9911796707
TMI Blog2019 (12) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... ok profit under section 115JB - HELD THAT:- A plain reading of the above provision reveals that the amount of provision written back shall be reduced from the book profit if the same has suffered the tax under MAT provision in the earlier years. Apparently, it appears that there is no ambiguity that the provisions pertaining to the assessment year 2002-03 and 2003-04 were not suffered to tax under the provisions of section 115 JB . However, the question arises where the assessee was subject to tax under normal computation of income even after giving the effect of such provision under MAT liability. In such a situation, we are of the view that it shall be deemed as if such provision has suffered to tax under MAT provision and the assessee shall get benefit in the year in which it is written back in the profit and loss account while determining the income under MAT provision of the Act. See M/S. GUJARAT INDUSTRIAL INVESTMENT CORP. LTD. AND VICE-VERSA. [ 2018 (9) TMI 1924 - ITAT AHMEDABAD] - Impugned provision written back needs to be reduced from the book profit as claimed by the assessee. Accordingly we reverse the order of the learned CIT (A) and direct the AO to delete the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on units such GSECL, NTPC etc. (2) Transmission Charges paid to GETCO as well transmission cost to Power Grid Corporation of India for distribution network. (3) Transmission and distribution loss on an average 23% to 25%. (4) Other fixed cost charges of MGVCL and various different rates and taxes. 4.1 However, in case of captive power plant assessee has not incurred such expenses. Therefore, the rate should be the rate of power generating unit such as GSECL and NTPC to calculate deemed sale. Accordingly AO calculated average rate at which GEB purchases electricity from Power Generating undertaking at 2.11 per unit and worked out the profit of ₹ 1643.52lakh only. Accordingly the AO restricted the deduction to the extent of ₹ 16.43 crores only. 5. On appeal by the assessee, the learned CIT(A) allowed the deduction to assessee considering the rate adopted for the sale of the electricity by GUVNL to the Customers. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 6. Both the ld. DR & AR before us relied on the orders of the authorities below as favourable to them. 7. We have heard the rival contentions of both the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities have not accepted the contention of the appellant and replaced the rate adopted by the assessee with the rate at which the electricity is purchased by the GEB from power generating unit. 24. We find that the word "open market" is not defined under the Act and in normal parlance it means , the price determined between the two unrelated parties in uncontrolled condition. Similarly the international valuation standard defines 'market value' as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms and length transaction after proper marketing wherein the parties had each acted knowledgeable, prudential and without completion. 25. We further observe that Hon'ble Jurisdictional High Court in the case of Gujarat Alkalies& Chemicals Ltd. (supra) dealing with the very same issue of deduction u/s. 80IA(4) of the Act as well as the meaning of 'market value' as provided in section 80IA(4) of the Act held that the 'market value' for the purpose of calculating deduction u/s. 80IA(4)is the rate of unit charge by the Gujarat Electricity Board to its customers by observing as follows:- 1. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rates of 2.47 per unit adopted by the Assessing Officer. 3. Since both the issues are covered by various judgments of this Court, we do not find it necessary to record facts at any length. Division Bench of this Court by judgement dated 22.11.2011 in Tax Appeal No.2092/2010 in somewhat similar controversy observed as under : "3. With respect to Question [B], the issue pertains to sub-Section (8) of Section 801A of the Income Tax Act, 1961. The assessee had a CPP Unit generating electricity, which was supplying it to a general unit. The electricity generated is being supplied to other consumers also. The CPP unit charged ₹ 5.40 ps. per unit from the general unit. The Assessing Officer applying sub-Section (8) of Section 80IA restricted the same to ₹ 5.32 ps. per unit and, thereby, restricted the deductions claimed by the assessee under Section 80IA of the Act. This restriction was primarily on the basis that the rate of ₹ 5.40 ps. charged by Gujarat Electricity Board (" GEB'* for short) was inclusive of 8 paise per unit of electricity duty. This component of electricity duty the Assessing Officer discarded for the purposes of ascertaining mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponent of 8 paise, which was electricity duty, to our mind, would make no difference in so far as the market value is concerned. To a consumer, the price being paid remains 5.40 ps. per unit. The fact that the seller retains only ₹ 5.32 ps. out of the said collection and passes on 8 paise per unit to the Government in the form of electricity duty, to our mind, would make no difference. This question is, therefore, not required to be considered." 