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2016 (3) TMI 743 - AT - Income TaxDeduction u/s 80IA - whether it is not a case of works contract - Held that:- In the case before us, the entire power plant was established by M/s Kanishk Steel Industries Ltd. The assessee was given the licence to operate and generate electricity by an agreement dated 26.4.2008. The consideration of the agreement is supply of 9 million units of power generated in every financial year. If the production of electricity is less than 9 million units in any financial year then the assessee shall compensate to M/s Kanishk Steel Industries Ltd. by an amount equal to the value of such shortfall of electricity on the basis of the rate on which Tamilnadu Electricity Board supplies electricity. Even though there is no express agreement in respect of the electricity generated over and above 9 million units in every financial year, there is no obligation on the part of the assessee to supply the same to M/s Kanishk Steel Industries Ltd. In other words, the assessee may use the electricity generated over and above 9 million units in any financial year in accordance with its discretion. The agreement for licence does not provide for payment of any commission to the assessee by M/s Kanishk Steel Industries Ltd. In those facts and circumstances, this Tribunal is of the considered opinion that it is not a case of works contract as contended by the ld. DR. It is a simple case of a licence to operate the power plant set up by M/s Kanishk Steel Industries Ltd. Since the income of the assessee includes profits and gains derived from generation of power, this Tribunal is of the considered opinion that in view of the judgment of Madras High Court in the case of M/s K.A Infrastructure Pvt. Ltd. (2011 (10) TMI 641 - MADRAS HIGH COURT), the assessee is eligible for deduction u/s 80IA of the Act - Decided in favour of assessee.
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