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2016 (8) TMI 1353 - ITAT KOLKATAComputation of deduction u/s 80IA in respect of power generating unit - tax or levy is not be included in the computation of “Transfer Price” of power - Held that:- As decided in assessee's own case as per provisions of Sec. 80IA (8), market price cannot be arrived by reducing the price by any other factors like taxes, duties etc., as the same are embedded in the price. Case of West Coast Paper Mills Ltd. Vs ACIT followed [2006 (4) TMI 184 - ITAT BOMBAY-I] The issue is now covered in favour of the assessee by the decision of Hon’ble Gujarat High Court in CIT vs. Shah Alloys Ltd. (2011 (11) TMI 762 - GUJARAT HIGH COURT) wherein it has been held that electricity duty shall form part of the market value at which electricity is transferred by CPP unit while computing deduction u/s. 80IA. Allocating common expenditure to the power generating units - AO allocated the cost to the power divisions on finding the cost of production of other power generating units on higher side than the production cost of the assessee - Held that:- The borrowed fund was directly used by the assessee for its power divisions. There was no ambiguity with regard to the interest expenses claimed by the assessee in their divisions. The AO has allocated the cost his premise and conjuncture. Case of case of Liberty India vs. CIT (2009 (8) TMI 63 - SUPREME COURT) followed. Deduction u/s 80HHC shall be worked out after adjusting the profit eligible amount of deduction under section 80 IA - Held that:- We find that issue is covered in favour of Revenue and against the assessee in its own case wherein as considered in the light of the provisions of section 80IA(9) of the Act which provides that where any amount of profits or gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under the said section for any assessment year, the deduction to the extent of such profits or gains shall not be allowed under any other provision of Chapter VIA. The deduction for the profits under section 80IA has been allowed in respect of the power undertakings. Most of the energy generated therein has been captively used for manufacture of goods profits whereof are part of profits of business. - Decided against assessee 90% of interest received to be reduced from the profit to work out the eligible deduction under section 80 HHC of the Act - Held that:- This co-ordinate Bench in assessee’s own case (supra) has decided the issue remitted back to the file of AO To examine the nexus between the rent and interest receipts and payments and in case there was such a nexus then only 90% of the net amount was to be exclude from the business profits. Nature of receipt - sales tax incentive received under the west Bengal Incentive Scheme 1993 - revenue or capital - Held that:- Coordinate Bench has decided this issue against the assessee in assessee’s own case he Calcutta High Court in the case of CIT vs. Chhindwara Fuels reported in (2000 (4) TMI 17 - CALCUTTA High Court) held that sales tax subsidy received from the Government was after commencement of production and was not a capital receipt. The assessee’s contention that the subsidy involved in the said case was not under the 1993 Scheme and was different cannot be accepted in view of the decision of the High Court specifically laying down that subsidy on account of sales tax is not a capital receipt. Accordingly the said amount is assessable under the normal provisions of the Act as a revenue receipt. DEPB sale for working out the profit of the business u/s 80HHC - Held that:- Section 28(iiid) of the Act talks about the profit derived on the transfer of DEPB and the face value accrued to the assessee for the DEPB is covered by the provisions of section 28(iiib) of the Act. Hence we conclude that the face value of the DEPB is covered under the provisions of section 28(iiib) of the Act. Judgment of Topman Exports Vs. CIT (2012 (2) TMI 100 - SUPREME COURT OF INDIA) followed. - Decided in favour of assessee.
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