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2013 (8) TMI 810 - AT - Income TaxCapital expenditure or Revenue expenditure - Expenditure on acquiring fire fighting equipments and on safety measures - CIT allowed expenditure as Revenue expenditure - Held that:- even if the expenses are incurred in respect of fire fighting equipments in the present year and in A.Y. 2006-07, it is to be seen as to whether the same is in respect of acquiring new equipments or in acquiring some parts of the existing equipments - No evidence available for previous year - Matter remitted back - Decided in favour of Revenue. Disallowance u/s 14(A) - Held that:- no such disallowance is called for when the own interest free funds is far in excess of investment in tax free securities and the A.O. could not prove any nexus between interest bearing borrowed funds and such investment in tax free securities - However, in previous year disallowance was made therefore - Decided in favour of Revenue. Deduction u/s 80IA(4) - Held that:- assessee is entitled to deduction u/s 80IA(4) of the Income-tax Act 1961 irrespective of whether the product is sold in the market or is used by the assessee itself. This was also held that market value of such own consumption should be considered for working out profits and gains for the purpose of allowing deduction u/s 80IA of the Act. So, this goes to show that the assessee is eligible for deduction u/s 80IA for the power used for own plant as captive consumption - A.O. has compared the rate by which various power supplying companies are purchasing power from the power generating companies whereas the assessee has adopted the price at which electric supplying companies are supplying power to the power consumers - where two views are possible, the view favourable to the assessee should be followed - if own power production was not there, the assessee was required to pay for such power at the same rate at which power is sold by GEB. Hence, because of own power production, the assessee has that much saving in power cost which is the income of power plant - Following decision of CIT vs. Ahmedabad Manufacturing Calico Printing Co. Ltd. [1986 (3) TMI 46 - GUJARAT High Court] - Decided against Revenue. CIT(A) has directed the AO to verify the claim of the assessee that the claim made by the assessee for deduction in respect of LTC was disallowed in earlier year and only to the extent, the liability created by the assessee but disallowed in the assessment only, the writing back of liability can be excluded from income. The matter is restored back by Ld. CIT(A) to the file of A.O. for a decision after verifying the facts.
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