2018 (3) TMI 1179 - AT - Income Tax

Deduction u/s 80IA(4) in respect of profits on 90MV Captive Power Plant - Hon ble High Court s judgment in assessee s own case 2016 (10) TMI 1111 - GUJARAT HIGH COURT wherein Their Lordships have approved adoption of rate of power generation at ₹ 4.73 per unit i.e. the rate on which GEB supplied power to its consumers and not the rate of ₹ 2.36 per unit i.e. the rate at which the assessee had supplied its power to GEB. In effect thus the legal position seems to be that the rate at which internal consumption of power is to be taken into account is the rate at which GEB sells power to its consumers. Accordingly, we deem it fit and proper to remit the matter to the file of the Assessing Officer for examining the claim in the light of above legal position. In case of working of profits on which deduction under section 80IA(4) is claimed is indeed on this basis, the Assessing Officer will allow the same.

Issues:
1. Disallowance of amortization of lease rent
2. Applicability of section 14A(2) and disallowance under section 14A r.w.s. 8D
3. Disallowance of deduction claimed under section 80IA
4. Disallowance of expenditure for replacement of re-membraning cells
5. Depreciation on chlorine tonners and computers
6. Disallowance of additional depreciation on wind electric generator
7. Captive power generation plant and claim allowance

1. Disallowance of amortization of lease rent:
The appellant raised concerns regarding the order passed by the Commissioner of Income-tax (Appeals) and the confirmation of disallowances. The Tribunal upheld the grievance of the assessee based on a judgment by the jurisdictional High Court, directing the deletion of the disallowance of ?14,51,000.

2. Applicability of section 14A(2) and disallowance under section 14A r.w.s. 8D:
The grievance of the assessee was regarding the applicability of section 14A(2) and the disallowance made by the Assessing Officer. The Tribunal found in favor of the assessee, citing a co-ordinate bench decision for the assessment year 2009-10. The disallowance was restricted to ?1,00,000 in alignment with the previous year's decision.

3. Disallowance of deduction claimed under section 80IA:
The appellant contested the disallowance of deduction claimed under section 80IA. The Assessing Officer had declined the claim based on the rate of power generation and sale value. The Tribunal remitted the matter to the Assessing Officer for re-examination in light of a High Court judgment, allowing the deduction if the profits were computed based on the approved rate of power generation.

4. Disallowance of expenditure for replacement of re-membraning cells:
The Assessing Officer's addition on account of disallowance of expenditure for replacement of re-membraning cells was challenged. The Tribunal upheld the decision of the Commissioner, citing a judgment in the assessee's own case by the jurisdictional High Court.

5. Depreciation on chlorine tonners and computers:
The Assessing Officer's disallowance of depreciation on chlorine tonners and computers was contested. The Tribunal dismissed the grounds raised by the Assessing Officer, following a judgment by the jurisdictional High Court in the assessee's favor.

6. Disallowance of additional depreciation on wind electric generator:
The Assessing Officer's disallowance of additional depreciation on wind electric generator was disputed. The Tribunal rejected the grievance of the Assessing Officer, aligning with a co-ordinate bench's decision in the assessee's case for the assessment year 2008-09.

7. Captive power generation plant and claim allowance:
The issue of captive power generation plant and the claim allowance was raised by the Assessing Officer. The Tribunal upheld the decision of the Commissioner, relying on a High Court judgment in the assessee's favor, thus dismissing the grounds raised by the Assessing Officer.

In conclusion, the Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal based on the detailed analysis and judgments cited for each issue raised in the case.

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