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TMI Blog2012 (11) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2003-04 Grounds 2 to 2.10 deal with the claim of the assessee relating to section 80-IA of the Income Tax Act, 1961 ('the Act' for short). Facts in brief are that the assessee is a private limited company engaged in the business of operation and maintenance of power plant. The assessee filed its return of income for the year under consideration declaring a total income of Rs. 48,41,44,760/- after claiming deduction u/s 80-IA of the Act to the tune of Rs. 3,32,24,876/-. The assessment was completed u/s 143(3) on a total income of Rs. 5,03,56,230/-. The AO has disallowed the deduction of Rs. 3,32,24,876/- claimed by the assessee u/s 80-IA of the Act on the ground that the assessee did not satisfy the conditions prescribed under the said section and that the assessee has not set up any power plant but only operating and maintaining the power plant set up by M/s. Samalpatti Power Company P. Ltd. The AO further observed that the assessee is only a contractor for the purpose of rendering services and hence the charges received by the assessee cannot be treated as profits derived from the industrial undertaking for the purpose of section 80-IA of the Act. 4. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h retrospective effect from 1.4.00. 22. In view of the discussions in the foregoing paragraphs and in view of the clear cut provisions of the Statute, we are of the opinion that the assessee is not entitled to claim deduction u/s 80IA(4) of the Incometax Act. Accordingly we confirm the order of the learned Commissioner of Income-tax (Appeals)." 7. We have heard both the sides, perused the records and gone through the orders of the authorities below. No material was brought to our notice to show that the said decision of the Tribunal has either been reversed or modified by the Hon'ble jurisdictional High Court. We therefore respectfully following the same dismiss the ground raised by the assessee. 8. For the reasons stated in para 7 above, the grounds No. 2 to 2.5 raised by the assessee for the assessment year 2004- 05 in ITA No. 939/Mds/2008,which pertain to the same issue, we dismiss the assessee's appeal for the assessment year 2004-05 also. Likewise, the grounds No. 2 to 2.5 in ITA No. 940/Mds/2008, raised by the assessee for the assessment year 2005-06 in respect of this issue are also dismissed for the reasons stated in para 7 above. 9. Coming to ground Nos. 3 to 3.4 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble by the owner is clearly mentioned in the agreement and AS 9 as relied upon by the assessee is not a notified accounting standard by the Board as prescribed under the provisions of sec. 145 of the Act. In view of the above, he confirmed the order of the AO. 11. On being aggrieved, the assessee carried the matter before the Tribunal. The learned counsel for the assessee has submitted that contract is for the period 15 years. The quantification of fees is for one year. So the entire contract has to be taken into consideration for the purpose of taxation. One year is not the decisive factor. 12. On the other hand, the learned DR strongly supported the order passed by the learned CIT(A) and submitted that the assessee is receiving the receipts on yearly basis. Therefore only the year is the decisive factor. It is submitted that the assessee wants to follow new method of accounting which is not permissible and in support of his contention he relied on the decision of the Hon'ble Supreme Court in the case of CIT v. Hindustan Zinc Ltd. (291 ITR 391). He further submitted that the assessee following the mercantile system of accounting, AS 9 has no application. For this contention he r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provision was applicable only from the assessment year 2004-05 onwards. The learned CIT(A) considered the issue and observed that section 234D was inserted in the Act by the Finance Act, 2003 w.e.f. 1.6.2003. There is no mention in the said provision that this section is applicable from Assessment Year 2004-05 onwards. Scrutiny assessment of the assessee for the year under consideration was completed subsequent to the insertion of this provision. Therefore, the interest derived by the assessee on the refund resulting from the summary assessment is required to be withdrawn u/s 234D of the Act from the date of insertion of this provision i.e. from 1.6.2003 and the ground of appeal raised by the assessee was dismissed. However, he directed the AO to compute the interest u/s. 234D w.e.f. 1.6.2003. 21. The assessee carried the matter before the Tribunal. It was submitted that sec. 234D of the Act applies only to the assessment year 2004-05 and not to assessment year 2003- 04. 22. The learned DR has submitted that the issue is covered by the decision of the Hon'ble jurisdictional High Court in the case of CIT v. Infrastructure Development Finance Co. Ltd. (340 ITR 580) (Mad). 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s. Samalpatti Power Corporation (P) Ltd. asking the assessee to withdraw the claim of service tax on operation and maintenance charges for the financial years 2003-04 and 2004-05. He further submitted that as per clause 4.10 of O & M agreement, any liability on account of change in law is payable only if it is reimbursed by TNEB to M/s. Samalpatti Power Corporation (P) Ltd. and as per clause 16.3 of PPA between TNEB and M/s. Samalpatti Power Corporation (P) Ltd. any liability on account of change in law is payable to TNEB only if it exceeds US $ 100,000 per year. The assessee's counsel submitted that service tax liability did not exist if it exceeded US $ 100,000 per year and M/s. Samalpatti Power Corporation (P) Ltd. asked the assessee to withdraw the claim of service tax and the same was written off as bad debt. The CIT(A) after considering the submissions of the assessee allowed the claim of bad debts. 26. On being aggrieved, the Revenue has carried the matter before the Tribunal. The learned DR submitted that the claim of the assessee is not allowable as per section 36(1)(vii) of the Act. Further he submitted that the learned CIT(A) without considering the above p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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