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TMI Blog2016 (3) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the rate on which Tamilnadu Electricity Board supplies electricity. Even though there is no express agreement in respect of the electricity generated over and above 9 million units in every financial year, there is no obligation on the part of the assessee to supply the same to M/s Kanishk Steel Industries Ltd. In other words, the assessee may use the electricity generated over and above 9 million units in any financial year in accordance with its discretion. The agreement for licence does not provide for payment of any commission to the assessee by M/s Kanishk Steel Industries Ltd. In those facts and circumstances, this Tribunal is of the considered opinion that it is not a case of works contract as contended by the ld. DR. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the ld. DR, the power plant was set up M/s Kanishk Steel Industries Ltd. The assessee entered into an agreement with M/s Kanishk Steel Industries Ltd. for operating the power plant. The Assessing Officer found that the assessee is not the owner of the power plant, therefore, it is not eligible for deduction u/s 80IA of the Act. However, the CIT(A) by placing reliance on the order of this Tribunal in assessee s own case for assessment year 2009-10 in I.T.A.No. 2058/Mds/2013 dated 29.5.2015, found that the assessee is entitled for deduction u/s 80IA of the Act. 4. Referring to Explanation to sec. 80IA of the Act which was introduced by Finance Act, 2009, with retrospective effect from 1.4.2000, the ld. DR submitted that sec. 80IA may no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eel Industries Ltd. and there is no work remains to be executed by the assessee in respect of formation of the power plant. According to the ld. Representative, the term works contract means a work has to be executed by utilizing the raw material supplied by a third party. The resultant product has to be handed over to the person who is supplying the raw material. The person who is manufacturing the goods, is entitled only for a commission. In the case before us, according to the ld. Representative, the power plant was installed by M/s Kanishk Steel Industries Ltd. The assessee was entrusted the task of operating the power plant. As per the agreement, the assessee has to supply 9 million units of power in every financial year to M/s Kanis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 80IA of the Act. 7. Now for the assessment years under consideration, the ld. DR is raising an additional ground with regard to works contract on the basis of Explanation to sec. 80IA introduced by Finance Act, 2009. We have carefully gone through the Explanation introduced by Finance Act, 2009 with retrospective effect from 1.4.2000 which reads as follows: Explanation For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section(1)] In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence does not provide for payment of any commission to the assessee by M/s Kanishk Steel Industries Ltd. In those facts and circumstances, this Tribunal is of the considered opinion that it is not a case of works contract as contended by the ld. DR. It is a simple case of a licence to operate the power plant set up by M/s Kanishk Steel Industries Ltd. Since the income of the assessee includes profits and gains derived from generation of power, this Tribunal is of the considered opinion that in view of the judgment of Madras High Court in the case of M/s K.A Infrastructure Pvt. Ltd. (supra), the assessee is eligible for deduction u/s 80IA of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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