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TMI Blog2021 (1) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 40(a)(ii) of the Act . This Bench of the Tribunal has applied and followed these decisions in the case of ITC Limited [ 2018 (11) TMI 1611 - ITAT KOLKATA] and other cases. Respectfully following the same we allow this claim of the assessee. - I.T.(S.S.)A. No. 71/Kol/2019, C.O. No. 23/Kol/2020 Arising out of I.T.(S.S.)A. No. 71/Kol/2019 - - - Dated:- 12-1-2021 - Sri J. Sudhakar Reddy, Accountant Member And Sri S.S. Godara, Judicial Member For the Assessee : Sh. S.K. Tulsiyan, Adv. And Ms. Puja Somani For the Revenue : Sh. Imokaba Jamir, CIT(DR) ORDER PER J. SUDHAKAR REDDY, AM: This is an appeal filed by the Revenue directed against the order of the Learned Commissioner of Income Tax (Appeals)-22, Kolka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . AO in his original assessment order passed u/s 153A/143(3) had taken the rate of Rs.l.85/unit as opposed to ₹ 4.36/unit adopted by the appellant and accordingly reduced the deduction claimed u/s 80IA to the extent of ₹ 5,32,91,803/-. Thereafter, the matter travelled to the Hon'ble ITAT, Kolkata which in its consolidated order passed in IT(SS) No. 47 to 53/Kol/2014 dated 25.11.2016 set aside the matter back to the Ld. AO to ascertain the transfer rate u/s 80IA(8) afresh. Pursuant to the appellate order passed by the Hon'ble ITAT, Kolkata; the Ld. AO passed the impugned order dated 31.08.2017 wherein although he accepted the assessee's contention to the extent that, for the purposes of Section 80IA(8), the average ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the facts of the case and the decisions available on this subject, it is noted that the decision relied upon by the Ld. AO in the case of West Coast Paper Mills Ltd (supra) which was rendered in 2006 has been impliedly overruled by the subsequent order passed by the Hon'ble ITAT, Mumbai in the case of West Coast Paper Mills Ltd which is reported in 33 ITR(Trib) 560. In the subsequent decision, the Hon'ble ITAT, Mumbai has held that for determining the market price in terms of Section 80IA(8), the landed cost cannot ^reduced by the taxes, duties, cess etc. which are embedded therein. In these circumstances I find merit in the Ld. AR's contention that the decision relied upon by the Ld. AO for making the impugned disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the per unit selling price of electricity equal to the rate at which the assessee purchased the electricity from SEB. 7. Reliance is also placed on the judgment of the Hon'ble Chhattisgarh High Court in case of CIT v. Godawari Power Ispat Ltd. [2014] 42 taxmann.com 551/223 Taxman 234, in which the Court held and observed as under: 31. The market value of the power supplied to the Steel-Division should be computed considering the rate of power to a consumer in the open market and it should not be compared with the rate of power when it is sold to a supplier as this is not the rate for which a consumer or the Steel-Division could have purchased power in the open market. The rate of power to a supplier is not the market rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons set out in the foregoing therefore I hold that the methodology followed by the appellant (also judicially approved by higher judicial forums discussed above) determining the transfer rate for the purposes of Section 80IA(8) at ₹ 4.36/unit was justified. Accordingly the Ld. AO is directed grant the deduction u/s 80IA based on the transfer price of ₹ 4.36/unit and accordingly re-compute the eligible deduction u/s 80IA of the Act. While computing the deduction permissible, the Ld. AO shall give an opportunity of hearing to the appellant and will re-compute the deduction in terms of the directions above. 3. The ld. D/R could not point out any infirmity in this factual finding of the ld. CIT(A). Hence we uphold the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection is filed is claim of deduction of education cess paid. This issue is covered in favour of the assessee by the decision of the Hon ble Rajasthan High Court in the case of Chambal Fertilizers Ltd. vs. DCIT in ITA No. 52/2018 dated 31.07.2018, wherein it was held that education cess is not a part of tax. Accordingly, the same was held as allowable as a deduction and that disallowance u/s 40(a)(ii) of the Act cannot be made. 7.1. The Hon ble High Court of Bombay in the case of Sesa Goa Ltd. vs. JCIT in Tax Appeal Nos. 17 18 of 2013 dated 28.02.2020 held that education cess is allowable expenditure as the word cess is conspicuously absent under the provision of Section 40(a)(ii) of the Act . This Bench of the Tribunal has appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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