TMI Blog2009 (11) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal no.2 relates to disallowance of deduction u/s 80HHC, computed by the AO on the ground that the amount of the deduction u/s 80IA is to be reduced from the amount of deduction u/s 80HHC and therefore, no amount is allowable as deduction u/s 80HHC as a deduction u/s 80IA was more than the deduction u/s 80HHC. 4. During the course of hearing both the parties agreed that now this issue is duly covered by the decision of Special Bench of the Delhi Bench of the Tribunal in the case of ACIT V/s Hindustan Mint and Agro Product (P) ltd reported in 119 ITD 118 (SB) and therefore submitted that this issue be sent back to the file of the AO with a direction that the AO shall re- decide this in accordance with the decision of the Special Bench in the case of ACIT V/s Hindustan Mint and Agro Product (P) ltd. 5. W e have heard rival submissions and carefully perused the material available before us and considered the same. We have also gone through the decision of the Special Bench relied upon by both the parties. W e noted that, in this decision the issue involved was, whether the restriction contained u/s 80IA (9) or 80IB(9A) are not to allow repeated deduction if it is applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able , then those provisions are to be interpreted liberally. Reliance was placed on decision of Supreme Court in the case of P R Prabhakar (supra). 35. We have already dealt with above contention. In our considered opinion, all statutory provisions are inter-related and are part o one scheme. This cannot be read de hors one and other. Restriction imposed in section 80IA(9)/80IB(9A) are to be read in all sections and given effect to. This would only give harmonious reading. The decision of Supreme Court relied upon by Shri Vohra also support above provisions although they do not deal with section 80IA/80IB of the Act. We are unable to find any substance in above argument of the learned counsel 36. Shri Vohra, on the applicability of the decision of Hon Madras High Court in the case of SCM Creations (supra), submitted decision of Hon Madras High Court in the case of SCM Creations (supra), submitted that ;principle of sub-silencio rule could not be applied to the decision. The aforesaid decision of High Court being decision of a superior court that to be given preference over the decision of Rogini Garments's case (supra) (SB). In support of this contention, it was submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO shall re-decide the issue of computation of deduction u/s 80HHC available to the assessee in accordance with the decisions of Special Bench in the case of ACIT V/s Hindustan Mint and Agro Product (P) ltd. (Delhi) (SB). The ground of assessee on this issue is allowed for statistical purpose.. 7. Grounds of appeal no.3 relates to the sustaining the action of the AO by the CIT(A) by which the AO held that market value of electricity generated by the eligible unit of the assessee are supplied to the glass manufacturing unit be taken at the rate of ₹ 4.28 per unit and not at the rate of ₹ 4.9 as has been taken by the assessee. 8. The learned AR before us contended that the assessee has two alternative sources of power at its location i.e GEB and Captive. The assessee valued the power of Captive plant at the landed cost of procuring power from GEB i.e. ₹ 4.90/ unit. The AO made artificial adjustment in this rate and allowed deduction u/s 80IA by valuing the market rate at 4.28 per unit. Excluding the excise duty charged by GEB, which is the dispute in only on valuing the market rate of power produced by captive plant u/s 89IA(8). 9. The learned AR contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng held that the assessee is entitled for the deduction available under section 80IA, the next question is what should be the price attributable to the power generated and consumed by the assessee. The answer to the question is readily available in sub-section (8) of s.80IA which reads as below: 80IA(8) Where any goods [or services] held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any goods [or services] held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such goods [or services] as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods [or services] as on that date The above concept of transfer pricing is also apparent in R.7 of IT Rules, 1962 provided for determining the income from agricultural produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 115JB even if no deduction is actually allowed as per grounds of appeal as per ground no.2 of appeal. 15. At the time of hearing the learned AR before us vehemently submitted that this issue is covered by the decision of Special Bench of Mumbai Tribunal in the case of DCIT V/s Syncome Formulations (I) Ltd reported in 106 ITD 193 (Mum)(SB) in which it is held that deduction u/s 80HHC in the case of main assessment is to be worked out on the basis of adjusted book profit u/s 115JA and on the basis of profit computed under the regular provisions of law applicable to the other provisions. Therefore, he prayed that the AO be directed to allow the deduction u/s 80HHC while computing the Minimum Alternate Tax u/s 115 JB. 16. The learned DR, narrated the facts of the case and relied on the orders of the authorities below. 