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TMI Blog2016 (6) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 80IA of the Act, pointed out the price for transferring generated electricity by one division to another. Such working out included the cost of production of steam and the cost at which it was charged to the consuming unit. It was only after verifying such details that the Assessing Officer in the order of assessment dated 31.10.2012, made no alteration in the petitioner's claim of deduction under section 80IA of the Act. He disallowed certain part of the petitioner's claim for depreciation, but no disallowance was made on the claim for deduction under section 80IA of the Act. In fact, in the assessment order he noted that the petitionerassessee had claimed the deduction on such power generation though, the power is captively used by separate industrial undertaking of the assessee company. It can thus, be clearly seen that the entire claim of deduction of the petitioner under section 80IA was minutely scrutinized by the Assessing Officer in the original assessment proceedings. As long as the claim was examined and no additions made, it would not be open for the Assessing Officer to reopen the assessment on the premise that in the original assessment, no rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote on deduction claimed u/s. 80IA Detailed calculation of claim u/s. 80IA for generation of power plant division justification of transfer price to interdivision We give here below the statement showing the computation of profit and loss of power plant. Statement of Computation of Cost of Steam and Power Sr. Particulars 2007-08 A Quantitative details 1 Total Steam Generation Kgs 154614651 2 Steam to Process Kgs 107678291 3 Steam Power Plant Kgs 46936360 4 Fuel Consumed (Lignite) Kgs 38118207 5 Stem/Fuel Ratio a1/a3 4.06 Total Power Generated Units 14889700 Power Plant Consumption Units 3032648 Power to Process Units 11857052 B Expenses Incurred Total Rs / Kg 1 L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80IA on any count, though he did not record any findings in this respect. 8. To reopen such assessment, the respondent Assessing Officer issued notice dated 20.06.2014. He supplied the reasons recorded by him to issue the notice which read as under: The assessee has claimed deduction u/s. 80IA of ₹ 2,93,61,164/in respect of Captive Power Plant of the assessee. During the course of assessment proceedings for A.Y. 201112 it was noticed that the assessee was claiming deduction u/s. 80IA of the Act in respect of Captive Power Plant of the assessee. It was seen during the assessment proceedings that 78.9% of the total profit derived from Captive Power Plant is in respect of sale of steam rather than generation of electricity. Further, it was seen that the profit from sale of steam was on account of the fact that the sale price of steam was taken arbitrarily. It is an established fact that steam is not a commercial commodity and is not brought to market for sale and purchase. It is not capable of being transported to a distant place because it could lose it's potential heat. Moreover, because of huge requirement of compressor power for transportation and cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year. The Assessing Officer however, rejected the objections of the petitioner by the order dated 20.10.2015. Hence, the petition. 10. Shri Divatia, counsel for the petitioner submitted that in all three assessment years, the Assessing Officer has recorded identical reasons for reopening the assessments previously framed after scrutiny. In all cases, the claim of the petitioner for deduction under Section 80IA of the Act was examined during the original assessment. Additionally, in two cases, the notices have been issued beyond four years from the end of relevant assessment year without there being any element of failure on the part of the assessee to disclose truly and fully all material facts. Counsel relied on the decision of full bench of Delhi High Court in case of Commissioner of Incometax v. Usha International Ltd., reported in 2012 348 ITR 485, to contend that once the claim has been examined by the Assessing Officer during the assessment proceedings, merely because in the order of assessment, no discussion is made on such a claim, would not permit the Assessing Officer to reopen the assessment on the same ground since it would amount to a mere change of opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer in the order of assessment dated 31.10.2012, made no alteration in the petitioner's claim of deduction under section 80IA of the Act. He disallowed certain part of the petitioner's claim for depreciation, but no disallowance was made on the claim for deduction under section 80IA of the Act. In fact, in the assessment order he noted that the petitionerassessee had claimed the deduction on such power generation though, the power is captively used by separate industrial undertaking of the assessee company. 14. It can thus, be clearly seen that the entire claim of deduction of the petitioner under section 80IA was minutely scrutinized by the Assessing Officer in the original assessment proceedings. The Assessing Officer had raised queries and elicited the petitioner's response. Being satisfied about the claim of deduction, final order of assessment was passed. It may be that the Assessing Officer did not record his reasons for not making any additions. This however, would not be material. As long as the claim was examined and no additions made, it would not be open for the Assessing Officer to reopen the assessment on the premise that in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus complete. Merely because he chooses not to assign his reasons in the assessment order would not alter this position. It may be a nonreasoned order but not of acceptance of a claim without formation of opinion. Any other view would give arbitrary powers to the Assessing Officer. 43. We are, therefore, of the opinion that in a situation where the Assessing Officer during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with respect to such a claim and thereafter, does not make any addition in the final order of assessment, he can be stated to have formed an opinion whether or not in the final order he gives his reasons for not making the addition. 15. Likewise, full bench of Delhi High Court in case of Commissioner of Incometax v. Usha International Ltd., reported in 348 ITR 485 through majority of opinion held and observed as under: 39. In view of t ..... 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