TMI Blog2016 (2) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee was wrong, we are of the view that Learned CIT(Appeals) has rightly accepted the above contention of the assessee that observation of the Assessing Officer that the assessee had allocated cost in proportion to temperature was not correct. CIT(Appeals) has dealt with the issue and observed that the perusal of the submissions of the assessee shows that it had computed its calculation at 85% of the efficiency itself. The assessee considering the efficiency at 8% to 86% had computed the power transferred to paper unit at 39,06,143 units, clearly demonstrating that the assessee himself had computed the efficiency by reducing the same to 85 to 86% and therefore, the Assessing Officer was not justified in further reducing the same by another 15%. In absence of specific rebuttal of the above facts by the Revenue before the ITAT, we do not find reason to interfere with the findings of the Learned CIT(Appeals) in this regard The Assessing Officer agreed with the view that State Electricity Board, selling price was ₹ 4.50 per unit and if that be the case then provisions of sec. 80IC(8) cannot be ignored whereby the profit has to be computed by applying the marke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers on the basis of the assessment order for the assessment year 2008-09 wherein a similar disallowance was made. The Assessing Officer also made disallowance on the basis that nobody can earn profit out of oneself as transfer of power from one unit to another unit cannot be said to be sold, power generated by the assessee was primarily to reduce cost of power and fuel expenditure of other unit, profit computed by the assessee for generation of power was not correct, assessee has not submitted project viability report, number of units generated during the year, while computing the profit of the power undertaking is regarding the rate of the electricity etc. Before the Learned CIT(Appeals), the assessee tried to meet these objections of the Assessing Officer and being satisfied therewith, the Learned CIT(Appeals) has accepted the claimed deduction against which Revenue is in appeal before the ITAT on the issues raised in the above grounds. 4. In support of the grounds, the Learned Senior DR placed reliance on the assessment order. She reiterated the objections raised by the Assessing Officer justifying the rejection of the claimed deduction, which have been discussed hereinabove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income from generation of electricity which was captively consumed by itself. In the case of CIT vs. Orissa Cement Ltd. 254 ITR 412 (Del.), the assessee had carried on mining operations of lime stone for the manufacture of cement. The first and second appellate authority found that the production of lime stone was done at a stage for the purpose of manufacture of cement and that it was possible, from the audited statement, to compute the profits on the basis of transfer of lime stone to the initial stages at the market price. It was held that the assessee was entitled to benefit of special deduction under sec. 80I in relation to the profits derived from the production of lime stones. Again in the case of CIT vs. Chitran Co. Pvt. Ltd. 191 ITR 96 (Madras), it has been held that in order to claim relief under sec. 80I of the Act, the assessee should be engaged in the production of manufacture or one or more or the items enumerated in Schedule-VI to the Income-tax Act, 1961, in which case the assessee should be regard as engaged in a priority industry. The emphasis for grant of relief is on the manufacture of one or more of the item enumerated in Schedule VI. Whether the items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m pressure for allocation of the cost which cannot be a basis. It was contended that measurement has to be done in terms of energy which has to be measured in kcl. In absence of any reason given by the Assessing Officer as to why the formula used by the assessee was wrong, we are of the view that Learned CIT(Appeals) has rightly accepted the above contention of the assessee that observation of the Assessing Officer that the assessee had allocated cost in proportion to temperature was not correct. 8. The third contention of the Assessing Officer was that the assessee had not submitted project viability report. Meeting out this objection, the assessee submitted that it had furnished to the Assessing Officer information about the power plant at Annexure to the letter dated 13.12.2010, a copy of which has been placed at page No. 96 to 100 of the paper book. It was further submitted that the power generation is subject to the government regulations and there is regular inspection by the government department and a report of such inspection was also furnished to the Assessing Officer. It was pointed out that during the course of such inspection, a date-wise chart was also prepared mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t State Electricity Board, selling price was ₹ 4.50 per unit and if that be the case then provisions of sec. 80IC(8) cannot be ignored whereby the profit has to be computed by applying the market rate. The market rate has to be the price at which power is being sold in the open market. If the assessee bought power from UP State Electricity Board, it would be have been required to pay ₹ 4.50 per unit. Considering these submissions, the Learned CIT(Appeals) has come to the conclusion that the Assessing Officer was not justified in reducing the per unit price to ₹ 3 per unit as against ₹ 4.50 per unit. In this regard, the cl has also taken strength from the decision of Mumbai Bench of the ITAT in the case of DCW Ltd. vs. ACIT (2010) 132 TTJ (Mumbai) 442. The First Appellate Order is comprehensive and reasoned one we are not inclined to interfere therewith. The same is upheld. 10. In the preceding paragraphs, we have discussed that the assessee has been able to satisfactorily meet out the objections raised by the Assessing Officer to justify the claimed deduction, on the basis of which the Learned CIT(Appeals) has accepted the claimed deduction under sec. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
