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2019 (4) TMI 1532 - HC - Income TaxDeduction u/s 80IA - eligibility for Renupower Unit Nos. 6 and 7 and Co-Generation Plant - arrying on the eligible business - HELD THAT - substantial questions admitted in appeal question i to ix relating to deduction of eligibility for Renupower Unit and Co-Generation Plant Disallowance made by the A.O. u/s 36(i)(iii) as confirmed by the CIT(A) under the provisions of Sec. 14A - HELD THAT - Issue is covered against the Revenue by virtue of judgment of this Court in case of CIT Vs. HDFC Bank Ltd. 2014 (8) TMI 119 - BOMBAY HIGH COURT . We are informed that the appeal against such judgment of the High Court has also been dismissed by the Supreme Court. This question is, therefore, not considered. Disallowance of sum paid to IFFCO as per arbitration proceedings - HELD THAT - Tribunal has correctly relied upon and referred to the decision of the Gujarat High Court in case of Navjivan Roller Flour Pulse Mills Ltd Vs. Dy. CIT 2009 (3) TMI 132 - GUJARAT HIGH COURT in which it was held that the liability of the assessee to pay damages would arise on the date of the award of such damages even if the award was challenged by the assessee in appeal. This question is, therefore, not considered. TP Adjustment of purchase price of copper concentrate - adjustment was made based on internal comparables and for the same month of transactions - HELD THAT - We notice that the Tribunal has examined the facts on record and come to the conclusion that the assessee had entered into a long term agreement with the associated enterprise for procuring copper concentrates. The Tribunal examined the material on record at length to come to the conclusion that in the process, there was no excess payment and therefore, there was no need for transfer pricing adjustment. The entire issue being factual in nature, no interference is called for. Reducing the rate of guarantee commission from 1.75% to 0.50% - HELD THAT - the issue is covered by the judgment of this Court in the case of CIT, Mumbai Vs. M/s. Everest Kento Cylinders Ltd. 2015 (5) TMI 395 - BOMBAY HIGH COURT . It was held that there is different between corporate guarantee and bank guarantee. Additional depreciation u/s 32(iia) in respect of Co-Generation in Plant-2 - Tribunal allowed claim - HELD THAT - The Revenue fairly states that the same does not arise out of the impugned judgment of the Tribunal. Deduction u/S. 80IA applying the UPSEB/s market rate - HELD THAT - This Court in recent judgment in case of CIT-LTU Vs. Reliance Industries Ltd. 2019 (2) TMI 178 - BOMBAY HIGH COURT had considered such a question and dismissed the same by referring and relying upon the decision of Gujarat High Court in case of Pr. CIT Vs. Gujarat Glass Works (P) Ltd 2016 (10) TMI 1111 - GUJARAT HIGH COURT . This question is, therefore, not considered. Exemption of interest received from DHIL u/s 10(23G) on a gross basis even though the assessee company has claimed the intereset paid to DHIL as an expenditure - HELD THAT - The similar issue has been decided against the Revenue by this Court in case of this very assessee by judgment 2012 (9) TMI 159 - BOMBAY HIGH COURT . This question is also not considered.
Issues involved:
1. Eligibility of various units for deduction under Section 80IA of the Income Tax Act 2. Disallowance of expenses under Section 36(i)(iii) and Section 14A 3. Disallowance of payment made to IFFCO 4. Adjustment of purchase price of copper concentrate 5. Rate of guarantee commission 6. Additional depreciation under Section 32(iia) 7. Allowance of deduction under Section 80IA using market rate 8. Exemption of interest received from DHIL under Section 10(23G) Analysis: 1. The High Court considered multiple substantial questions of law regarding the eligibility of different units for deduction under Section 80IA of the Income Tax Act. The Tribunal's decisions on the eligibility of Renupower Unit Nos. 6, 7, 8, 9, and 10, Co-Generation Plants, and Birla Copper Power Plant Units were thoroughly examined. The Court analyzed each unit's compliance with the conditions specified in the Act to determine their eligibility for deductions. 2. The Court addressed the issues related to the disallowance of expenses under Section 36(i)(iii) and Section 14A. It reviewed the Tribunal's decision to delete disallowances made by the Assessing Officer, considering the specifics of the case and relevant legal provisions. The Court also discussed the disallowance of payments to IFFCO and the adjustment of the purchase price of copper concentrate, emphasizing the factual nature of the issues. 3. The Court deliberated on the rate of guarantee commission and the Tribunal's decision to reduce it based on precedents. The judgment referred to the distinction between corporate guarantee and bank guarantee as established in previous cases. Additionally, the Court examined the allowance of additional depreciation under Section 32(iia) for Co-Generation Plant-2, considering the specific circumstances and legal provisions. 4. The Court analyzed the Tribunal's decision to allow deduction under Section 80IA using the market rate and discussed relevant case laws to support its conclusion. Furthermore, the judgment addressed the exemption of interest received from DHIL under Section 10(23G), referencing a previous ruling involving the same assessee to provide clarity on the matter. The Court provided detailed reasoning and legal interpretations for each issue raised in the appeal, ensuring a comprehensive analysis of the case.
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