TaxTMI 
TaxTMI 
2012 (8) TMI 959
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.... In the opinion of the A.O, the annual value of the property was required to be determined u/s. 23(1)(a) of the Act. For getting the information on rent, the A.O used one web site to find out rent for the different sizes of the flat in said area.. After considering the objection of the assessee and relying on the web site results, adopted the annual value (ALV) of the flat at Rs. 30,00,000/- i.e. taking the rent at Rs. 2,50,000/- per month of the said flat as a market rent. The assessee resisted the action of the A.O by challenging the annual value determined by the A.O u/s. 23(1)(a) of the Act. The Ld CIT(A) considering the decision of the ITAT, Pune Bench in the assessee's own case on the issue of the determination of the ALV of the assessee's flat for the A.Y. 2005-06, allowed the ground taken by the assessee. Now being aggrieved, the revenue is in appeal before us. 4. We have heard the parties. We find that identical issue has been considered by the Tribunal in assessee's own case for the A.Y. 2005-06 in the appeal filed by the revenue being ITA No. 1524/PN/2008, order dated 24th September 2010. The operative part of the order of the Tribunal reads as under : "21. We have he....
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....00/- per month from each sister concern. Therefore, the assessee's property is covered by provisions of clause (b) of section 23(1). This is a fact that assessee's actually rent received or receivable in respect of the said property is not in excess of the ALV computed under clause (a) of section 23(1). In the light of these facts, AO's decision to invoke a comparable case to the property covered under clause (b) is not in tune with the above referred legal position. Further, it is not also the case of the AO that assessee is covered by the exemptions provided in the Maharashtra Rent Control Act and, therefore, ALV of the property shall be determined on the basis of the comparable cases. In any case, the standard rent is upper limit for determination the ALV has held in the case of Makrupa Chemicals Pvt Ltd (supra). Therefore, we are of the opinion that the order of the CIT(A) does not call for any interference. 22. Thus, it is not the case of the revenue that the ALV determined by the assessee is less than the standard rent. Considering the above factual and legal position is force, we are of the opinion that the order of the CIT(A) does not call for any interference for the abo....
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....e I.T. Act. iii) Assessee states that the word manufacture or production applies to a case (sic) which brings in to existence a product which is something different from its components and further claims that the generation of power fits in to this definition. However there are no components from which the power is produced. The power gets generated due to wind velocity, it doesn't get produced from components as claimed by the assessee. iv) Asessee doesn't have to pay any excise duty on the 'so called production' of the electricity. Had it been a manufacturing or production of article or thing it would have been covered by the provisions of the Excise Act. Thus, the provisions of section 32(1)(iia) of I.T. Act are not applicable to the newly installed windmills, since those do not fall in the category of 'machinery or plant for the business of manufacturing or production of article or thing". Thus assessee's claim of additional depreciation on windmills is incorrect and therefore deserves to be disallowed." 8. Aggrieved, the assessee carried the issue of additional depreciation on the wind mill before the Ld CIT(A). The assessee forcefully argued that the wind mill is a "pla....
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....e and granted by the Assessing Officer? As discussed earlier, the assessee has claimed additional depreciation for the first time amounting to Rs. 187,55,71,000. Learned Commissioner withdrew this additional depreciation on the ground that Assessing Officer has not conducted inquiry before allowing this depreciation. On merit, Ld. Commissioner has observed that assessee is engaged in the activity of generation of power. Section 32(1)(IIa) of the Act provides additional depreciation to those undertaking which are engaged in the business of manufacture or production of any article or thing. According to the Learned Commissioner, other businesses are not eligible to claim the benefit. He observed that generation of power cannot be equated with the production of article or thing because article or thing in common parlance is known something tangible and moveable etc. Generation of power is giving energy as output and, therefore, this activity is nowhere similar to production of article or thing because an article or thing is always associated with the concept of weight, mass and volume. The power or electricity does not have any of these attributes. It has no volume and it does not occ....
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....can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to that the manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. (See Collector of Central Excise v. Rajasthan State Chemical Works [1991] 4 SCC 473). x x x x x x x x x x 19. In this case, assessee was carrying on business of conversion ofJumbo Rolls of photographic films into small flats and rolls in desired sizes. It claimed deduction under sec. 80-HH and 80-I as well as investment allowance under sec. 32AB. The controversy arose whether conv....
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.... Act, and section 2(d) of the Madhya Pradesh General Sales-tax Act, 1958, in respect of its activity of generation, distruption, sale and supply of electric energy?" 20.1 In order to decide whether Madhya Pradesh Electricity Board is a dealer or not, Hon'ble Court took into consideration the definition of "dealer" as given in the two acts referred in the question and observed that the definition contemplates that any person who carries on the business of buying, selling, supplying or distributing the goods as a "dealer". The expression "goods" are defined by section 2(d) of the Act, 1947 according to which all kinds of moveable properties other than actionable claim............. and include material articles and commodities whether or not to be used in the construction, fitting out, improvement or repair of immoveable property. According to the Hon'ble Court, the definition of expression "goods" contained in section 2(g) of the Act No. 11 of 1959 has almost similar. In the light of these definitions, Hon'ble Court has examined whether electricity can be termed as a goods. The discussion made by the Hon'ble Court in the judgment reads as under: "The reasoning which prevailed wit....
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....e State of Andhra Pradesh and sold the electricity to the Board of Karnataka, Kerala, Tamilnadu and the State of Goa in pursuance of contract of sales occasioning interstate movement of electricity. The Andhra Pradesh Government wanted to levy of duty on certain sales of electric energy. According to the understanding of Andhra Pradesh Government, section 3 of their Sales-tax Act provides that every distributor of electric energy and every producer shall subject to certain exceptions pay every month to the State Government a duty calculated at the rates specified in the table appended thereto on the units of electric energy sold or supplied to a consumer or consumed by himself for his own purpose or for the purpose of his township or colony during the preceding months. Similar steps were taken by the Madhya Pradesh Government for the plants situated in its territorial jurisdiction. The question arose whether electricity sold to other states would be amenable to duties. The Hon'ble Court in that context considered, what is an electric energy and made following observations: "Before we deal with the constitutional aspects let us first state what electricity is, as understood in law....
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.... it be a material agent or merely a property of matter. But as some hypothesis is necessary for explaining the phenomena observed, it has been assumed to be a highly subtle, imponderable fluid, identical with lightning, which pervades the pores of all bodies, and is capable of motion from one body to another.' This characteristic quality of electric energy was judicially noticed in Indian Aluminium Co. etc. etc. Vs. State of Kerala & Ors (1996) 7 SCC 637. Vide para 25 this court has noted, "Continuity of supply and consumption starts from the moment the electrical energy passes through the meters and sale simultaneously takes place as soon as meter reading is recorded. All the three steps or phases (i.e. sale, supply and consumption) take place without any hiatus. It is true that from the place of generating electricity, the electricity is supplied to the substation installed at the units of the consumers through electrical higher-tension transformers and from there electricity is supplied to the meter. But the moment electricity is supplied through the meter, consumption and sale simultaneously take place. "as soon as the electrical energy is supplied to the consumers and is trans....