TMI Blog2018 (2) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... urt] wherein the court in the context of availability of deduction under section 80I, held that deduction under section 80I was available irrespective of the fact whether products were sold in open market or used for consumption by other units. The Tribunal in the impugned order has followed its earlier decision in the case of Banco Aluminium Ltd. in assessment year 2009-10 and has allowed the ground of appeal. It may be germane to refer to the decision of this court in the case of A.C.I.T., Bharuch Circle, Bharuch v. Pragati Glass Works Pvt. Ltd. (2012 (1) TMI 309 - GUJARAT HIGH COURT) wherein the court was dealing with the issue as to whether the Tribunal was right in law in directing to compute deduction under section 80IA by taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant (750 KV) at ₹ 37,60,542/- and in respect of Captive Power Generation Plant (250 KV) at ₹ 19,473/-. During the course of assessment proceedings, the assessee was asked to substantiate its claim for deduction under section 80IA (4) of the Act in respect of captive power plants. The assessee was asked to furnish the reasons with working of price of the units to determine the claim of deduction and to show cause as to why the saleable market price should not be taken into consideration in determining the notional sale value. The assessee was also asked to substantiate the genuineness of unthinkable low administrative and other expenses claimed to achieve profit for tax deduction. 4. After considering the explanation of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the denial of deduction under section 80IA(4) of the Act due to captive power plants of the assessee not being separate undertakings, profits from them being notional and not included in the gross total income, was not tenable in view of the decision of this High Court in Ahmedabad Manufacturing and Calico Printing Co. Ltd . and held that the assessee was entitled to deduction under section 80IA(4) of the Act in respect of electricity generated by it for captive consumption, subject to fulfillment of other conditions. 6. Insofar as Ground No.2.2 is concerned, the Commissioner (Appeals) held that losses if any of eligible undertaking for years prior to the initial assessment year are not to be set off against current year s pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er units. The Commissioner (Appeals) observed that it was clear from provisions of section 80IA(8) of the Act that deduction under section 80IA is envisaged in respect of profits derived from inter unit transfer of goods/services as well. He, accordingly, held that deduction under section 80IA was available to the assessee in respect of electricity generated by it for captive consumption, subject to fulfillment of other conditions under section 80IA of the Act. This finding of the Commissioner (Appeals) has not been challenged by the revenue before the Tribunal. 9. Insofar as the issue regarding recomputing the profits of the undertaking by adjusting the sale value of the power produced and supplied by the undertaking, the Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has committed no error. Assessing Officer and CIT (Appeals) while adopting ₹ 4.51 per unit as the value of electricity generated by eligible unit of assessee and supplied through its non eligible unit only worked out cost of such electricity generation. In fact CIT (Appeals) in terms recorded that ₹ 4.51 was computed as the reasonable value of the electricity generated by eligible unit of assessee. This amount included ₹ 4.17 per unit which was the cost of electricity generation and ₹ 0.34 per unit which was duty paid by the assessee to GEB for such power generation. Thus the sum of ₹ 4.51 per unit only represented the cost of electricity generation to the assessee. In Section 80IA(8) of the Act what is requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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