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2017 (11) TMI 1480 - AT - Income TaxDisallowance of deduction u/s 80IA - For generation of cooling power restricted the claim of rate of conversion of 1 Tonne of refrigeration equal to 3.52KW of electric power to 1.02 KW of electric power and for generation of steam power he directed an ad-hoc reduction of 25% of the notion receipts from the sale of steam power - Held that:- That the assessee has generated steam power from bio-gas,(ii) Generation of cooling power from cooling towers and (ii) Cooling Power from Ammonia Absorption Refrigeration Plant These are entitled for deduction under section 80IA of the Act at their plants at Sandila and Chiplun for the AY 2005-06 to 2008-09. We agree with the findings of CIT(A) on the above reasoning recorded. Even, the assessee’s power unit is established as part of existing industrial establishment and the newly established unit itself is an integrated independent unit in which new plant and machinery is put up and that why these is capable of production are classified as newly established undertaking in the given facts and circumstances of the case. Quantum of deduction, the assessee has to take the electricity rate of Maharashtra State Electricity Board and U.P. State Electricity Board as a base for computing the rates. The notional sale value is to be converted from TR to KW, the conversion of the Tons of Refrigeration to Kilowatts being the unit of measurement for electric power, it should be taken at 1 Refrigeration Tonne =3.5168525 KW (rounded off to 3.51 KW). However the details can be verified by the AO at the time of giving effect to this order. Accordingly, this inter-connected issue for claim of deduction under section 80IA of the Act is allowed in favour of assessee. This issue of assessee’s appeals is allowed and that of the Revenue’s is dismissed. Disallowance of distribution expenses - Held that:- As noticed that the issue is common in all the years of the assessee’s appeals and the facts are exactly identical. as concluding that these expenses are incurred wholly and exclusively for the purpose of business. Further, this disallowance is bad in law and must be quashed because no incriminating material was found during the search.- Decided in favour of assessee.
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