TMI Blog2022 (10) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... And Shri Aman Garg, C.A. For the Revenue : Ms. Sarita Kumar, CIT-DR ORDER PER ANIL CHATURVEDI, A.M. : This appeal filed by the Assessee is directed against the Order of the Ld. CIT(A), Faridabad, dated 13.02.2018 in Appeal No.10011/2017-18 relating to the A.Y. 2015-16. 2. Briefly stated facts of the case are that the assessee company is a Government of India Enterprise and stated to be engaged in the business of generation of electricity, construction contracts and consultancy services. The assessee company filed it s original return of income electronically for the A.Y. 2015-16 on 09.11.2015 declaring total taxable income of Rs.1561,96,72,780/- and income under section 115JB of the I.T. Act, 1961 at Rs.2783,79,09,446/-. Thereafter, the assessee company revised its return of income on 23.11.2016 declaring total income at Rs.1554,49,38,130/- and income under section 115JB of the I.T. Act, 1961 at Rs.2744,13,64,687/-. The case of the assessee company was selected for scrutiny and thereafter, assessment was framed under section 143(3) of the I.T. Act, 1961 vide order dated 28.03.2017 and the total taxable income was determined by the A.O. at Rs.2840,74,56,640/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55,38,618 Dhauliganga 70,72,170 Total 2,41,37,671 5.1. The A.O. was of the view that Section 80IA mandates for deduction only from the profit earned from that business and not from other income. The assessee company was, therefore, asked to explain as to how the income shown under the head Other Income of those projects is eligible for deduction under section 80IA of the I.T. Act, 1961. In response to the query of the A.O, the assessee company made it s submissions which were not found acceptable to A.O. The A.O. thereafter, for the reasons given in the assessment order held that Rs.2,41,37,671/-, being income from other sources, to be not eligible for deduction under section 80IA of the I.T. Act, 1961. He, accordingly, denied the claim of benefit of deduction under section 80IA of the Act on such income. 5.2. Aggrieved by the order of the A.O, assessee company carried the matter in appeal before the Ld. CIT(A) who while deciding the issue against the assessee at para- 11 of the order noted that on identical facts in assessee s own case while deciding the appeal for the A.Ys. 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .07.2019 wherein the appeal of the assessee has been allowed. For the sake of ready reference, the relevant part of the said order involving the same issue is reproduced below: 9. AO disallowed an amount of Rs.2,99,54,875/- by not considering the same for the purpose of computation of deduction u/s 80IA of the Act on the ground that only profit obtained from generation and distribution of power and not from other income is eligible for deduction u/s 80IA. 10. Ld. CIT (A) by following his own order rendered in AY 2010-11 upheld the order passed the AO that income derived from sources other than generation and distribution of power is not eligible for deduction u/s 80IA and dismissed the ground raised by the assessee. 11. However, the ld. AR for the assessee contended that the said order passed by the ld. CIT (A) for AY 2010-11 has been set aside by the coordinate Bench of the Tribunal vide order dated 08.05.2019 in ITA No.3650/Del/2015 3738/Del2015 for AY 2010-11 and now the issue in controversy is fully covered. 12. On the other hand, ld. DR for the Revenue in order to repel the arguments addressed by the ld. AR for the assessee contended that income directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,972,629 9 Telephone recovery - - 41,803 5,157 46,960 10 Cable charges 88,500 127,840 87,800 113,700 417,840 11 Guest house recovery 22,912 126,019 335,464 104,848 589,243 Total 16,388,093 3,447,950 6,557,760 3,561,072 29,954,875 14. The ld. AR for the assessee relied upon the decision rendered by Hon ble Delhi High Court in the case of Pr. CIT vs. Bharat Sanchar Nigam Ltd. 388 ITR 371 wherein meaning of word derived from while computing deduction u/s 80IA of the Act has been explained. 15. Coordinate Bench of the Tribunal in assessee s own case for AY 2010-11 (supra) decided the identical issue in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The AO held that the six items of income could not be said to be derived from the business of the Assessee and added the income therefrom to the returned income of the Assessee. In the appeal by the Assessee, the Commissioner of Income Tax (Appeals) [ CIT (A) ] agreed with the AO that three of the above items, viz. Extraordinary Items, Refund from Universal Service Fund and Interest from Others, did not form part of the profit derived from eligible business. However, the Assessee s plea regarding the other three items as being derived from the business was accepted by the CIT(A). 10. The Assessee filed appeals and the Revenue filed cross-appeals before the ITAT. The ITAT in the impugned orders concluded that with sub-section (2A) beginning with a non-obstante clause, the legislative intention of making available to an undertaking, providing telecommunication services, the benefit of deduction of 100% of the profits and gains of the eligible business was explicit. Indeed, the legislature appears to have made a conscious departure in adopting for sub-section (2A) a wording different from that appearing in sub section (1). Under Section 801A (1), what is available for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits derived from an industrial undertaking. The Tribunal has failed to appreciate that it is not the case of the AO that the interest income is not assessable under the head 'Profits and gains of business . It is only while computing relief under s. 80-I of the Act that the Revenue changes its stand. When one reads the opening portion of s. 80-I of the Act it is clear that words used are: gross total income of an assessee includes any profits and gains derived from an industrial undertaking . Once this is the position then, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the prescribed percentage is to be allowed. That, in fact, the gross total income of the assessee included profits and gains from such business, and this is apparent on a plain glance at the computation in the assessment order. Both in relation to Vatva Unit and Mandali Unit the computation commences by taking profit as per statement of income filed along with return of income. Therefore, the same item of receipt cannot be treated differently: once while computing the gross total income, and secondly at the time of computing deduction under s. 80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipts by the assessee can be treated as receipts which flow to him de hors the business which is carried on by him. In our view, the interest payable to him certainly partakes of the same character as the receipts for the payment of which he was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties. It cannot be separated from the other amounts granted to the assessee under the awards and treated as 'Income from other sources . 50. In view of the above quoted decisions, we are of the considered view that the disallowance made of Rs.4,46,54,883/- while computing the deduction allowable u/s 80-IA of the Act is not justified. Hence, we set aside the orders of the lower authorities and direct the Assessing Officer to recompute the deduction allowable to the assessee u/s 80-IA of the Act without excluding Rs.4,46,54,883/-. Thus, this ground of appeal of the assessee is allowed. 16. Following the decision rendered by the coordinate Bench of the Tribunal on the issue in controversy discussed above, the arguments addressed by the ld. DR and the case laws relied upon are not applicable to the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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