TMI Blog2012 (10) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... n be attributed to steam - Tax evasion by inter-unit transaction of sale of steam at inflated rate - Held that:- steam produced by the assessee is eligible unit is a by-product and income from sale of steam is the income derived from industrial undertaking - deduction u/s 80-IA is allowable - Assessee to furnish necessary records for the purpose of determining the value of the steam produced and transferred to sugar unit - Decided partly in favor of assessee Interim order of the Appellate Tribunal for Electricity - Held that:- Assessee is not the party to the proceedings - Electricity fixed rate ₹ 3.25 p.u in place of which ₹ 3.48 p.u is adopted by the assessee - AO to disallow ₹ 0.23 and calculate the disallowance base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugar unit. Separate technology is used and loan was also obtained at concessional rate from government agencies like IREDA. The lower authorities are not correct in holding that the power plant was not a distinct unit although all government authorities including the Electricity Regulatory Authority considered it as such. The true principle as laid down by the Apex Court, in the case of Textile Machinery Corporation Ltd., Vs. CIT [supra], directly and squarely applies to the facts of the case. In the instant case, the true test is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is all the same a new an identifiable undertaking separate and distinct from the existing busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing facility. The new unit had power as the main product and apart from servicing the captive consumption in the sugar unit also serviced the cement unit power requirements, which the old captive power plant was not doing and the surplus power is being supplied to APTRANSCO in terms of an agreement. The pricing of power is also subjected to the various power tariff prescriptions. It can be clearly seen that the new undertaking is therefore not formed by the splitting up of the old undertaking. The old undertaking for the manufacture of power still exists. There is no case also made out by the lower authorities that the new undertaking is formed by the splitting up of the existing business. The leaned DR refers to the judgment of the Kera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The learned CIT(A) has erred in fact and law in ignoring the tax evading device contrived by the assessee by showing inter-unit transaction of sale of steam (i.e.,) from power unit to sugar unit at a substantially inflated rate so that the taxable benefits of sugar unit gets substantially reduced and the profits of power unit are covered by 80IA claim. 6. After hearing both the parties on this, we are of the opinion that the same issue was considered by this Tribunal in assessee s own case for A.Y. 2007-08 in ITA No. 931/Hyd/2011. The Tribunal vide order dated 10.2.2012 held as follows: 21. We have considered the rival submissions and perused the materials available on record. We find that the lower authorities did not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heat recovery boiler, which is part of the power undertaking. The power generated by the running of diesel generating set is used in the manufacture of caustic soda. Runniong of diesel generating sets produce heat, which is recovered from the waste heat recovery boiler in the form of steam. During the year ended March, 2002, the total quantity of steam generated is 1,02,295 MT. The said steam is used as power for the manufacture of PVC and limenite and 6,240 MT was used towards internal consumption. Durng the year 66,900 MT of steam was consumed in the manufacture of PVC and 29,065 MT was consumed in the manufacture of limenite. 18.9 The submission of the learned Authorised Representative of the assessee is that since power in the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive unit and thereafter quantification of deduction has to be done in accordance with the order of the Tribunal cited supra. This issue is remitted back to the file of the Assessing Officer with a direction to the assessee to furnish necessary records for the purpose of determining the value of the steam produced and transferred to sugar unit. 8. The next ground by the Revenue is as under: 5. The learned CIT(A) has erred in directing the Assessing Officer to apply the Interim Relief order dated 1.2.2012 issued by the Appellate Tribunal for Electricity to the assessee and to calculate the tariff of ₹ 3.25/- per unit of electricity supplied as per that order though it is not applicable to the assessee as the assessee was not an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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