Steam qualifies as power for Section 80-IA deduction, supporting a broad reading of the incentive provision.

Steam generated by an industrial undertaking in the course of producing electricity was treated as "power" for deduction under Section 80-IA(4)(iv) of the Income-tax Act. The provision was read broadly, because it used the wider term "power" rather than confining relief to electrical power alone, and the separate clauses in the section were understood to cover distinct categories of eligible undertakings. The ordinary and scientific meaning of steam, together with the definition of "generate" under Section 2(29) of the Electricity Act, 2003, supported inclusion within the incentive provision. The deduction was therefore available and the Revenue's challenge failed.

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Issues: Whether steam generated by the assessee's power generating undertaking qualified as "power" for deduction under Section 80-IA(4)(iv) of the Income-tax Act, 1961.

Analysis: The undertaking generated steam as a by-product in the process of producing electricity, and steam was treated as a form of energy/power in ordinary and scientific understanding. The provision used the broader expression "power" rather than limiting relief to electrical power alone, and the separate clauses in the provision dealt with distinct categories of eligible undertakings. The meaning of "generate" under Section 2(29) of the Electricity Act, 2003 and the common parlance understanding of steam supported the view that generation of steam fell within the scope of the incentive provision. The interpretation adopted was consistent with the beneficial nature of the deduction provision.

Conclusion: Steam generated by the assessee's industrial undertaking was eligible for deduction under Section 80-IA(4)(iv); the assessee succeeded and the Revenue's challenge failed.

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