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TMI Blog2015 (1) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld CIT(A) erred in allowing deduction u/s 801A amounting to Rs. 37,24,64,460/- in relation to the assessee's Captive Power Plant, ignoring the fact that there is no profit derived from the Power Plant as the power was not sold but stood consumed in manufacturing units of the assessee company. 2. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in allowing deduction u/s 801A amounting to Rs. 37,24,64,460/- in relation to its Captive Power Plant by accepting the rate claimed by the assessee @ 4.68 per unit i.e. the rate of power sold by the Electricity Board, without considering that the Electricity Board has to incur costs which are absent in the case of assessee's own Captive Power Plant. This gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and held that the adjustment of 40% in the rate of electricity would be adopted to work out the profits which would be realized by the assessee through the operations of captive power plant. 2.1 On appeal the CIT(A) allowed the claim of the assessee regarding eligibility of deduction under section 80IA in respect of Captive Power Plant by following the decision of Settlement Commission for the assessment year 2009-10. CIT(A) has also accepted the claim of the assessee in applying the rate charged by the electricity Board in respect of electricity supplied to the assessee. 2.2 We have heard the ld.AR and the ld. DR and considered the relevant material on record. At the outset we note that an identical issue has been considered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r at Rs. 5.35 per unit as against that the rate of power at 2.11 per unit being considered by A.O. We find that before Hon'ble Madras High Court in the case of Tamilnadu Petro Products (supra) one of the question before Hon'ble High Court was "whether on the facts and in the circumstances of the case, the Tribunal was right in holding that income derived by the assessee from generation of electricity which was captively consumed is not entitled to relief u/s. 80IA of the Act? The Hon'ble High Court relying on the decision of CIT vs. Thiagaraj Mills Ltd. (Tax case No.68 to70 of 2010) has held as under:- "8. The contention that only whatever power generated from, the sale to an outsider or the electricity board, and t he profit or gain deri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80-IA. The dictionary meaning of the expression 'derive' in the New Oxford Dictionary of English states 'obtaining something from a specified source'. In section 80-IA(1) also no restriction has been imposed as regards the deriving of profit or gain in order to state that such profit or gain derived only through an outside source along would make eligible for the benefits provided in the said section." 44. CIT (A) has given a finding that the facts of the case are identical to that in the case of West Coast Paper Mills and Jindal Power & Steel Ltd. (supra). The Revenue has not been in a position to controvert these facts by bringing any material to the contrary on record. In view of the aforesaid facts and respectfully following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We note that the Settlement Commission vide its order dated 2/12/2011 in assessee's own case for the assessment year 2004-05 to 2009-10 has considered and decided this issue in para 6.3 as under :- "6.3 The other major ground taken is that a distinction has to be drawn between electricity, and steam, as forms of power eligible for deduction u/s.801A(4)(iv). Although the note of the Commissioner fairly admits that this issue has gone in favor of the assessee upto the level of the Tribunal, it is in the absence of decisions of the High Courts or the Apex Court in the matter, the issue has not attained finality. We find that in several cases the Tribunal has held that steam is a form of power covered under the aforesaid beneficial provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit. The stand of the Department before us is that whereas the above decisions would squarely apply to the facts of the applicant's case, same has not become final in the absence of pronouncements of the Higher Courts. We are not inclined to disregard the current findings of the Tribunal merely because the matter is still pending in further appeal. We entirely agree with the opinions expressed therein that steam has to be equated with electricity in the concept of power as envisaged by section 80IA(4)(iv) of the Act. Accordingly we find little legal merit in this argument advanced by the Commissioner." 4.1 It is clear that the Settlement Commission has followed the decision of Delhi Bench of this Tribunal in the case of Sial Sbec Energ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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