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2013 (1) TMI 219 - HC - Income TaxReopening of assessment - non-eligibility of deduction u/s 80IA in respect of the steam turbine of the combined cycle gas power stations belonging to the petitioner - AY 2000-01 - Held that:- The entire process of generation of electricity, both by the gas turbine unit and the steam turbine unit, has been explained by the petitioner in great detail in the assessment proceedings for the assessment year 1998-99 which has been taken notice of by the AO. He was fully aware that there is a gas turbine unit which generates electricity and which has a waste product which is in the form of hot waste gases. It is through the technology of the waste heat recovery boiler that these hot waste gases are utilized for driving the steam turbine which, in turn, generates additional electricity. So both the gas turbine as well as the steam turbine generate electricity independently. It is another matter that the waste product of the gas turbine is utilized as the only input for driving the steam turbine. It was not as if it was a fact or a figure hidden in some books of accounts which the AO could have, with due diligence, discovered but had not done so. The AO had asked specific queries with regard to the manner of functioning of the two units and the petitioner had provided detailed answers. All facts were staring the Assessing Officer at his face. He could have drawn his own inferences and, in fact, he did by treating them as separate units. On the very same facts, he is now trying to draw a different set of inferences which is nothing but a mere change of opinion. The inspection report of September, 2004 does not indicate anything new. While considering the fuel cost argument in the earlier assessment year, when the matter travelled right up to the Tribunal, the entire factual position was examined by the AO, the CIT (A) as well as by the Tribunal and also by the Committee on Disputes and the two units were treated as separate units.Therefore, this is not a case where the assessee/ petitioner can be said to have failed to disclose fully and truly all material facts necessary for assessment in respect of the assessment year 2000-01 - in favour of assessee. Taxability of income tax recoverable by NTPC from the State Electricity Boards - amount of income tax recoverable by NTPC from the State Electricity Boards for the assessment year 2000-01 have not been fully reported by NTPC Limited as revenue receipts and instead major portions of such amounts had been kept out of the credit side of the Profit & Loss Account - Held that:- Petitioner had paid tax on the generation income by grossing up the rate of tax instead of grossing up the income. The rate of grossed up tax is 62.60162% as against the normal rate of 38.50% [35% tax + 10% surcharge] - By virtue of either method, the total tax payable by NTPC, as per the assessment order would come to Rs. 1819.05 crores. Therefore, this is a clear case where no income has escaped assessment. Also that there was no failure to disclose material facts inasmuch as the figures which have been referred in the recorded reasons were all taken from the audited accounts and, in any event, the respondent No.1 has not alleged as to which material fact was omitted to be disclosed. There was due application of mind on this issue at the stage of the original assessment itself as there was a reference of issue of grossing up - thus as no income has escaped assessment no reopening is warranted - in favour of assessee.
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