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TMI Blog2013 (7) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses. It is submitted that in the facts and circumstances of the case, the expenditure incurred for the de-bottlenecking of De-hydro generation section of existing Capro Expansion Plant (CEP) is revenue in nature and hence, allowable as revenue expenditure. It is submitted that it be so held now and the addition be deleted now." 3. It was submitted that ld. A.R. this expenditure of Rs. 8,39,417/- is in respect of cost of civil work for the de-bottle-necking of De-hydro generation section of existing Capro Expansion Plant(CED). It was also submitted that this is in the nature of current repairs and no new asset was acquired. He also submitted that this expenditure has not enhanced the production capacity of CEP. Ld. DR of the Revenue supported the orders of authorities below. We have considered rival submissions and perused the material available on record. This issue was decided by Ld. CIT (A) in his order at Para 7.3.2 and for the sake of ready reference, the same is reproduced below. "7.3.2 Regarding the expenditure of Rs. 8,39,417/- on civil work of de- bottlenecking, it is not clear as to who excavation/earth removal was necessary for simply switching from on e catalyst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal i.e. ITA No. 477/Ahd/2010 10. Ground No. 1 is as under:- "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the expenditure of Rs. 98.08 lacs on the release of water and discharge of effluent and pollution control, as revenue expenditure, with the observation that their expenditure did not result in the creation of any specific asset, without appreciating that the expenditure gave an advantage of enduring nature and fell in the capital field, and, for being capital expenditure, it is not always necessary that it results in creation of a new, depreciable asset for the assessee, as settled in the case of CIT vs. Hoogly Mills Co. Ltd. 287 ITR 333 (SC)." 11. The Ld. D.R. of the revenue supported the assessment order whereas the A.R. of the assessee supported the order of Ld. CIT(A). He also submitted that this is now covered in favour of the assessee by Tribunal's decision rendered in assessee's own case for A.Y. 2001-02 and 2005-06. He also submitted that this Tribunal's order is available in paper book. 12. We have considered rival submissions and gone through the order of authorities below. Since no difference in facts cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g maintenance of fire fighting equipments or for replacing some parts of those equipments or whether full new equipments were acquired in those two years i.e. A.Y. 2000-01 and 2001-02. In subsequent years also, Tribunal has decided the issue simply on this basis that the issue is covered in favour of assessee by earlier Tribunal order without examining facts of any of the years. Hence, we feel that it is necessary to examine the facts of the present years as well as facts of those earlier years i.e. 2000-01 and 20001-02 and if it is found that the facts are identical then, of course, issue may be decided as a covered matter but if the facts are different then the issue in the present year has to be decided on the basis of facts of the present year. Hence, we set aside the order of Ld. CIT (A) on this issue and restore the matter back to him for a fresh decision. He should examine the facts of the current year and the facts of those earlier years and then pass necessary order as per law as per above discussion after providing adequate opportunity of hearing to both sides. This ground stands allowed for statistical purpose. 17. Ground No. 3 is as under:- "3(a). On the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses u/s 14A in relation to exempt dividend income. He further submitted that the assessee was having own interest free funds much in excess of investment which amounted to Rs. 79.74 lacs by way of share capital and Rs. 10 lacs by way of reserve and surplus as on 31-03-2006 as against tax free investment of 76 lacs only and the AO could not establish any direct nexus of interest bearing borrowed funds with tax free investment and therefore, no disallowance out of interest expenditure can be made. He also submitted that on similar facts, the Tribunal has decided this issue in favour of the assessee for A.Y. 2004-05 and 2005-06 and in those years, Tribunal has confirmed disallowance of Rs. 5 lacs only in each year on account of other expenses. We have considered rival submissions and because of this fact that interest free own funds is many times more then tax free investments and in view of this fact that the A.O. could not establish any direct nexus between the interest bearing borrowed funds and tax free investment, no disallowance is justified out of interest free expenditure. Tribunal order in A.Y. 2004-05 and 2005-06 is also on similar lines and under the similar facts. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case, the ld. CIT(A) as well as Hon. TAT did not rely on the decision in the case of Chettinad Cement Corporation Ltd. in the ITA No. 1026(MDS)/2005 for A.Y. 2001-02 on the ground that the assessee had captive power generation plant and therefore the claim was not allowable." 24. Ld. D.R. of the Revenue supported the assessment order whereas Ld. A.R. of the assessee supported the order of Ld. CIT (A). 25. We have considered rival submissions and perused the material available on record and gone through the orders of authorities below. It has to be accepted that if this captive power generation plant is not there, the assessee has to purchase power from GEB at the rate at which power is supplied by GEB to its consumer. Hence, this is also true that on account of this captive power generation plant of the assessee, to the extent power is generated by it, there is a saving of the assessee company on account of power expenses to the extent of power produced in units @ power supply rate of GEB. Hence, the income of this power generation plant to compute deduction allowable to the assessee u/s 80IA(4) has rightly been computed by taking the price of electricity supplied by GE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terfere in the order of Ld. CIT (A) on this issue. Accordingly, ground no. 6A is rejected. Regarding ground No. 6B, we find that as per ground no. 3, revenue has raised an issue regarding deletion of disallowance made by the A.O. u/s 14A of Rs. 1,42,82,040/- and while deciding that ground, we have held that disallowance of Rs. 5 lacs is confirmed and balance disallowance is deleted. For this ground also in respect of same amount added by the A.O. in book profit u/s 115JB, we hold that addition to the extent of Rs. 5 lacs is confirmed and the balance addition is deleted. This ground 6B of the Revenue is partly allowed. Regarding Ground No. 6C Ld. D.R. of the Revenue supported the assessment order whereas Ld. A.R. supported the order of Ld. CIT (A). This issue has been decided by ld CIT (A) as per Para12.4 of his order, which is reproduced below for the sake of ready reference. "12.4 I have considered the submissions of the ld. AR and the facts of the case. The provisions of item (i) are clearly applicable in the instant case, since the amount has been withdrawn from a provision made in an earlier year and has also been credited to the profit and loss account in the current year. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amining this aspect, he should decide this issue afresh after providing reasonable opportunity of being heard to both sides. This ground of the Revenue stands allowed for statistical purpose. 31. In the result, Revenue's appeal is partly allowed in the terms indicated above. Now we have take up the CO filed by the assessee i.e. 93/Ahd/2010 32. It was submitted by Ld. A.R. of the assessee that except ground no. 5 other grounds are not pressed. Accordingly, all the grounds except ground no. 5 are rejected as not pressed. 33. Ground No. 5 of the C.O. is as under:- "5. Ld. CIT(A) erred in law and on facts in considering the permit purchase rate of power for calculations of deduction u/s 80 IA at Rs. 4.55 per unit as against correct purchase rate of power of Rs. 5.42 per unit on the basis of the cost of power purchased from GEB. It is submitted that it be so held now." 34. It was submitted by Ld. A.R. that this issue raised by the assessee is interconnected with Ground no. 5A of the Revenue's appeal. He also submitted that the rate of Rs.4.55 was wrongly adopted by the Ld. CIT (A) and the correct rate is Rs. 5.42 per unit on the basis of cost of power purchase from GEB. Ld. D.R. o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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