2015 (12) TMI 1872 - AT - Income Tax

Eligibility of Deduction u/s 80IB - HELD THAT - We find that since the facts are identical and in assessee s own case the Tribunal has decided the issue, judicial discipline mandates that we follow the order of the Tribunal. We further note that the Revenue has already filed appeal before the Hon ble High Court in Income Tax Appeal - In this view of the matter since the Hon ble jurisdictional High Court 2010 (4) TMI 1232 - BOMBAY HIGH COURT has not reversed the decision of ITAT, we follow the above said order of ITAT in assessee s own case - Hence we set aside the order of learned CIT(Appeals) and hold that the assessee is eligible for deduction u/s 80IB. Addition of electricity expenditure - AO while making the disallowance relied on the statement of Smt. Anju Saraf recorded on 07-12-2009 before the ACIT, Circle-1, Nagpur wherein it has been stated that crushing and screening machines are run on generator and there is no electricity connection is available for running crushing and screening machines - HELD THAT - It is clear that the assessee has paid the expenditure on account of electricity to its associate concern. The expenditure is duly supported by bills and vouchers. Such expenditure were claimed in earlier years and were allowed. Merely because the expenditure was paid to sister concern, the same cannot be disallowed. Accordingly we uphold the order of learned CIT(Appeals) on this issue. Addition on account of wind mill maintenance expenses - CIT-A deleted the addition - HELD THAT - We find that the AO s main plank of argument is that the expenditure incurred was excessive. For this he has compared some agreements entered into with other concerns with the payee. We agree with the learned CIT(Appeals) that no case has been made out as to whether the maintenance charges paid by others were comparable to the one paid by the assessee. Hence in our considered opinion the AO is trying to enter into shoes of the businessman to decide as to how he should enter into an agreement. No case has been made out that the payments are bogus or the services were not rendered. In these circumstances, we do not find any infirmity in the order of learned CIT(Appeals). Accordingly we uphold the same. The appeal of the Revenue is dismissed.

Summary

Issues involved:
1. Eligibility for deduction u/s 80IB of the I.T. Act.
2. Disallowance of electricity expenditure.
3. Deletion of addition on account of wind mill maintenance expenses.

Eligibility for deduction u/s 80IB:
The issue revolved around the eligibility of the assessee for deduction u/s 80IB of the I.T. Act. The Tribunal noted that in a previous assessment year, a similar issue was decided in favor of the assessee by the Tribunal. Despite the Department's appeal to the High Court, the decision remained in favor of the assessee. The Tribunal emphasized judicial discipline and decided to follow its previous order, granting the deduction u/s 80IB to the assessee for the current assessment year.

Disallowance of electricity expenditure:
The Revenue challenged the deletion of addition on account of electricity expenditure. The AO disallowed the expenditure based on a statement and lack of separate electricity connection for the assessee. However, the CIT(A) found the expenditure legitimate, supported by bills and vouchers, and entered into with an associate concern for continuous power supply. The Tribunal upheld the CIT(A)'s decision, emphasizing that payment to an associate concern does not warrant disallowance if supported by proper documentation and commercial expediency.

Deletion of addition on account of wind mill maintenance expenses:
Regarding the wind mill maintenance expenses, the AO disallowed a portion of the claimed expenditure as excessive and unreasonable, comparing it with agreements of other companies. The CIT(A) found no grounds for disallowance, noting the absence of specific provisions cited by the AO and lack of evidence of non-genuine payments. The Tribunal agreed with the CIT(A), emphasizing that the AO's comparison lacked merit and did not establish any wrongdoing. Consequently, the Tribunal upheld the CIT(A)'s decision to delete the addition on account of wind mill maintenance expenses.

In conclusion, the Tribunal allowed the assessee's appeal on the eligibility for deduction u/s 80IB, upheld the deletion of addition on account of electricity expenditure, and dismissed the appeal by the Revenue regarding the wind mill maintenance expenses. The Tribunal's detailed analysis and adherence to legal principles ensured a fair and just decision in each issue presented before it.