17. W e have carefully considered the submissions made by the parties, perused the material available before us. W e find that the issue involved in this ground does not relates to the contention as has been advanced by the learned AR that the deduction u/s 80HHC in the case of MAT assessment to be worked out on the basis of adjusted book profit u/s 115JA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt inference (Para 18) 23. Respectfully following the decision of the Madras High Court in the case relied upon by the learned AR, we direct the AO to reduce the credit available u/s 115JAA first and then l compute the interest u/s 234B. Thus, this ground is allowed. 24. Grounds of appeal no.6 pertains to the upholding disallowance of ₹ 11796/- out of traveling expenses, postage and telephone expenses and miscellaneous expenses. 25. During the course of assessment proceedings the AO observed that the assessee incurred following expenses: i. Travelling expenses -Rs.24,06,108/- ii. Postage, telephone and telegraph -Rs.21,66,234/- iii) Miscellaneous expense -Rs.10,17,466/- 26. On verification of the details the AO observed that there is no check over the expenses as some of the expenses were paid in cash and also by preparing vouchers. Accordingly, he disallowed 20% thereof i.e. ₹ 1,11,796/-. 27. The first appellate authority also confirmed the action of the AO. 28. Aggrieved by the action of the learned CIT(A), the assessee is in appeal before us. 29. After hearing both the parties and on perusal of the record, we find that the AO on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A). 36. W e have heard both he parties, perused the materials available on record, and also gone through the orders of the authorities below. On perusal of the record we find that the findings of the CIT(A) in respect of provisions for gratuity and leave encashment are concerned they are ascertained liabilities and we agree with it. In respect of the deferred tax, the provisions made therefore cannot be regarded to be the labour, which can be added to the book profit of the assessee by virtue of amendment under clause H to the Explanation to Section 115JB. W e accordingly, confirm the order of the CIT(A) on the issue of gratuity and leave encashment but set aside the findings of the CIT(A) on the issue of deferred tax liability and direct the AO to re-compute the MAT under section 115JB after addition the provisions of the deferred tax. This ground is partly allowed. 37. In the result, the appeal filed by the revenue is partly allowed. ITA No.2182/ Ahd/2007 (by assessee) 38. The first grounds of appeal being general in nature is dismissed. 39. The second grounds of appeal relates to the denial of the deduction u/s 80HHC on the ground that deduction u/s 80IA i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue will be application to this issue also. 48. Since we have decided the similar issue in paragraph 12 of this order by observing as under : 12. In this case also, we noted that the cost of electricity per unit purchased by the assessee from GEB is ₹ 4.9 per unit. Therefore, in view of the decision of Mumbai Bench of the Tribunal in the case of West Coast Paper Mills Ltd V/s JCIT (supra), we are of the view that the cost of electricity produced by the assessee at Captive Unit may be taken at market value at ₹ 4.9 per unit for the purpose of computation of the eligible profit of that unit. No contrary decision was brought to our notice by the learned DR. We, therefore, set aside the order of the CIT(A) and direct the AO to compute deduction u/s 80IA by taking market value of the electricity generated by the assessee at the rate of ₹ 4.9 per unit. Ground no.3 is allowed. 49. Following the view so taken, here also we take the same view as the view taken above and allow this ground of appeal no.4. 50. Grounds of appeal no.5 pertain to the upholding of disallowance of ₹ 179522/- out of traveling expenses, postage and telephone expenses and miscella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein and in hand are identical, therefore, we do not take any different stand than the stand so taken therein. Therefore, following the same precedent we restore this issue to the file of the AO for denovo adjudication on the issue. Accordingly, the appeal of the revenue is allowed for statistical purposes. ITA No.1145/ Ahd/2008 (by assessee) 57. The grounds of appeal no.1 taken by the assessee pertains to confirming the action of the AO in allowing lower deduction under section 80IA to the extent of ₹ 4014812/- by holding that market value of electricity generated by the eligible unit of the assessee and supplied to the glass manufacturing unit of the assessee was ₹ 4.51 per unit compared to assessee's claim that market value there was ₹ 5 per units 58. W e find that this issue is similar to that of ground no.3 for the assessment year 2003-04. Therein, we have decided the issue after detailed discussion and directed the AO to allow the assessee to take market rate at the relevant point of time. Following the same precedent, here also we direct the AO to take cost of electricity generated by the assessee at market rate and compute the eligible profit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
