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TMI Blog2013 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... inesh Kumar Agarwal and Rajendra Singh, JJ. Appellant Rep by: Shri M.M Golvala Shri A K Khan Respondent Rep by: Shri Amar Deep ORDER Per: Dinesh Kumar Agarwal: These cross appeals by the assessee and the Revenue are directed against the order dtd. 19-11-2010 passed by the ld. CIT(A) for the A.Y. 2000-01. Since the facts are identical and the issue involved is common, both these appeals are disposed of by this common order for the sake of convenience. 2. Briefly stated facts of the case are that the assessee company is engaged in the business of manufacturing and sale of abrasive and refractory products. It filed the return of income declaring total income of Rs.14,10,87,170/-. However, the assessment was completed on a total income of Rs.16,16,55,953/- including the part disallowance of deduction u/s 80IA of the Income Tax Act, 1961 (the Act) in respect of DVC Plant which was allowed at Rs.14,15,755/- as against assessee s claim of Rs.16,60,364/- On appeal the ld. CIT(A) partly allowed the said claim of the assessee. On further appeal before the Tribunal, the Tribunal in ITA No.7073/Mum/2004 for the same assessment year vide order dtd. 28-8-2008 has res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allocation of electricity expenses in respect of DVC Plant to Rs.3,600/-, while computing deduction u/s 80-IB. 4. At the time of hearing, the ld. counsel for the assessee after giving brief background of the case refers to the relevant paras of the original assessment order, order of the ld. CIT(A) and order of the Tribunal appearing at pages 1 to 44 of the assessee s paper book. He also refers to the letter dtd. 16-9-2009 filed before the A.O. to substantiate its claim appearing at pages 45 to 54 of the assessee s paper book. He further submits that in the immediately preceding A.Y. i.e. 1999-2000 the assessee had made a claim u/s 80IA of the Act Rs. 1,61,99,219/- including the claim of DVC plant Rs. 12,65,247/- vide chart of computation of income appearing at pages 78-79 of the assessee s paper book and the A.O. in the assessment order dtd. 26-3-2002 has allowed the same, copy of the assessment order is appearing at pages 80 to 84 of the assessee s paper book. He further submits that in the subsequent A.Y. 2001-02 the assessee after including the amount of power Rs. 3406/- has made a claim of Rs. 10,60,854/- u/s 80IB appearing at page 85 of the assessee s paper book and the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the consumption of electricity is minimal because:- a) DVC is a separate product line, wherein the bonding material is mixed in a specified ratio with Aluminium Oxide grains to form DVC. The mixing is a highly skilled job. The DVC is then lines on furnace walls at the client s Plant, which is also a specialized job done by the assessee s skilled personnel. b) DVC is a proprietary product of Saint-Gobain. There is no competition for this product in India. The only competition is by use of different products, such as, Ramming mass produced by Lafarge etc. These products employ a different technology compared to the assessee s product. c) The order for supply of DVC is not only made on GNO for manufacture of the product, but also for the lining on the furnace walls of customers. Hence, the business of DVC is manufacture and installation (i.e. application of DVC lining on the large furnaces). d) The production of DVC depends upon the requirement of customers depending upon the type of furnace/kiln used by the customers. e) It is a product which is manufactured for specific orders since it is a specialized and high value product and not meant as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Hours 185.32 Total Power Units Consumed KWH 926.6 Rate Per Unit of Power 3.9 Total Power Cost Rs.3567.41 Power Rate Rs. 3.85 (Rs. 3.40 + 0.25 Fuel Escalation charges + 0.2 tax). We have not considered MD charges of Rs. 150 per KVA, since it would also be insignificant for the consumption. Sd/- M.R. Ramarathnam Factory Manager . 7. We further find that the A.O. after considering the assessee s submission, without pointing out any defect in the working given by the assessee to show that power cost computed by the assessee Rs. 3600/- in round figure is less than the actual cost of electricity pertaining to DVC plant, has rejected the claim of the assessee. Since the assessee has discharged its onus and in the absence of any contrary material placed on record by the Revenue to show that the working given by the assessee is not based on the correct facts and also keeping in view that in the preceding assessment years no such disallowance was made inasmuch as in the subsequent assessment year i.e. in A.Y. 2001-02, the A.O. has accepted the cost of the power Rs. 3406/- whil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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