TMI Blog2016 (5) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... ame formula. Once on a particular formula, a deduction has been allowed then same should have been uniformly followed for the last year also. Accordingly, we direct the AO to examine the working of the assessee corporation and work out the allowable deduction under section 80IA to the assessee - ITA Nos. 4286/Mum/2005 - - - Dated:- 6-5-2016 - Amit Shukla (Judicial Member) And Rajesh Kumar (Accountant Member) For the Appellant : J. D. Mistry For the Respondent : Rajesh Kumar ORDER Amit Shukla (Judicial Member) The aforesaid appeal has been filed by the assessee against impugned order dated 17.03.2005 passed by CIT(A)-2, Mumbai for the quantum of assessment passed under section 143(3) for the assessment year 2001-02. In the grounds of appeal, following grounds have been raised:- 1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) (CIT(A)), erred in rejecting the claim of the Appellant for the deduction under Section 80IB of the Income Tax Act, 1961 ( the Act ) on LPG Plants, on the ground that the activity of filling the gas into the cylinders does not constitute manufacturing and the LPG bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions which have been incorporated by the AO from pages 4 to 7 of the assessment order. The Ld. AO held that activity of filing gas into the cylinders does not constitute manufacturing and that LPG bottling Plants are part of refining activities only. The Ld. CIT(A) too following the earlier decision of the CIT(A) for AYs 1996-97 to AY 2001-02 decided this issue against the assessee. 6. Now, we find that this issue has been decided by the High Court in the case of HPCL BPCL ( supra ) wherein, it has been held that, the assessees are entitled for deduction under section 80IA in respect of filing of LPG bottling Plants. The Hon ble Bombay High Court in the case of CIT vs. HPCL in Income-tax Appeal No. 2131 to 2135 of 2012 vide judgment and order dated 7th March, 2013 have decided this issue in the following manner:- 2) The basic dispute in these appeals is whether the activity of bottling LPG Gas amounts to production or manufacturing activity for the purpose of deduction under Section 80HHC, 80I and 80IA of the Income Tax Act, 1961. The Tribunal by the impugned order held that subject activity amounts to production/manufacturing for the purpose of Section 80HHC, 80I an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May, 2013 wherein, on the following question of law:- i) Whether on the facts and circumstances of the case, the Tribunal erred in law in holding that Appellant was not entitled to deduction under Sections 80HH and 80I/80IA of the Income Tax Act, 1961 in respect of its LPG Bottling Plants? The High Court followed its earlier aforesaid decision in the following manner:- 2. At the hearing of these appeals out attention has been invited by the learned counsel for the parties to the judgment dated 7 March 2013 of a Division Bench to which one of us (M.S. Sanklecha, J.) was a party in Income Tax Appeal Lodging No.2131 of 2012 and connected appeals. The identical question centers around the basic dispute in whether activity of bottling LPG as amounts to production or manufacturing activity of bottling LPG Gas amounts to production or manufacturing activity for the purpose of deduction under section 80HH, 80i and 80IA of the Income Tax act, 1961. This Court gave following finding in the above judgment dated 7 March, 2013:- Since the Tribunal in the impugned order has relied upon the decision of this Court and the consequent order of the Electricity Ombudsman to hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking capital. To ensure uniform selling prices in the market, a uniform amount towards marketing margins (being a weighted average of the industry) is included in the price built up. In addition to the above there is a compensation built in the retention price towards storage and working loss under the head specific costs . The specifics are allowed to the industry uniformly on normative basis and not on retention basis. (b) Products manufactured by the Refinery are sold either directly to the customers (industrial) or to the public in general through Retail Outlets and distributors. In case of retail outlets, the oil marketing companies have to provide various assets like land, buildings, pumps and tanks to dealers appointed by Ministry of Petroleum and Natural Gas (MOP NG) on account of the peculiar nature of products and careful handling required for the products which has to be supervised by the oil companies on continuous basis. The above said facilities and the expenses incurred are built into a compensation given to each oil company based on a periodical audit of their books by Oil Coordination Committee (OCC). These are called retention margins. These margins ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed working of the deduction for the SCN plants. He submitted that, now in the light of this working and formula which has been accepted in the past by the department, the AO may be directed to decide this issue accordingly. 8. Ld. DR on the other hand, strongly relied upon the order of the AO and submitted that, in case the matter is being set aside then it should be decided afresh and in accordance with the law. 9. After considering the relevant finding given in the impugned order and the submissions made by the parties, we find that the year of commission of C3 C4 SCN plant is 1991-92. This is the 10th year claim of deduction. In the earlier year, the revenue has allowed the deduction based on profit formula by taking the cost of the project into the business profit into percentage specified u/s 80IA of the Act upon Opening gross block of the corporation, that is, Cost of the Projects x Business Profit X 30% Opening Gross Block of the Corporation The assessee has also given working of the computation of deduction on the basis of the same formula. Once on a particular formula, a deduction has been allowed then same should have been uniformly followed for the ..... 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