TaxTMI 
TaxTMI 
2021 (6) TMI 66
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....ed on 29/9/2012, was allowed on certain counts. 2. Therefore on deletion of disallowances/additions made by learned CIT - A were challenged by the ld AO in this appeal before us as per following grounds of appeal "1. Whether on facts and in circumstances of the case, the Ld.CIT(A) is legally justified in deleting disallowance of Rs. 8,27,715 /- u/s 40(a)(ia) of the Act on account of non-deduction of TDS on 'Bank Guarantee Expenses' by ignoring the contents of Notification No. 56/2012 of the CBDT in this regard issued vide F.No. 275/53/2012-IT (B)/SO 3069 (E) dated 31.12.2012 and also by ignoring the fact that the said notification had come into force w.e.f. 1st January, 2013? 2. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting the disallowance of Rs. 6,85,662/- on account of additional depreciation claimed u/s 32 (l)(iia) of the Act without considering the fact that the relevant provisions are affected w.e.f. 01.04.2013? 3. Whether on facts and in circumstances of the case, the Ld CIT(A) is legally justified in deleting disallowance of Rs. 62,96,880/- on account of excess depreciation claimed on electrical installations by ho....
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....n of the coordinate bench in case of Kotak securities Ltd held that it is required to be deducted at source u/s 194H of the act. He further held that notification No. 56/2012, wherein it is provided that the bank guarantee charges are not subject to tax deduction at source, if paid to scheduled bank, shall come into force from 1 December 2013 and does not apply to the assessment year 2012 - 13. Thus he disallowed a sum of Rs. 827,715/- applying the provisions of Section 40 a (ia) of the act. Assessee challenged the same before the learned CIT - A who deleted the disallowance holding that CBDT notification number 56/2012 dated 31 December 2012 as it removes the hardship, it applies retrospectively. The learned assessing officer aggrieved with that is in appeal before us per ground number (1) of the appeal. 5. The learned departmental representative vehemently submitted that when the notification itself is applicable from 1 January 2013, it does not apply to the current year, and therefore learned CIT - A has erred in applying the same for the impugned assessment year. It was further stated that the bank guarantee charges are covered u/s 194H of the act. The learned departmental rep....
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....n case for assessment year 2010 - 11 and also the Notification No 56/2012 of CBDT which has been considered by several coordinate benches and held that same also applies to earlier period then the date of issue of notification, we hold that the assessee was not required to withheld any tax on bank guarantee charges paid to state bank of India and therefore no disallowance would have been made u/s 40 a (ia) of the act. So we confirm the order of the ld CIT (A) . In view of this ground number (1) of the appeal is dismissed. 8. Ground number 2 of the appeal is against the deletion of disallowance of additional depreciation of Rs. 685,662/- u/s 32 (1) (iia) of the act. The assessee has claimed the additional depreciation on the plant and machinery purchased for the power generation plant. The learned AO was of the view that the benefit is available only to those undertaking which are engaged in the business of manufacture or production of any article of thing. Generation of power according to him cannot be equated with the production of any article or thing. Further clause ii(a) , subsection (1) of Section 32 of the act was amended with effect from 1 April 2013 and therefore such addi....
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....isions including the decisions of the Delhi bench of Tribunal in case of NTPC V DCIT vide ITA No. 1438/del/2009 order dated 30/4/2012, the Jaipur bench of the Tribunal in the case of ACIT versus Manglam Cements Ltd vide ITA No 82/Jaipur/2014 and 681/jaipur/2014 order dated 30/1/2017 that the process of the generation of electricity is akin to manufacture of article or thing and therefore the assessee is eligible for additional depreciation. It has further been held that the amendment which has been granted by the finance (No. 2), 2012 with effect from assessment year 2013 - 14 whereby the assessee engaged in the business of generation or distribution of power has specifically been included and held as for claim of additional depreciation. It has been held by the coordinate bench of the tribunal that even prior to the amendment made by the finance act, 2012, the assessee is engaged in generation of generation or distribution of electricity were held to be eligible for additional depreciation. It was accordingly held that the assessee is entitled to additional depreciation on the power plant and the venerable installed during the year. In view of the above, we hold that the assessee ....
