2019 (7) TMI 1924

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.... This Court vide order dated 19.02.2015 while admitting the matter has framed the following substantial questions of law. "(i) Whether the assessee is entitled to deduction under Section 80-I-A of the Income Tax Act, 1961 in respect of the income derived by it from unit transfer/self-consumption of power cogenerated from the entitled undertaking and to the extent and principles for determination thereof? (ii) Whether the price of the power adopted by the assessee for inter unit transfer/self consumption of power will be the market price as envisaged under sub-Section 8 of Section 80-1-A of the Income Tax Act, 1961? (iii) Whether ITAT was justified in disallowing the peripheral development expenses and garden expenditure? Learned ....

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....mmissioner of Income-tax -IV v. Shah Alloys Ltd., decided on 25.9.2012 and Tax Appeal No. 2092 of 2010 - Commissioner of Income-tax-IV v. Shah Alloys Ltd., decided on 22.11.2011. He has further relied on the decision of Calcutta High Court in the case of Commissioner of Income-tax, Kolkata-IV, Kolkata v. Kanoria Chemicals & Industries Ltd., reported in (2013) 35 taxmann.com 566 (Calcutta) where the court has held as under: "It is price at which assessee transferred electricity generated by it eligible business to its other business which would be considered for purpose of computation of profits and gains of eligible business in terms of section 80-IA(8) and not lesser price at which surplus electricity was sold to Electricity Board." ....

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....see." 10.5 Lastly, the learned counsel for the assessee has relied on the decision of Madras High Court in the case of Tamilnadu Petro Products Ltd. v. Assistant Commissioner of Income-tax reported in 338 ITR 643 where it is held as under: "The revenue's contention had no application to the case on hand. Inasmuch the issue was to be dealt with in the light of section 80-IA and in particular sub-clause (iv) of the said section which provides for the benefit even in respect of electricity generation plant established by the assessee and the income derived from such enterprise of the assessee, it would have to be held that the assessee fully complied with the requirements prescribed under section 80-IA in order to avail the benefits prov....

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....the abovesaid judgment which reads thus: "8. The contention that only whatever power generated from the sale to an outsider or the electricity board, and the profit or gain derived by such sale alone can be taken as profits or gains derived by the assessee as mentioned in section 80-IA(1) of the Income-tax Act has been rejected by the Tribunal in the order impugned. In our considered view, the Tribunal was well justified in having rejected such a stand of the appellant. Having referred to section 80- IA(1) of the Income-tax Act, we are also convinced that what is all to be satisfied in order to be eligible for the deduction as provided under sub-section (1) of section 80-IA, the assessee should have set up an undertaking or an enterprise....