2010 (7) TMI 1173 - AT - Income Tax

Issues Involved:

1. Disallowance u/s 145A of the I.T. Act.
2. Disallowance u/s 14A of the I.T. Act.
3. Disallowance u/s 80IA of the I.T. Act on account of electricity tax.
4. Disallowance u/s 80IA of the I.T. Act on account of allocation of indirect expenses.
5. Disallowance u/s 80IA of the I.T. Act on receipts from sale of sludge and steam.
6. Levy of interest u/s 234A, 234B, 234C, and 234D of the I.T. Act.
7. Disallowance u/s 40A(9) of the I.T. Act on subsidy paid for employees' canteen.

Summary:

1. Disallowance u/s 145A of the I.T. Act:
The assessee's ground of appeal regarding the disallowance of Rs. 2,62,40,633/- u/s 145A was dismissed as infructuous since the AO had already provided relief in the order passed u/s 154.

2. Disallowance u/s 14A of the I.T. Act:
The assessee did not press the ground related to the disallowance of Rs. 5,00,000/- u/s 14A, and it was dismissed as not pressed.

3. Disallowance u/s 80IA of the I.T. Act on account of electricity tax:
The AO excluded 5% of electricity charges amounting to Rs. 4,03,06,140/- from the exemption claimed u/s 80IA. The CIT(A) confirmed this action. However, the Tribunal, following its own decisions for the previous assessment years, allowed the assessee's claim, stating that the electricity tax should be included in the market price for the purpose of deduction u/s 80IA.

4. Disallowance u/s 80IA of the I.T. Act on account of allocation of indirect expenses:
The AO allocated 25% of certain indirect expenses to the eligible business and disallowed Rs. 68,09,675/- from the exempt amount. The CIT(A) upheld this action. The Tribunal, following its own decisions for the previous assessment years, allowed the assessee's claim, stating that only income derived from the industrial undertaking should be considered for deduction u/s 80IA.

5. Disallowance u/s 80IA of the I.T. Act on receipts from sale of sludge and steam:
The AO disallowed Rs. 53,31,084/- from the exemption claimed u/s 80IA on account of sale of sludge and steam. The CIT(A) confirmed this action. The Tribunal, following its own decisions for the previous assessment years, held that deduction u/s 80IA is not allowable on the sale of sludge but is allowable on the sale of steam, and thus partly allowed the assessee's claim.

6. Levy of interest u/s 234A, 234B, 234C, and 234D of the I.T. Act:
The Tribunal held that charging of interest under sections 234A, 234B, 234C, and 234D is mandatory and consequential in nature, and thus dismissed the assessee's ground.

7. Disallowance u/s 40A(9) of the I.T. Act on subsidy paid for employees' canteen:
The AO disallowed Rs. 22,80,000/- u/s 40A(9) being subsidy paid for employees' canteen. The CIT(A) allowed the claim of the assessee, following the orders of the Tribunal in the assessee's own case for previous assessment years. The Tribunal, following its own decisions for the previous assessment years, dismissed the Revenue's appeal on this issue.

Conclusion:
The appeal filed by the assessee was partly allowed, and the appeal filed by the Revenue was dismissed.

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