4. This was followed in case of Commissioner of Income-tax v. Shah Alloys Limited in Tax Appeal No.2093/2010. This was reiterated in Tax Appeal No. 1646/2010 in case of ACIT Bharuch Circle, Bharuch Through Commissioner v. Pragati Glass Works Pvt Ltd. (order dated 30.1.2012), in which following observations were made : "7. To our mind, Tribunal has committed no error. Assessing Officer and CIT(Appeals) while adopting ₹ 4.51 per unit as the value of electricity generated by eligible unit of assessee and supplied through its non eligible unit only worked out cost of such electricity generation. In fact CIT(Appeals) in terms recorded that ₹ 4.51 was computed as the reasonable value of the electricity generated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also considered the case laws cited by the learned counsel for the assessee. Taking into consideration the judements of this court and other High Courts, cited above, we are of the opinion that the Tribunal has rightly allowed the claim of the assessee. In that view of the matter, we do not find any infirmity in the order of the Tribunal. Therefore, we answer question (C) and (D) in favour of the assessee and against the revenue." 6. Issues are thus considered on number of occasions by the Court and held against the Revenue. Questions are answered against the Revenue. Both the tax appeals are therefore, dismissed. 26. We further observe that Co-ordinate Bench dealing with the very same issue in case of assessee for A.Y. 2007-08 in ITA No. 729/Ahd/2010 dated 05.07.2013 decided the issue in favour of assessee thereby holding that the assessee has rightly adopted the price of electricity at which electric supply company are supplying power to its customers. 27. We further find that there is no dispute at the end of Revenue as to the eligibility of assessee fulfilling the condition needed to claim deduction u/s. 80IA(4) of the Act. We therefore respectfully following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,45,10,515/- only. Aggrieved by the decision of the CIT (A) the assessee is in appeal before ITAT. 11. The ld. AR before us submitted that the provision written back should be reduced from the book profit while determining the income under section 115 JB of the Act as the tax was charged under computation of income in respect of the AY 2002-03 and 2003-04. As such the income was not chargeable to tax under MAT in these two years even after making the addition for the impugned provision. Therefore, the effect for the impugned provision has already been given while determining the book profit under section 115JB of the Act. 12. On the other hand, the ld. DR vehemently supported the order of the authorities below. 13. We have heard the rival contentions and perused the materials available on record. The provision of section 115JB of the Act has direct bearing on the issue on hand which reads as under: "Special provision for payment of tax by certain companies.85 86 115JB. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance from the order of this Tribunal in the case DCIT Vs. Gujarat Industrial Investment Corporation Ltd. in ITA No. 1115/AHD/2011 dated 18-9- 2018 wherein it was held as under: "22.2 The plain reading of the above provision making it clear that the assessee is eligible for deduction for the provision written back if the same was offered to tax under the provision of section 115JB of the Act in the earlier year. For this purpose, we need to refer the earlier years where the assessee has paid tax under the provision of MAT. In this regard, assessee has filed detail of taxes paid under the provision of MAT which is place on page 196 of the paper book. On perusal of the details filed by the assessee, we note that the assessee was not paying the tax under the provision of MAT for the Assessment Years 2003-04 to 2006-07. The assessee has also filed the computation of income in respect of AYs pertaining to 2003-04 to 2006-07 which are placed on pages 198 to 206 of the paper book. As such tax liabilities under the normal computation income was greater than MAT provision therefore the assessee was not under the obligation to pay taxes under the MAT provision. In such a case it can be saf ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
