TaxTMI 
TaxTMI 
2008 (10) TMI 19
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.... For the said reasons, the CIT(A) disallowed the assessee's claim for deduction under Section 80-I. This view of CIT(A) has been affirmed by the judgment of the Tribunal as well as by the impugned judgment of Delhi High Court dated 15.11.2006 in ITA Nos. 1252/06, 1253/06 and 1254/06. Appellant is a multi-state Cooperative Society engaged in the business of manufacturing urea and ammonia at its Plant at Hazira. Appellant used to supply ammonia gas through pipe connections from its plant at Hazira directly to the Heavy Water Plant ("HWP") of the Heavy Water Board ("HWB"). The HWB is a Department of Atomic Energy. The HWP was located next to the appellant's plant. In fact, it is in the precinct of the appellant's plant. On 14.9.1994, an ag....
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....he two plants. According to the Department, receipt of service charges by the appellant accrued to the appellant only out of its own industrial activity and, consequently receipt of such service charges did not qualify as eligible profits under Section 80-I. It is this position taken by the Department, which we are required to examine in this case. At the outset, it may be stated that this case is a stand-alone case. It is a unique matter. Heavy Water Plant is a national asset. In the changed scenario, when civil nuclear installations are going to play an important part, particularly in the context of electricity generation, one needs to examine the process in detail of manufacture of Heavy Water. Unfortunately, in this case, the appe....
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....the Ammonia Plant and which contains deuterium is taken to the HAEP where deuterium is extracted with the help of a solution and the balance gas is once again returned to the Ammonia Plant of the appellant. This indicates two things. Firstly, that HAEP cannot survive without the feeder plant, namely, Ammonia Plant. Similarly, the Ammonia Plant cannot survive as far as the manufacture of Heavy Water is concerned without HAEP because after extraction of deuterium the balance quantity of synthesis gas is returned to the Ammonia Plant (see page 22 of Vol. I of the Paper Book). This aspect needed in-depth consideration by the Tribunal because the basic issue in this case is whether receipt of service charges was or was not directly linked with....
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....ls of assets created and liabilities incurred to the Board. Under clause 19.0, the Board absolves the appellant from any infringement of patent in connection with operational maintenance of HWP. Further, the fees for service charges is based on the quantity produced by the appellant as indicated by clause 30.00. The most important aspect, in our view, is costing, pricing and sharing of revenue between the parties, which was required to be examined by the Tribunal. All these facts were relevant because in this case we are concerned with the issue, namely, receipt of service charges was or was not directly connected or linked with the manufacturing activity carried out in the industrial undertaking of the appellant. The exact meaning of the m....