TMI Blog2022 (8) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... Ispat Ltd. ( 2013 (10) TMI 5 - CHHATTISGARH HIGH COURT] , found favor with the claim of the assessee and observed, that the market value of the power supplied by the assessee to its steel division was rightly computed by considering the rate at which power was available in the open market, namely, the price that was charged by the electricity board. We, thus, in terms of our aforesaid observations finding no merit in the declining of the assessee s claim for deduction u/s. 80IA(4)(iv)(a) by the A.O which had rightly been vacated by the CIT(Appeals), uphold the latters order. Thus, the Grounds of appeal Nos. (a) to (c) raised by the Revenue are dismissed in terms of our aforesaid observations. Disallowance of claim u/s.14A r.w. Rule 8D(2)(ii) (iii) - HELD THAT:- As the assessee company during the year under consideration had not earned any exempt income, therefore, on the said count itself no disallowance of any part of the expenditure could have been made u/s.14A of the Act. Thus no infirmity in the deletion of the disallowance under Sec. 14A by the CIT(Appeals), uphold his order. - Decided in favour of assessee. - ITA No. 197/RPR/2017 - - - Dated:- 29-7-2022 - Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income which does not form part of the total income under this Act, as held in the case of Cheminvest Ltd. Vs. ITO (ITAT, SB-Del) 121 ITD 318 and Pradeep Kar Vs. ACIT(Kar) 319 ITR 416? g. Whether on points of law and on facts circumstances of the case, the Ld. CIT(A) was justified in placing reliance on the ration of the decision in the case of Maxopp Investment Ltd. 347 ITR 272 ( Delhi) which is distinguishable on facts and circumstances of the instant case . h. Whether on points of law and on facts and circumstances of the case, the Ld. CIT(A) was justified in not taking in consideration the ratio of the decision of the Calcutta High Court in the case of Dhanuka Sons Vs. CIT (Central-1) (2011), 201 Taxmann ( Calcutta) ( MAG) which is squarely applicable to the facts and circumstances of the instant case? i. The order of the Ld. CIT(A) is erroneous both in law and on facts. k. Any other ground that may be adduced at the time of hearing. 2. Succinctly stated, the assessee company which is engaged in the business of manufacturing and trading of sponge iron, steel ingots and generation of power had e-filed its return of income for the assessment year 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Electricity Board (For short CSEB ). It was observed by the A.O that the assesee company had transferred/sold electricity generated by its power plant as under: S. No. Particulars No. of Units Rate/unit 1. Electricity Board 5770400 3.00 2. Electricity Board 5891300 3.05 3. Steel Division 26951029 4.30 4. Animesh Ispat (P) Ltd. 12639428 4.30 It was observed by the AO that though the assessee company had sold power to CSEB at the rate of Rs. 3.05 per unit, but had sold/transferred the same to its steel division and associate concerns at a higher value, i.e, at the rate of Rs. 4.30 per unit. Observing, that the assesee by selling the power to its steel division and associate concerns at a higher value had inflated the profits of its power division which was eligible for deduction u/s. 80IA of the Act and at the same time redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Bulls Power Generation Limited had offered to supply electricity to CSEB at the rate of Rs. 0.81 per unit. Also, it was observed by him that some other suppliers had supplied electricity to CSEB at the rate Rs. 2.25 per unit, Rs.2.32 per unit for different periods which being liable for correction as per load factor reduced the effective rate by further 10%. On the basis of his aforesaid observations the A.O was of the view that the effective rate paid by CSEB to the private players for purchasing the electricity was Rs.2/- per unit. On the basis of his aforesaid deliberations the A.O triggered the provisions of Section 80IA(8) of the Act and disallowed the assessee s claim for deduction u/s.80IA(4)(iv)(a) of Rs.4,38,73,880/-, as under: Details Units Total power sold to steel division 26951029 Total power sold to Associate concern 12639428 Total units 39590457 Difference in power rate (4.30-3.05) 1.25 Difference on a/c of inflated power sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set, it is informed that the issue is squarely covered by the decision of Bilaspur Bench of the Tribunal in the case of ACIT V/s Godavari Power Ispat Ltd. [2011] 133 ITD 502 (Bilaspur). In the compilation of the assessee at page 12, the respondent-assessee has also placed reliance on the order of Hon ble High Court of Chhattisgarh at Bilaspur in the Tax case No.31, 34,32 of 2012 dated 2nd August, 2013 pronounced in the case of CIT V/s Godavari Power Ispat Ltd., wherein on this very fact that the said assessee was a manufacturer of Iron steel and captive power plant has supplied electricity to its manufacturer unit which was at higher rate than the power supplied to Chhattisgarh State Electricity Board; the Hon ble High Court has held as under : 28. The Chhattisgarh-Company is a company which is generating power. It is neither consumer of the electricity, nor it is supplying power to a consumer. It also cannot sell power to any consumer directly: it has to compulsorily sell it to the Board. 29. The power sold by the Chhattisgarh-Company to the Board is a sale to a company which itself supplies power to the consumers. It is not sale of power to the consumer. 30. The Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictional High Court, we hereby reject this ground of revenue. 11. As the facts and issue involved in the present appeal of the assessee remains the same as were there before the Tribunal in its own case for AY 2008-09, therefore, we are unable to comprehend as to on what basis the A.O had declined to follow the same. At this stage, we may herein observe that it is neither a fact nor the case of the department that the aforesaid order of the Tribunal had either been set-aside or stayed by the Hon ble High Court which would have otherwise justified the declining on its part to follow the same. Apart from that, we find absolutely no justification on the part of the A.O in not following the binding judgment of the Hon ble High Court in the case of CIT Vs. Godawari Power Ispat Ltd. (supra) which seizes the issue under consideration. Admittedly, the Department had assailed the aforesaid judgment of the Hon ble High Court by filing a SLP before the Hon ble Apex Court but again, as long as the said judicial pronouncement is not set-aside or stayed by the Hon ble Apex Court the same holds the ground and have to be ritually followed by the lower authorities. We, thus, in terms of our a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of his aforesaid observations the CIT(Appeals) vacated the disallowance of Rs.5,73,515/- made by the A.O u/s.14A r.w Rule 8D. ITA No. 197/RPR/2017 15. We have given a thoughtful consideration to the aforesaid issue in hand, i.e., sustainability of the disallowance made by the A.O u/s.14A r.w Rule 8D(2)(ii) (iii) of Rs.5,73,515/-. In our considered view, as the assessee company during the year under consideration had not earned any exempt income, therefore, on the said count itself no disallowance of any part of the expenditure could have been made u/s.14A of the Act. Our aforesaid view is fortified by the following judicial precedents: (i) Redington India Limited Vs. Additional Commissioner of Income Tax, (2016) 97 CCH 0219 (Chen HC) (ii) Commissioner of Income Tax Vs. Cortech Energy P. Ltd. (2015) 372 ITR 97 (Guj. HC) (iii) Commissioner of Income Tax-IV Vs. Holcim India (P) Ltd. (2014) 90 CCH 081 (Del. HC) (iv) CIT Vs. Delite Enterprises, ITA No.110/2009 (Bom.)(HC) We, thus, in terms of our aforesaid observations finding no infirmity in the deletion of the disallowance under Sec. 14A by the CIT(Appeals), uphold his order. Thus, the Grounds of appeal Nos.(d) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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