TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 459
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....earned CIT(Appeals) was justified in accepting the formula of cost in the ratio of energy instead of cost in the ratio of steam pressure as adopted by the A.O.? 3. Whether in the facts and circumstances of the case, the Learned CIT(Appeals) was justified in accepting the efficiency of 85 to 86% instead of further reduction of 15% by the A.O. on the ground that ideal condition rarely exist and even if so it will not be throughout the year? 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. The facts in brief are that during the year the assessee was operating a husk (fuel) based captive power plant which was used by it by....
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....of the case. She requested further that the matter may be set aside to the file of the Assessing Officer to ascertain as to whether assessee has maintained accounts of the two units separately and for the purpose of rate of the electricity unit generated by it. 5. The Learned AR on the other hand tried to justify the First Appellate Order. He submitted that the issues raised in the grounds are fully covered by several decisions cited by the assessee before the Learned CIT(Appeals). He also placed reliance on those decisions while reiterating the submissions made before the authorities below. He submitted that in the assessment year 2008-09, the issue has been decided in favour of the assessee by the First Appellate Authority. 6. Consideri....
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.... - 238 CTR (Mad.) 454 holding that the assessee is entitled to deduction under sec. 80IA in respect of notional income from generation of electricity which was captively consumed by itself. In the case of CIT vs. Orissa Cement Ltd. - 254 ITR 412 (Del.), the assessee had carried on mining operations of lime stone for the manufacture of cement. The first and second appellate authority found that the production of lime stone was done at a stage for the purpose of manufacture of cement and that it was possible, from the audited statement, to compute the profits on the basis of transfer of lime stone to the initial stages at the market price. It was held that the assessee was entitled to benefit of special deduction under sec. 80I in relation to....
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....e Assessing Officer while drawing this trading account has made various assumptions. He has allocated 9/10th of the total expenditure to the electricity generation with the logic of ratios of pressure of steam, the ratios of the pressure of steam entering the turbine and the pressure of the same coming out. The Assessing Officer also did not agree with the assessee for bifurcating the cost. The assessee contended that the method of cost allocation of the Assessing Officer was not scientific. The assessee had filed before the Assessing Officer the calculation of generation of units. As per this, the total rice husk consumption during the year was 37,204 M.T. Each one tone rice husk produced 3.83 M.T. of steam. The steam so produced was at 46....
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.... a copy of which has been placed at page No. 96 to 100 of the paper book. It was further submitted that the power generation is subject to the government regulations and there is regular inspection by the government department and a report of such inspection was also furnished to the Assessing Officer. It was pointed out that during the course of such inspection, a date-wise chart was also prepared monitoring the consumption of raw-material and power generation, a copy whereof was produced before the Assessing Officer in the inspection report calculation regarding the average power generation and the rice husk consumption was shown. Regarding the number of units generated during the year as raised by the Assessing Officer and his statement ....
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.... by the Assessing Officer but the Assessing Officer had reduced the same to Rs. 3 per unit on the basis that when power is sent by the State Electricity Board, it had to incur beyond the generating cost, billing charges and distribution charges. On this basis, the Assessing Officer had that the selling price of the power for the assessee should be 2/3rd of Rs. 4.50 i.e. Rs. 3 per unit. The assessee submitted that computation done by the Assessing Officer does not have any scientific basis. The Assessing Officer agreed with the view that State Electricity Board, selling price was Rs. 4.50 per unit and if that be the case then provisions of sec. 80IC(8) cannot be ignored whereby the profit has to be computed by applying the market rate. The m....