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2018 (2) TMI 1724 - AT - Income TaxDeduction u/s 80IA disallowed - profit derived from power generation unit - Held that - We respectfully follow the decision of Hon ble Jurisdictional High Court rendered in assessee s own case for A.Y. 2007-08 2013 (5) TMI 357 - CALCUTTA HIGH COURT on a similar issue held the figures picked up by the AO from the orders of UPPCL does not represent the open market value of electricity. The market value for the purpose of subsection 8 of section 80IA of the Act is a price arrived at between buyer and seller in the open market where transaction takes place in normal course of business in contrast to a situation where price is fixed between a buyer and a seller negotiation done under legislative mandate. We uphold the impugned order of the Ld. CIT(A) deleting the addition made by the A.O. on account of disallowance of deduction under section 80IA. The appeal of the revenue is accordingly dismissed.
Issues Involved:
Appeal by revenue against CIT(A) order regarding deletion of deduction under section 80IA. Analysis: 1. The appeal by the revenue was against the deletion of deduction under section 80IA by the Ld. CIT(A). The revenue challenged the addition of ?2,13,47,159 made by the Assessing Officer (A.O.) due to disallowance of the deduction claimed by the assessee company. 2. The assessee, engaged in manufacturing chemicals and power, filed its income return claiming a deduction of ?24,12,85,863 under section 80IA for profit from its power generation unit. The A.O. allowed this deduction in the original assessment but later reopened it, alleging inflated income by ?2,13,47,159. The A.O. disallowed the deduction under section 80IA in the reassessment, resulting in an increased total income of ?6,31,22,705. 3. The Ld. CIT(A) upheld the validity of the assessment under section 147/143(3) and decided against the assessee on this issue. However, on the disallowance of deduction under section 80IA, the Ld. CIT(A) referred to a previous ITAT decision in favor of the assessee for A.Y. 2007-08 and deleted the addition of ?2,13,47,159. The revenue appealed to the Tribunal, while the assessee filed a cross-objection challenging the assessment validity. 4. The Tribunal noted that a similar issue was decided in favor of the assessee by ITAT for A.Y. 2007-08, which was upheld by the Kolkata High Court. The Tribunal, following the High Court decision, dismissed the revenue's appeal and upheld the Ld. CIT(A)'s order deleting the disallowed deduction. 5. The cross-objection by the assessee challenging the assessment validity was deemed irrelevant after upholding the Ld. CIT(A)'s decision on the deduction issue. The Tribunal dismissed both the revenue's appeal and the assessee's cross-objection. This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the case and its resolution.
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