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2016 (1) TMI 118 - AT - Income TaxElectricity duty exclusion while calculating the transfer price of electricity duty for computing the deduction u/s 80IA - Held that:- This issue has been decided in favour of the assessee by the Tribunal rder in assessee’s own case for AYs 2002-03 to 2005-06 [2014 (7) TMI 554 - ITAT MUMBAI ] wherein held as we do not find any reason for excluding the element of tax and duty while determining the “market value” of the electricity price per unit supplied by the power unit to the assessee as contemplated in sub–section (8) of section 80IA as we have to follow the provisions as contained in section 80IA(8) for determining the market price, which cannot be arrived by reducing the price by any other factors like taxes, duties, etc., as the same are embedded in the price. - Decided in favour of assessee Calculation of deduction u/s 80IA for reducing the pro-rated indirect expenses of the company from the profit of the power units - Held that:- This issue has been decided against the assessee by the Tribunal in assessee’s own case for the earlier years wherein held that the present issue has been decided by the Tribunal against the assessee right from the assessment year 1999–2000 to 2001–02. The Assessing Officer has apportioned indirect expenses which are to be reduced from the profits of the power unit as worked out in detail at Page–20 of the assessment order. This allocation of indirect expenses to arrive at the profit of power unit has been decided by the Tribunal in the earlier years and, therefore, consistent with the view taken therein, we find no reason to disturb the order passed by the learned Commissioner (Appeals) and, accordingly, the same is affirmed on this issue - Decided against assessee Alternative claim of deduction u/s 80IA in respect of integrated power unit in case the claim for deduction for power unit No. 6A & 6B are not allowed - Held that:- This issue has been treated as infructuous by the Tribunal in the earlier years on the ground that it is purely an alternative claim as the claim for deduction u/s 80IA with regard to unit no. 6 has been allowed, therefore, no separate adjudication is required as admitted by the assessee. Accordingly, in this year also this alternative claim of the assessee is treated as dismissed, being infructuous. - Decided against assessee Disallowance of employees contribution to ESI and Provident fund made after due date - Held that:- out of total payment of ₹ 43,23,169/-, sums aggregating to ₹ 42,61,565/-was paid within the grace period, as prescribed in the relevant statute, therefore, there is no question of disallowance of such an amount. Further, these payments have been made/paid much before the due date of furnishing of return of income as per section 139(1), therefore we hold that all the impugned payment is to be allowed as the same is covered by the amendment to section 43B.- Decided in favour of assessee Disallowance u/s 14A on account pro-rated indirect expenses - Held that:- The assessee has earned dividend income of ₹ 48,74,295/-(treated as exempt) as compared to AY 2004-05 which has been dealt by the Tribunal wherein the assessee has earned dividend income of ₹ 7.87 lakhs. The Tribunal has worked out the disallowance on account of administrative expenses after considering the director’s fee and auditor’s remuneration vis-a-vis the earning of dividend income. If we analyze the figures of 2004-05 and the finding of the Tribunal, then disallowance if at all is required to be made in this year looking to the nature of expenses then on reasonable basis it may not be more than 20,000/-. The assessee itself has offered ₹ 8,187/- for disallowance before the AO. Thus, looking into the facts and circumstances, we propose to disallow ₹ 50,000/- for this year also, which will include the disallowance already offered by the assessee at ₹ 8,187/-. - Decided partly in favour of assessee Addition of profit on sale of investment and reduction of loss on fixed assets in computing the book profit u/s 115JB - Held that:- this issue stands covered against the assessee by the Special Bench decision of the Tribunal in Rain Commodities Ltd. v/s DCIT, [2010 (7) TMI 794 - ITAT HYDERABAD ]. Thus, respectfully following the decision of the Special Bench of the Tribunal, we confirm the addition on account of profit on sale of investment in fixed assets while computing the book profit under section 115JB.- Decided against assessee Disallowance of expenses incurred for earning of exempt dividend income - disallowance u/s 14A whether to be included while computing the book profit - Held that:- This issue would be decided against the assessee in view of the decision of Hon’ble Delhi High Court in the case of Goetze India Ltd. [2013 (12) TMI 607 - DELHI HIGH COURT ] wherein Hon’ble High Court has held that disallowance made u/s 14A would be included while computing the book profit. Since we have already confirmed the disallowance of ₹ 50,000/-, therefore, the same shall also be included in the book profit.- Decided against assessee Generation of steam amounts to formation of power or not so as to be eligible for claim of deduction u/s 80IA for Unit No. 6A and 6B - Held that:- The section provides that the assessee must begin to generate power during the period defined under the statue and the impugned assessment year definitely falls within that period. Lastly, insofar as the observation and the conclusion of the Assessing Officer, which are based on similar reasons as given for Unit–1 to 5, the same is also not sustainable as the Tribunal has already decided the issue on these reasoning in favour of the assessee. Thus, we set aside the impugned order passed by the learned Commissioner (Appeals) on this score and hold that the assessee is eligible to claim deduction under section 80IA with regard to Unit–6 also as a stand alone power generating undertaking. - Decided in favour of assessee Allowability of expenses incurred on repair and maintenance of the building - Held that:- The assessee had taken office on lease and to make it fit for use the aforesaid expenses were incurred on plastering, polishing, false ceiling, electrical fittings, fresh carpets etc. These expenses were incurred on the assets not owned by the assessee. The expenditure in question is to give a better look to the office premises and does not result in acquisition of any asset of enduring nature. Hence, the expenditure so incurred is directed to be allowed as revenue expenditure. We may also mention that depreciation, if any, granted by the department considering the said expenditure as capital expenditure be withdrawn.- Decided in favour of assessee Addition on unutilized Modvat credit to the value of closing stock of raw material in view of provisions of section 145A - CIT(A) deleted the addition - Held that:- The finding of fact as recorded by the learned Commissioner (Appeals) that after making the adjustments made by the assessee in the opening stock and purchase and sale, the net effect is nil appears to be based on fact. Thus, we do not find any reason to deviate from such findings of fact which has not been rebutted - Decided in favour of assessee Allowability of deduction u/s 80HHC while computing the book profit u/s 115JB - Held that:- This ground now stands covered against the assessee in view of the retrospective amendment brought in statute in section 115JB by the Finance Act, 2011 w.e.f. 1 st April 2005. Since this amendment is applicable from the assessment year 2005–06 only, hence, this issue will also go against the assessee
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