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2015 (3) TMI 94 - HC - Income TaxSale of bagasse to sister concern - sale at lower rate in comparison to market rate - Tribunal upholding the order of CIT (A) in deletion the addition - Held that:- An agreement with the sister concern at the beginning of the accounting year at consistent rate on which bagasse was sold, throughout the year does not require any interference. Since the rates were fluctuating throughout the year and that the continuous supply of bagasse had to be maintained for producing electricity, the agreement to the sister concern at consistent rate of ₹ 10/- as against the fluctuating market rate of ₹ 7.65 to ₹ 23, the price of ₹ 10/- per qtl. was not unreasonable and thus the agreement between the assessee and M/s U.P. Straw Board Project Pvt. Ltd. was not unreasonable or unjustified. We have upheld the finding of ITAT as finding of fact. - Decided in favour of assessee. Depreciation on tubewell - Tribunal upholding the order of CIT (A), who directed to treat tubewell as a plant - whether the Tribunal was right in law in failing to allow investment under Section 32A of the Act on canteen equipment and water coolers having failed to appreciate that these items are also plant and machinery? - Held that:- So far as factory cleaning machines are concerned, the Tribunal has upheld the view of the CIT(A) and also noted that the investment allowance had been granted on such items in the earlier years. The AO's order has not discussed this issue. The reasons given by the Department for not granting investment allowance is clearly erroneous and the Tribunal was right in directing the ITO to allow investment allowance on calculators for the year 1979-80 and factory cleaning machines for the asst. yr. 1980-81. - Even if sugar mill is not water intensive industry, we cannot visualise that industry can run without water. The water drawn from tubewell may be stored in tanks. The water is essential for the purposes of various processes involved in manufacture of sugar and its byproduct such as molasses and bagasse. It cannot be said that use of water is not necessary for manufacturing of sugar. In the circumstances, we hold that the tube well including its machinery and building would be used for the purpose of business or profession would fall within the definition of word 'plant' and on which depreciation would be allowed under Section 32 (1) of the Act. - Decided in favour of the assessee Deduction being receipt on account of extra sale price realized on sale of sugar in open market out of levy quota - Tribunal alowed claim - Held that:- Question is covered by the judgment in CIT v. Ponni Sugar and Chemical Ltd., (2008 (9) TMI 14 - SUPREME COURT ) and CIT v. Kisan Sahkari Chini Mills Ltd., (2009 (5) TMI 72 - ALLAHABAD HIGH COURT) and is decided in favour of the assessee Non admissibility of depreciation on revalued of asset for the purpose of computation of income u/s. 115J - Held that:- As relying on CIT Bareilly v. Rampur Distillery and Chemicals Ltd., [2013 (1) TMI 59 - ALLAHABAD HIGH COURT] decided in favour of the assessee
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