2017 (8) TMI 856 - HC - Income Tax

Admitted on the following substantial questions of law. 1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that, indirect expenses which were not directly relatable to the power units had to be reduced in arriving at the profits of the power units for the purpose of computing deducting under section 80IA of the Act? 2) Whether on the facts and in the circumstances of the case and in law, the Tribunal ought to have adjudicated the Appellant s claim for deduction under Section 80JJA of the Act? 3) Whether on the facts and in the circumstances of the case and in law, the Tribunal ought to have adjudicated the Appellant s claim for deduction under Section 80IA in respect of the integrated power unit No.6 of the Act? 4) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that, Profit on sale of Investments as well as Profit on sale of fixed assets should not be excluded in the computation of book profits under MAT provisions?

Summary

Issues:
1. Indirect expenses deduction under section 80IA of the Act
2. Adjudication of claim for deduction under Section 80JJA of the Act
3. Adjudication of claim for deduction under Section 80IA for integrated power unit No.6
4. Exclusion of profit on sale of investments and fixed assets in book profits under MAT provisions

Analysis:

Issue 1: Indirect expenses deduction under section 80IA of the Act
The High Court admitted the appeal based on substantial questions of law, including whether indirect expenses not directly related to power units should be reduced for computing profits under section 80IA of the Act. The Tribunal's decision on this matter was questioned, and the court deemed it necessary to adjudicate this issue.

Issue 2: Adjudication of claim for deduction under Section 80JJA of the Act
Another substantial question of law raised was whether the Tribunal should have adjudicated the appellant's claim for deduction under Section 80JJA of the Act. The court highlighted the importance of addressing this claim and included it as a basis for admitting the appeal.

Issue 3: Adjudication of claim for deduction under Section 80IA for integrated power unit No.6
The court also considered whether the Tribunal should have adjudicated the appellant's claim for deduction under Section 80IA concerning integrated power unit No.6. This issue was included as a substantial question of law for further examination and resolution.

Issue 4: Exclusion of profit on sale of investments and fixed assets in book profits under MAT provisions
The final substantial question of law involved the Tribunal's decision on excluding profit from the sale of investments and fixed assets when computing book profits under MAT provisions. The court questioned the correctness of this decision and included it in the list of substantial questions to be addressed during the appeal process.

The High Court directed the Registrar to ensure the original record is summoned from the Tribunal for inspection, indicating the seriousness with which the appeal was being handled. The court also noted the waiver of service by Mr. Suresh Kumar and scheduled the appeal to be heard along with other connected appeals. The detailed analysis of each issue highlighted the complexity and significance of the legal questions raised in the judgment, emphasizing the need for a thorough examination and resolution by the court.