TaxTMI 
TaxTMI 
2014 (2) TMI 1109
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....rocessed under S.143(1), in the scrutiny assessment that followed the Assessing Officer noticed that the assessee admitted total gross receipts on account of sale of power amounting to Rs.355,60,22,173. The only customer to the assessee, being Andhra Pradesh Power Corporation Ltd., to confirm the correct income offered by the assessee, a letter was addressed to the said customer, calling for the details of purchases made from the assessee company which accordingly furnished the information. On verification of the confirmation letter, the Assessing Officer noticed that the total purchases made from the assessee was shown at Rs.358,49,03,081, and consequently, observing that there was under-reporting of income by Rs.2,88,80,908, the Assessing Officer added the said amount to the income returned by the assessee. 3. The Assessing Officer further noticed that the assessee was in receipt of incentive of Rs.4,31,45,862 for the period from 20.6.2008 to 19.6.2009 based on PLF of 71.85% and the same was not offered to tax for the year under appeal,. Since the assessee company was following mercantile system of accounting, the Assessing Officer was of the view that the assessee should have....
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....or the assessment years 2002-03 and 2006-07, and also placed reliance on a decision of the Apex Court in the case of ACG Associated Capsules Private Ltd. V/s. CIT(343 ITR 89). It was further submitted that an examination of the details of expenses and income would reveal that the items of income are direct result of the eligible business of the assessee. In the written submissions filed before the CIT(A), assessee furnished a table indicating the items of income comprised in the miscellaneous income in question together with the relatable business expenditure, in a tabular form, which reads as under- In Rupees On the basis of the above tabulation, it is submitted that all the above items, except item No.3, building rent of Rs.6,000 from BSNL tower, expense are more than the income, and hence the Assessing Officer is not justified in reducing Rs.70,54,764 from the income from business while computing deduction under S.80IA of the Act. 6. The CIT(A), on consideration of the submissions of the assessee, in the light of the Delhi Bench decision of the tribunal in the cases of Perot Systems Tsi (India ) Ltd. V/s. Asst. CIT(2007 Tax Pub(DT) 1280(Del-Trib); and Birla Soft (India)....
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....ncome-tax(Appeals) erred in confirming the action of the Assessing Officer in not granting deduction u/s. 80IA on reversal of provision of Rs.14,21,001/- made in financial year 2006-07 on account of lenders agent fee to IDBI and written back in Asst. year 2009-10 without stating anything as to why it is not eligible for deduction u/s. 80IA. b) The Commissioner of Income-tax(Appeals) erred in confirming the action of the Assessing Officer in reducing (i) income of Rs.25,000 from lease of fruit trees, (ii) Rs.420 from sale of plastic bags, (iii) Rs.4,839 of recovery of notice pay from an employee and (iv) credit balance of Rs.20,393 of Anagha Exims written back to Profit & Loss Account ignoring the submissions of the Appellant that expenditure of more than these amounts were incurred by the appellant and therefore there is no net income from those items ignoring the decisions of the Hon'ble Supreme Court in the case of ACG Associated Capsules Private Ltd. Vs. CIT(343 ITR 89), wherein it is held that only net income, if any, only is to be considered as income not derived from business. 3. For all of the above and such other grounds......" 9. In grounds No.1 and 2(a) above, th....
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....ount equal to 100% of profits and gains derived from such business for ten consecutive assessment years. Sub-section (4) enumerates the eligible businesses. Sub-section (5) which begins with a non-obstante clause provides that for the purposes of determining the quantum of deduction, profits and gains of the eligible business shall be treated as the only source of income of assessee. In other words, only profits and gains of eligible business would be entitled for deduction u/s. 80IA. 13. On going through the provisions of S.80IA, it becomes clear that it is a code by itself and not dependent upon other provisions of the Act. In fact, sub-section 5 of S.80IA has an overriding effect and excludes application of any other provision of the Act. If we examine assessee's case in the context of the aforesaid statutory provisions, it is to be noted that the eligible business is generation of electricity. Therefore, only profits derived from any activity directly linked with generation of electricity would be eligible for deduction under S.80IA. Considered in the aforesaid backdrop, the amount of Rs.14,21,001, written back on account of reversal of provision made in financial year 2006-....
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....on record, we do not find any infirmity in the order of the CIT(A). Undisputedly, waste oil is bye-product or waste product in the process of generation of power and has direct link with the eligible business of the assessee. Therefore, the CIT(A) was justified in holding that income from sale of waste oil will be eligible for deduction under S.80-IA of the Act. The ground raised in this behalf is rejected. 20. Ground No.2 relates to CIT(A) allowing netting of excess premium paid during the year against refund of premium and to exclude from income the differential amount for computing deduction under S.80- IA. 21. On a perusal of the order of the CIT(A), it is to be noted that, the CIT(A) has allowed the netting off following the order passed by his predecessor in assessee's own case for the assessment year 2002-03 and 2006-07. The findings of the CIT(A) in this respect in assessment year 2006-07 was challenged by the Revenue before the ITAT. The Tribunal, however, in ITA No.1579/Hyd/2008, vide order dated 20.3.2012, has upheld the order of the CIT(A). Since the issue is covered by the decision of the coordinate bench of the Tribunal in assessee's own case, the order passed b....