TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 1019
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....V.Sreekanth, ld. Departmental Representative submitted that the assessee-company claimed deduction u/s 80IA to the extent of ` 1,74,88,012/-. According to the ld. DR, the assessee has no agreement with Tamil Nadu Electricity Board for sale of electricity. However, the assessee produced a copy of the licence agreement executed between one M/s Kanishk Steel Industries Ltd. and the assessee. As per this licence agreement, the assessee was authorized to operate the power generating unit owned by M/s Kanishk Steel Industries Ltd. Therefore, it is clear that the assessee has neither set up the power generating unit nor owns the same. Referring to the provisions of section 80IA of the Act, the ld. DR pointed out that two conditions are to be satis....
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.... deduction u/s 80IA on the profit from generation of power after getting licence from another party, the assessee is entitled for deduction u/s 80IA of the Act. According to the ld. Representative, during the year under consideration, the assessee has taken on lease a new 10MW WHR plant from M/s Kanishk Steel Industries Ltd and the plant was commissioned on 23.9.2008. The assessee entered into an agreement on 26.4.2008 and supplementary agreement on 20.2.2009. According to the ld. Representative, copies of both the agreements are available in the paper book. As per this agreement, according to the ld. Representative, the licensor, M/s Kanishk Steel Industries Ltd owns and operates the steel mill. It is not the business of M/s Kanishk Steel ....
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....as neither set up power generating unit nor owns the same, the ld. Representative submitted that it is not necessary to own the power plant. Referring to section 80IA, more particularly, 80IA(4), the ld. Representative submitted that section 80IA applies to an enterprise carries on the business of operating and maintaining power generating unit. Referring to section 80IA(4)(iv), the ld. Representative submitted that an undertaking which was set up in India for generation and distribution of power from 1st April, 1993 is eligible for deduction u/s 80IA of the Act. Referring to sub-clause(v) of section 80IA(4), the ld. Representative submitted that sub-clause(v) requires that an undertaking shall own the power plant for the purpose of claimin....
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....d also perused the material available on record. The assessee-company is admittedly engaged in generation and distribution of power. The assessee entered into an agreement on 26.4.2008 with M/s Kanishk Steel Industries Ltd. to install a waste heat recovery plant in the premises owned by M/s Kanishk Steel Industries Ltd. M/s Kanishk Steel Industries Ltd. own the entire plant and equipment as per the specification and the plant was in fact installed at Periyaobulapuram, OPG Nagar, Gummidipoondi, Thiruvallur District. The assessee was granted a licence and permit to use plant and equipment for the purpose of generating electricity. It is not in dispute that though the plant was owned by M/s Kanishk Steel Industries Ltd, the assessee was given ....
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....or generation and generation and distribution of power is concerned, the qualification is generation or generation and distribution of power. Read with Sub section (3), the undertaking is not formed by splitting up or the reconstruction of a Business already in existence or formed by the transfer of plant and machinery used for any purpose to a new business. Thus an enterprise which is engaged in the generation or generation and distribution of power, qualifies for a deduction, subject to satisfying sub-clauses in the Section. Considering the fact that the deduction is with reference to the undertaking generating or generating and distributing power, the deduction would be available at the hands of the lessee assessee, which is engaged in t....
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....80IA. The facts herein are that the windmill was already in use by the lessor, which was now sought to be given on lease to the assessee. Thus, if the claim is to fall under clause (a) to subclause (iv) to Sub-section (4), so long as the windmill is one already set up from the qualifying date 1st April, 1993, and it has been in generation of power and distribution of energy thereon, I do not find any ground to reject the plea of the assessee for grant of approval under Section 1O(23G) of the Income Tax Act." 7. We have also carefully gone through the provisions of section 80IA of the Act. Section 80IA clearly says that where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from....