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2015 (2) TMI 1027 - AT - Income TaxUnaccounted parking charges - AO made the addition of ₹ 1.25 lakhs on the basis that the assessee has been realising parking charges which has not been declared in the books of account - CIT(A) deleted addition following his own order for the assessment year 2005-06 - Held that:- Since the basis of addition is survey carried out under section 133A of the Act on September 19, 2007 no such addition is justified in earlier years, i.e., assessment years 2006-07 and 200708. We also find that the Assessing Officer has referred to a letter dated January 13, 2006 written to ICICI Bank which was found in the course of survey but when the Assessing Officer made enquiry from ICICI Bank, it was replied by ICICI Bank that they had not received any such letter and they have not made any such payment to the assessee. Thereafter, the Assessing Officer has made assumptions that the assessee has started realising parking charges directly from the customers but this assumption of the Assessing Officer is without any basis and considering all these facts, we feel that no interference is called for in the order of the Commissioner of Income-tax (Appeals) on this issue because no case has been made out by the Assessing Officer for making addition in the present year. - Decided against revenue. Deduction under section 80-IA of the Act in respect of captive power consumption - CIT(A) allowed the deduction - as per AO assessee-firm was not set up for the generation or distribution of powers but the firm was formed specifically for constructing and running a commercial complex - Held that:- As per partnership deed the assessee-firm is authorised to carry on business of real estate and business of similar nature and/or other business as the partners may mutually decide and agree from time to time. In our considered opinion, the objects clause of the assessee-firm are so wide that it includes any sort of activity being carried on by the assessee as authorised by the said partnership firm and therefore, we do not find any merit in the first objection of the Assessing Officer that the assessee-firm was not set up for the generation of electricity. Higher profit shown for the purpose of claiming extra deduction under section 80-IA - Commissioner of Income- tax (Appeals) has reproduced the detailed working regarding rate per unit of electricity along with the meter reading, etc., and a clear finding is given that rate per unit charged is same as that being charged from other tenants of the building. This finding of the Commissioner of Income-tax (Appeals) could not be controverted by the learned Departmental representative of the Revenue and therefore, in the facts of the present case and as per various judgments cited by the learned authorised representative of the assessee, it cannot be said that there is any merit in this allegation that extra profit has been shown by the assessee in the electricity generation and distribution unit by transferring extra profit from air conditioning unit to generation unit. Non obtaining of permission or approval from the Central Government or the State Government - Enough material has been brought on record by the learned authorised representative of the assessee showing that in respect of generation of power by using diesel generating set and its captive consumption and supply to tenants, no approval or permission from any Government authority is required. Regarding the argument of Revenue that a power generation unit cannot have profit of more than 16 per cent. on the capital invested as per the Electricity Regulatory Act, no such copy of any Act by highlighting such provision has been brought on record and moreover, even if such restriction is there regarding profit of electricity generating company, then such restriction is on account of restricting the rate of electricity to be charged by electricity generating company to common public by holding that such electricity company should not earn higher profit. In the present case, as against supply of power to the tenants and captive power consumption of ₹ 130.83 lakhs, the assessee is showing profit of ₹ 17.54 lakhs whereas in respect of air conditioning undertaking against total receipt of ₹ 135 lakhs, the assessee is showing net profit of ₹ 27.68 lakhs and considering these facts, we are of the considered opinion that in the facts of the present case, the profit reported by the assessee in respect of power generation cannot be said to be excessive or unreasonable particularly when the same rate of power per unit is being charged by the assessee from tenants. Deduction under section 80-IA allowed - Decided in favour of assessee.
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