TMI Blog2013 (8) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... s used by the assessee itself. This was also held that market value of such own consumption should be considered for working out profits and gains for the purpose of allowing deduction u/s 80IA of the Act. So, this goes to show that the assessee is eligible for deduction u/s 80IA for the power used for own plant as captive consumption - A.O. has compared the rate by which various power supplying companies are purchasing power from the power generating companies whereas the assessee has adopted the price at which electric supplying companies are supplying power to the power consumers - where two views are possible, the view favourable to the assessee should be followed - if own power production was not there, the assessee was required to pay for such power at the same rate at which power is sold by GEB. Hence, because of own power production, the assessee has that much saving in power cost which is the income of power plant - Following decision of CIT vs. Ahmedabad Manufacturing Calico Printing Co. Ltd. [1986 (3) TMI 46 - GUJARAT High Court] - Decided against Revenue. CIT(A) has directed the AO to verify the claim of the assessee that the claim made by the assessee for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this decision of Ld. CIT(A) because even if the expenses are incurred in respect of fire fighting equipments in the present year and in A.Y. 2006-07, it is to be seen as to whether the same is in respect of acquiring new equipments or in acquiring some parts of the existing equipments. The Tribunal order in respect A.Y. 2006-07 is not available to us but the same for A.Y. 2003-04, 2004-05 and 2005-06 are available on page 121, 122, 133 and 148,149 of the paper book respectively. In all these years, the Tribunal has followed earlier Tribunal order for A.Y. 2001-02 2002-03 etc and earlier orders are not available before us. In the absence of lead order for the first year, when the Tribunal allowed such claim for the first time, it is not possible to find out what is the basis of allowing such claim and what was facts of that year. Hence, we feel that this issue should be decided afresh by Ld. CIT(A) after bringing on record the first order of the Tribunal on such issue and after examining and comparing facts of that year and present year. We set aside the order of Ld. CIT(A) on this issue and restore back this matter to his file for a fresh decision in the light of above discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue supported the assessment order whereas Ld. AR of the assesses supported the order of Ld. CIT(A). He also submitted that the own funds of the assessee is far in exceeds of the investment made by the assessee in tax free securities and the quantum of borrowed funds has reduced. He also submitted that on 31-01-2007, own funds were Rs. 79.09 lacs in the form of share capital and Rs. 1285.5 lacs in the form of reserve and surplus as against tax free investment of only Rs. 19.5 lacs. He also submitted that the A.O. could not prove any nexus between the interest bearing funds and the investment made by the assessee in these tax free securities. In A.Y. 2004-05 and 2005-06, Tribunal has deleted the entire disallowance in respect of interest expenditure but confirmed the disallowance of 5 lacs in a year for other expenses under section 14(A). He submitted that these orders of Tribunal for A.Y. 2004-05 and 2005-06 are available on pages 133-135 and 149-150 of paper book respectively. 8. We have considered rival submissions and perused the material available on record and gone through the order of authorities below and the Tribunal decision cited by Ld. A.R. of the assessee. Regarding d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd and gone through the orders of authorities below. We find that this issue was decided by Ld. CIT(A) at para 6.2 in his order and for the sake of ready reference, the same is reproduced below. "6.2 I have considered the submissions of the ld. AR and the facts of the case. The taxability of the amount is not in dispute. The only issue is regarding the year in which the impugned amount would be taxable. According to the appellant, the amount of subsidy would accrue only on the quantification of the amount as well as sanction of the amount by the competent authority. In this case, the competent authority released the aggregate subsidy of Rs, 1631.00 lakhs on 9th May, 2007and 14th May, 2007, in respect of second, third and fourth quarters respectively. The subsidy of first quarter had been received earlier and was duly accounted for in the accounts as income of the current year Accounting Standard-12 on "Accounting for Government Grants" has been specifically prescribed for dealing with cases of grants and subsidies. As per AS-12, "Government grants should not be recognized until there in reasonable assurance that (i) the enterprise will comply -with the conditions attached to them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision rendered in Alembic Ltd (supra). Ld. A.R. supported the order of Ld. CIT(A). He also stated that this issue is covered in favour of the assessee by the judgment of Hon'ble Gujarat High Court rendered in the case of CIT vs. Ahmedabad Manufacturing and Calico Printing Company Ltd as reported 162 ITR 760. 15. We have considered rival submissions and perused the material available on record and gone through the orders of authorities below and various Tribunal decisions which are in favour of the assessee and also Tribunal decision rendered in the Chetinad Cement Corporation which is in favour of the revenue. We find that in the case of CIT vs. Ahmedabad Manufacturing Calico Printing Co. Ltd. (supra), it was held by the Hon'ble Gujrat High Court that assessee is entitled to deduction u/s 80IA(4) of the Income-tax Act 1961 irrespective of whether the product is sold in the market or is used by the assessee itself. This was also held that market value of such own consumption should be considered for working out profits and gains for the purpose of allowing deduction u/s 80IA of the Act. So, this goes to show that the assessee is eligible for deduction u/s 80IA for the power used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered rival submissions and since this issue has already been decided by the Tribunal in favour of the assessee in A.Y. 2004-05 and the decision of Ld. CIT(A), is on that line, no interference is called for on this issue from our side. This ground is also rejected. 18. Ground No. 6 reads as under:- "6. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in directing to allow relief to assessee of excess provisions for LTC written back of Rs.21,49,80,841/- which was not claimed in the return of income, but submitted after the hearing was concluded. On the facts and In the circumstances of Hin case the ld. CIT (Appeals) erred in view of Hon'ble Supreme Court decision in the case of Goetz (India) Ltd. vs. CIT 157 Taxman l (SC)." 19. Ld. D.R. supported the assessment order whereas Ld. A.R. supported the order of Ld. CIT(A). He also submitted that the break-up of Rs. 24.49 crores is available on page No. 92 of the paper book. He further submitted that this break-up includes an amount of Rs. 1899 lacs which was disallowed by the A.O. in A.Y. 2003-04 and the same can be seen in the assessment order for that year available on page No. 107 of the paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uticorin Alkali Chemicals Fertilizers Ltd. vs CIT 227 ITR 172 (SC). 7(b) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the adjustment of book profit u/s 115JB by the disallowance of expenses of Rs. 1,89,56,647/- in relation to estimated interest which does not form part of total income." 22. Ld. D.R. supported the assessment order whereas Ld. A.R. supported the order of Ld. CIT(A). He also submitted this issue is now covered in favour of the assessee by the Tribunal order in assessee's own case for A.Y. 2004-05 2005-06 as available on pages 138-142 of the paper books respectively. Regarding second aspect i.e. regarding addition in book profit in respect of disallowance u/s 14A, it was submitted that in the ground regarding deletion of disallowance itself, the Tribunal in earlier year has deleted the disallowance on account of interest expenditure and only confirmed the disallowance of Rs. 5 lacs in respect of other expenses. He submitted that for the book profit u/s 115JB also, similar addition of Rs. 5 lacs only was confirmed. He submitted that in the present year also, similar ground is raised by the assessee for computing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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