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2019 (4) TMI 1574 - AT - Income TaxRectification u/s 254 - impugned order taking its employees stock option plan ESOP figure at ₹26,17,37,836/- instead of the correct amount of ₹2,61,73,34,836/- - HELD THAT - Revenue is very very fair in not disputing the latter correct figure. We therefore direct necessary modification in our order in assessee s appeal 2018 (11) TMI 1611 - ITAT KOLKATA to this effect. The assessee s ESOP claim shall now be read as of ₹2,61,73,34,836/-. Its first grievance raised in the instant miscellaneous application is treated as accepted. Rectification u/s 254 - disallowing u/s 80IA - Tribunal followed its earlier order - legislature enacted the new Electricity Act, 2003 - The very issue as to whether the tribunal s said earlier order in assessment year 2002-03 would operate or not post facto the above legislative developments was considered by yet another co-ordinate bench s decision - HELD THAT - DR fails to dispute all these developments and also the fact that our impugned order had not taken into consideration this latter case law already complied in paper book we treat our earlier direction as per assessment year 2002-03 order as an apparent error requiring necessary modification u/s 254(2). We therefore make it clear that the AO shall hold frame his consequential computation in tune with the provisions in new Electricity Act, 2013 so far as assessee s sec. 80IA deduction claim in Revenue s appeal is concerned. The assessee succeeds in its instant second substantive ground as well as lead MA.
Issues Involved:
1. Rectification of Employees’ Stock Option Plan (ESOP) figure. 2. Modification of the order concerning Section 80IA deduction claim for captive power undertakings. Issue-wise Detailed Analysis: 1. Rectification of Employees’ Stock Option Plan (ESOP) Figure: The first substantive grievance raised by the assessee in the miscellaneous application sought to correct the ESOP figure in the impugned order. The original order recorded the ESOP figure as ?26,17,37,836/- instead of the correct amount of ?2,61,73,34,836/-. The Revenue did not dispute the latter correct figure. Consequently, the Tribunal directed a necessary modification in its order in the assessee’s appeal ITA No.685/Kol/2014 to reflect the correct ESOP figure of ?2,61,73,34,836/-. This grievance was thus accepted. 2. Modification of the Order Concerning Section 80IA Deduction Claim for Captive Power Undertakings: The assessee’s second substantive ground sought to modify the Tribunal’s order regarding the Revenue’s third substantive ground in cross-appeal ITA No.1267/Kol/2014, which aimed to revive the Assessing Officer’s action disallowing the Section 80IA deduction claim amounting to ?63,02,26,000/- for eligible captive undertakings. The Tribunal had initially followed a co-ordinate bench’s decision in the assessee’s case for the assessment year 2002-03, which upheld the CIT(A)’s findings and left the computation to the Assessing Officer. The Tribunal noted that the issue was no longer res integra, as the same had been decided in favor of the assessee in previous years. The CIT(A) had allowed the deduction for captive power undertakings and steam generation, considering them as power under various judicial precedents. Moreover, the CIT(A) had ruled that losses incurred prior to the initial year should be ignored while computing the deduction under Section 80IA. The Tribunal adopted the detailed reasoning from the earlier decision, which included the determination of the market value based on the State Government electricity power tariff inclusive of additional demand charges. The Tribunal directed the Assessing Officer to compute the profit eligible for deduction under Section 80IA based on the findings from the assessment year 2002-03. However, it was recognized that the legislative landscape had changed with the enactment of the new Electricity Act, 2003, which governed the field in the assessment year 2009-10. The Tribunal referred to a subsequent co-ordinate bench decision in M/s Birla Corporation, which held that the earlier findings did not hold after the new Electricity Act came into force. The Tribunal acknowledged that the market value of electricity could be determined based on the price charged by the State Electricity Board, which could be higher than the tariff rate. The Tribunal thus modified its earlier direction, stating that the Assessing Officer should frame the consequential computation in line with the provisions of the new Electricity Act, 2003, concerning the assessee’s Section 80IA deduction claim. Consequently, the assessee’s second substantive ground was accepted, and the related miscellaneous application was allowed. The latter miscellaneous application raising the same grounds was rendered infructuous. Conclusion: The Tribunal allowed the assessee’s former miscellaneous application concerning the rectification of the ESOP figure and modification of the Section 80IA deduction claim. The latter miscellaneous application was dismissed as infructuous. The order was pronounced in the open court on 23/04/2019.
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