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2015 (3) TMI 356 - ITAT NAGPURDeduction under section 801A - CIT(A) restricting the deduction under section 801A to ₹ 26,10,28,391 instead of the ₹ 68,48,02,132, as claimed - whether "Market Value" as stated in Sec. 80IA (8) will be the same as the "Sale Price" of the State Electricity Board when the assessee is not incurring any transmission/line losses or administrative or any other charge which the State Electricity Board? - Held that:- An analogy that can be safely deduced is that the market value cannot be the result of a transaction which has been entered into between a buyer and a seller in a situation where one of the parties is carrying the compulsive mandate of the Legislature. The situation before us is such where the aforesaid analogy can be usefully applied. As we have seen earlier, the price at which the power is supplied by the assessee to the Board is determined entirely by the Board in terms of the statutory regulations. Such a price cannot be equated with the market value as understood for the purposes of section 80IA(8) of the Act. The stand of the Revenue to the aforesaid effect cannot be approved. As stated earlier, order of the FAA in the case of Jindal Steel & Power Ltd (2007 (6) TMI 308 - ITAT DELHI ) has been reversed by the Tribunal wherein identical issue was involved. Besides, similar issue had been decided against the department by the Hon'ble Chhattisgarh High Court in the matter of Godavari Power and Ispat Ltd. [2013 (10) TMI 5 - CHHATTISGARH HIGH COURT ]Other cases relied upon by the assessee also support the stand taken by the FAA. Therefore, if she had followed the orders of the Tribunal for the earlier assessment year in respect of proceedings initiated u/s.263 of the Act, in our opinion she has chosen a legal, just and reasonable path.Confirming the orders of the FAA, we decide effective ground of appeal against the AO. - Decided in favour of assessee. Disallowance of sum paid to arrive at a settlement of dispute under the provisions of Factories Act, 1948 - Held that:- AO or the FAA has not mentioned the penal provisions of the Factory Act that were violated by the assessee, that they have not discussed anything about the penalty order passed by the labour law authorities. In absence of the basic fact of payment of penalty by the assessee, it cannot be held that there was infringement of law. Payment made to the workers who had met an accident cannot be termed penalty. Therefore, treating it an allowable business expenditure, we decide ground in favour of the assessee.
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