Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 1289 - ITAT AHMEDABADDisallowance of proportionate interest expenses u/s 36 of the Act - Loan extended to a unit u/s 80IA of the Act Computation of net profit Held that:- The decision in CIT Vs Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] followed - the addition for the assessment year 2007-08 and 2008-09 made on account of disallowance of interest since the term loan obtained by the assessee company from outside source is comparatively much less than own Capital & Reserves - where the assessee has own funds or interest free funds then the presumption would be that such loans extended by the assessee would be from its own funds/interest free funds - Thus, for both the assessment year 2007- 08 and 2008-09 are allowed in favour of the assessee. Set off of losses in co-gen power plant against the profit of paper unit Held that:- The CIT(A) has directed the learned AO to reduce the income of the eligible undertaking viz., power plant claiming deduction u/s 80IA of the Act by brought forward business losses of that undertaking Relying upon ACIT V/s Goldmine Shares and Finance (P).Ltd. [2008 (4) TMI 405 - ITAT AHMEDABAD ] - Assessee has not produced any contrary decisions, there was no reason to interfere in the order of CIT(A) Decided against Assessee. Enhancement of Income chargeable to tax Expenditures diverted Excess coal consumption in Unit II and Unit III claimed - Held that:- The assessee had not co-operated with the CIT(A) during the appellate proceedings satisfactorily by producing all the relevant materials - the CIT(A), after detailed examination of the issue based on the available documents, arrived at the conclusion that the balance cost attributed to HP Steam used in electricity generation in Unit-III would be Rs.41,61,167/-, for which, addition has to be made - the casual attitude of the assessee requires to be discouraged for not co-operating before the Revenue the matter remitted back to the CIT(A) for fresh adjudication Decided in favour of assessee. Depreciation granted on furniture and fixtures of Managing directors residence Held that:- Providing furniture at the residential house of the Managing Director of the assessee company, is nothing but perquisite offered to the Managing Director by the assessee company and, therefore, the same has to be taxed as such in the hands of the Managing Director and at the same time, the assessee company should be allowed depreciation for such assets since it is put to use during the course of the business of the assessee company Decided in favour of Assessee. Inflation of purchases of waste papers from various vendors Held that:- The Assessing Officer has not pointed out any specific purchases as non-genuine - The appellant/assessee had maintained all the evidences of purchases made along with delivery challans, weigh bridge receipts etc. - The appellant/assessee had also produced the suppliers in response to summons issued u/s 131 of the Act - The rejection of books of account of the suppliers cannot be made as a basis for estimating addition in the hands of the appellant/assessee - Payments to all these suppliers were made by cheque and all the purchases were accounted - The CIT(A) has made elaborate finding and he is quite justified by allowing the issue in favour of the assessee Decided against Revenue. Maintenance of books of accounts Held that:- It would be appropriate that for verification of the matter is required - thus, it would be remitted back to the CIT(A) for fresh adjudication Decided in favour of Revenue. Benefit of deduction u/s 80IA(4) of the Act - Treatment of steam Can steam be treated as power or not Held that:- The captive power plant of the assessee is not a plant for generating electricity alone, but it is so designed to generate Low Pressure Steam as well in substantial quantity - the Low Pressure Steam produced by the assessee's plant is not residue by-product, but a product by itself - the assessee company had utilized more quantity of steam in its overall operation with respect to manufacturing of paper than generation of electricity. The assessee was utilizing 60% of steam produced for drying of paper in the paper industry and only 40% was used for generating power/electricity - the LP steam generated from the operation of co-generation plant was residue by-product - The co- generation plant ends up producing two products i.e. electricity and low pressure steam - the co- generation plant installed in the assessee's factory produces two products viz. 60% low pressure steam and 40% high pressure steam generating electricity - When steam held under pressure is released, it contains force which is capable of rotating the turbine - By using coal as fuel, two types of steams are generated one being high pressure steam at 495 degree centigrade having steam enthalpy of 815.95 K. CAL/Kg., which is the input for electricity generation and the other being low pressure steam of 270 decree centigrade having steam enthalpy of 718.4 K. CAL/Kg drawn from the plant for utilizing in the paper drying machine for producing paper - The arguments taken up by the revenue were not before the CIT(A) for consideration thus, the matter remitted back to the CIT(A) for fresh adjudication Decided in favour of Assessee. Adoption of rate of electricity produced Held that:- The decision in Assistant Commissioner of Income-tax- 1(2), Raipur Versus Godavari Power & Ispat Ltd [2011 (11) TMI 107 - ITAT, BILASPUR] - The price charged for such transfer should correspond to the market value of such goods or services on the date of transfer, "market value" for this purpose means the price that such goods or services would ordinarily fetch in the open market - price at which the State Electricity Board supplies power to its consumers is to be considered to be the market value for transfer of power by the assessee's electricity generating undertaking for captive consumption and not the price at which power is supplied by the assessee to the Board Decided against Revenue. Allowability of Interest expenses Unaccounted disclosed income used for renovation of bungalow Held that:- The CIT(A) made a clear finding that no borrowed funds were used by the assessee company for incurring such expenditure since the entire amount was admitted as unaccounted income - the CIT(A) deleted the addition of Rs.6.00 lacs there is no reason to interfere in the findings of CIT(A) Decided against Revenue. Shortage of stock Held that:- Both the parties advanced various arguments in support of the respective claim, but no material was brought on record to arrive at a logical conclusion the issue is remitted back to the CIT(A) for fresh adjudication Decided in favour of Revenue.
|