TaxTMI 
TaxTMI 
2022 (12) TMI 32
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....and machinery claimed to be purchased and, further, could not establish the source of payment thereof. The ld. CIT(A) allowed the assessee's claim as the bills and vouchers had been submitted online at E-portal and, two, the source of payment/s finds reflection in the assessee's regular accounts, duly audited, so that there is no scope for invocation of section 69. Aggrieved, the Revenue is in appeal. 3. We have heard the parties, and perused the material on record. 3.1 If the assessee did not indeed furnish the bills and vouchers vide which it claims to have purchased the plant and machinery during the relevant year, the only consequence thereof would be the disallowance of deprecation claimed thereon; the investment therein being duly reflected in the assessee's accounts, which thus also bear the source of payment therefor, none of which, finding mention in the assessee's accounts, has been doubted by the Assessing Officer (AO). So, however, there being nothing on record to exhibit the said furnishing, even if online, of purchase bills and vouchers, the assessee was called upon to adduce the same. This is as an absence thereof would entail disallowance of depreciation, even as ....
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....val had been allowed till then, nor is there anything on record to show, or indeed even a claim qua, any subsequent approval. The assessee's claim of having commissioned the power plant and generation (of 10294804 units) of power from bagasse for captive consumption, on the 'profit' derived from which activity deduction u/s. 80-IA(1) had been claimed, could not therefore be allowed. The assessee's case, on the other hand, is that as despite repeated reminders no approval was forthcoming, it operated the power plant without the said approval, which was essentially for injecting the power produced into the power grid, i.e., for supply in the 33KV line laid for the purpose. The plant was run below capacity at 5 MW, i.e., as required for it's sugar division. Necessary evidence toward the same stands furnished before the ld. CIT(A), being at PB pgs.1-38, who has allowed the assessee's claim for deduction u/s. 80-IA on that basis. 5. We have heard the parties, and perused the material on record. 5.1 The assessee had been allowed an in-principle approval for setting-up a 12.8 MW power plant by the Ministry of Commerce & Industry, GoI, for producing power from the bagasse generated on it....
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....ich the state government (through it's relevant agency) had signified it's willingness to source power from Units, as the assessee's, generating power from a renewable source, as bagasse. The basis for the adoption of the said rate by the assessee is that the same was proposed for being paid thereto by the Government on supply to it's grid (distribution network), which though did not mature as no approval for the said supply was given and, in fact, despite the assessee moving the Hon'ble jurisdictional High Court for the same under it's writ jurisdiction. Apart from the fact that no such rate stands actually allowed to it, the said rate is, as admitted before us, an incentivized rate by the Government of the day toward, as explained by Sh. Bardia, a changeover from fossil fuel based to renewal energy based power generation. No industry would, Sh. Bardia would continue, set-up a power plant, which the assessee does by investing over Rs. 40 cr. in plant and machinery, if the Government had not offered such a rate. That the said rate did not materialize, is another matter. The said rate, he further clarified on being queried thereon, which was initially up to 31/3/2016, stood extended....
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.... may compute such profits and gains on such reasonable basis as he may deem fit. Explanation.-For the purposes of this sub-section, "market value", in relation to any goods or services, means- (i) the price that such goods or services would ordinarily fetch in the open market; or (ii) the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA. (10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom. Provided that in case the aforesaid arrangement involves a specified d....
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.... to the assessee, or even to the industry at large, would be the relevant rate. This is even otherwise understandable as in the event of no power generation, or the same being at less than the assessee's requirement, it would have to purchase (the balance) power (for it's Sugar Division) only therefrom. The proposed rate - which in fact did not materialize, cannot be regarded as the rate at which the assessee's sugar division is to be billed by it's power division for power consumption. Even as observed by the Bench during hearing, the imperatives which led the Government to formulate a policy for promotion of power generation from renewable energy sources, announcing, assuming so, attractive rates, or which led to the withdrawal thereof, explained to us as the onslaught of thermal power units producing cheaper power - which seems a contradiction inasmuch as thermal power is also a fossil fuel based, is an irrelevant circumstance and a consideration extraneous to valuing the goods and services in arriving at the profit on the supply thereof for captive consumption u/s. 80-IA, which is to be sans any ulterior consideration, but guided solely by the market conditions; the market pric....