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....s own case for earlier years wherein in ITA number 5199/del/2014 dated 15/1/2019 for assessment year 2010 - 11 the identical issue has been allowed. Therefore, the above ground is covered in favour of the assessee. 15. We have carefully considered the rival contention and perused the order of the learned lower authorities. Issue involved in this ground of appeal is quite simple. According to Appendix I (from assessment year 2006 - 2007) in part A Sr No II, it is mentioned that "furniture and fittings including electrical fittings‟ are entitled to depreciation at the rate of 10% on its written down value. The reference is also provided for this entry as per note number 5, which provides that "electrical fittings include electrical wiring, switches, sockets, other fittings and Fans , etc.‟ During the year, assessee has installed certain electrical installations and claimed depreciation on the same by applying the depreciation rate of 15% on its written down value considering it as "plant & Machinery". The claim of the assessee is that electrical installation is plant and machinery, as it is required for functioning of the plant and machinery connected to electrical base.....
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....ts, switches and other fittings and fan etc. We also cannot say in absence of any detail whether the electrical installation falls in this category or not. In view of this, we set-aside this ground to the file of the learned assessing officer with a direction to the assessee to produce the details of addition of plant and machinery and to show that these are not electrical fittings as classified in note number 5 of appendix I (depreciation schedule). In view of this we set aside the ground number 3 of the appeal of the learned assessing officer back to the file of the learned assessing officer with a direction that after examining the details of the electrical installation and giving a proper opportunity of hearing to the assessee, the issue may be decided whether the electrical installations are furniture and fittings or plant and machinery. Thus, Ground no 3 is allowed with above directions. 16. The ground number 4 is with respect to the deletion of disallowance of Rs. 68,799,634/- on account of excess deduction claimed u/s 80 IA (8) of the act. The brief facts shows that assessee is engaged in generation of power and the power so generated is transferred to other units of the a....
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....he sale of power. He relied on the decision of the coordinate bench in case of Jindal steel and Power Ltd (2007) 16 SOT 509 (ITAT) Delhi bench wherein the assessee has adopted the price at which the power is sold by the SEB state electricity board as the market price of the power. He held that the above decision of the coordinate bench has been approved by the honourable Punjab and Haryana High Court in ITA number 53/2008. He further followed the decision of the coordinate bench in case of DCW Ltd versus Additional Commissioner Of Income Tax ITA number 560 and 556 9 /MUM/2008 wherein the identical issue was decided. He further held that argument of the ld AO that the impugned government levies cannot be included since such levies are not payable by captive power units of the appellant is not sustainable legally because while determining the market price composition of the price in the hands of the supplier of power is not relevant since purchaseor/consumer is not concerned with the composition of the price but it is in the hands of buyer needs to be seen. He therefore restored the original deduction claimed by the assessee. Therefore, the learned assessing officer is in appeal befo....
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....y considered the rival contentions and find that here the issue involved is what is the market value in relation to goods or services for the purpose of working out eligible profit for deduction u/s 80 IA of the act. The explanation to Section 8 provides that "market value‟ mean the price that such goods or services would ordinarily fetch in the open market. Naturally, the taxes and duties are not at all fetched by such goods or services but are the levies of the government on transfer of such goods. The price of such goods can never include the government levy. This is the argument of the learned departmental representative. However when an issue has been decided by higher forum, we are duty-bound to follow the same, as judicial discipline demands, more particularly when in assessee‟s own case on identical facts and circumstances the issue was decided. It is apparent that this issue was raised by the learned assessing officer in assessment year 2009 - 10 and the coordinate bench after discussing this issue at length has taken a view in favour of the assessee in ITA number 4449/Del/2010 vide order dated 24/4/2018. Against this order, the revenue preferred an appeal be....