plant and 90% to the rice mill. However, the AO estimated the cost of consumption at 55% for the power generation plant, leading to a different deduction amount.

The CIT(A) allowed the appeal of the assessee, citing a previous decision of the ITAT in the assessee's own case for the assessment years 2008-09 to 2009-10. The ITAT upheld the CIT(A)'s decision, emphasizing that the allocation of husk at 10% was reasonable and justified based on the cost of steam allocated between the power plant and the rice mill. The ITAT also referred to a similar decision for the assessment year 2011-12, where the appeal of the assessee was allowed.

Since the facts were identical to previous cases, the ITAT upheld the order of the CIT(A) and dismissed the appeals of the revenue. However, the ITAT directed the AO to verify and allow the deduction under section 80IA correctly for the period entitled to the assessee. The ITAT also allowed the cross objections filed by the assessee in support of the CIT(A)'s order.

In conclusion, the ITAT upheld the decision of the CIT(A) based on previous judgments and directed the AO to verify the deduction claimed under section 80IA correctly. The appeals of the revenue were dismissed, and the cross objections filed by the assessee were allowed.

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