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TMI Blog2016 (9) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) has erred in not recognizing the new power plant as new industrial undertaking for the purpose of granting deduction u/s 80IA of the Act. This ground of the assessee was rejected by the Tribunal vide its order dated 16.5.2008 and the Tribunal has recorded following finding :- 7. Ground Nos.3 and 4 relate to the claim of the assessee for deduction u/s 80-IA in respect of new power plant. The assessee claimed that during the year he has established the new power plant and accordingly claimed the deduction on that power plant u/s 80-IA of the Act. When questioned by the AO, the assessee vide letter dated 9/3/2004 pointed out that for generation of the power what is required is turbine. For composite plant for generation of power what is required is boiler and turbine. Boiler manufactures the steam which is the raw material for turbine. Turbine is independently kept for generating power. The assessee installed new turbine which itself is a new industrial undertaking capable of generating electricity. This turbine can be operated by purchasing steam from outside source but the assessee since had the spare capacity of steam used the same for generating electricity in turbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not entitled to claim deduction u/s 80IA on new power plant amounting to ₹ 15,68,40,556/-.This ground of appeal is therefore rejected. 8 Before us, the learned AR vehemently contended that the installation of a new turbine is a new Industrial Undertaking capable of generating electricity. This undertaking is being run independently. Merely that the assessee was using the steam as raw material from the existing boiler does not mean that a new Industrial undertaking has not come into existence. The assessee could, have bought the steam from outside also. The power and plant is a separate unit from the boiler. Therefore, the assessee should have treated new turbine to be an Industrial Undertaking. Even otherwise also it was contended that the value of the boiler in any case was less than 20% of the total plant and machinery installed by .the assessee. Both the learned AO and the learned CIT(A) could not be able to understand that the power can be generated independently. Thus, it was contended that the assessee was entitled for the deduction u/s 80IA. The learned DR, on the other hand; relied on the order of the AO. 9 We have/carefully considered the rival submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been established. The new turbine established by the assessee cannot itself generate the power. The undertaking so that it may generate the power will be complete only when both new turbine and the boiler are installed. The assessee has not installed boiler but it is part of existing undertaking generating the .power. This, in our opinion, is merely an expansion of the existing undertaking. If the existing boiler is carved out from the new turbine installed by the assessee, the new turbine claimed to be eligible undertaking itself cannot generate the power. No material or evidence was brought to our knowledge which may prove that the new turbine installed by the assessee can independently generate the power. The assessee is already having the undertaking engaged in the business of generating the power. The assessee in this case has merely added a new turbine to the existing undertaking by which his capacity to generate the power has increased. This, in our opinion, is merely an expansion of the existing undertaking. The new undertaking as is eligible u/s 80IA, in out opinion, must be independent and integrated unit which should be able to carry on the activities or to carry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent powers of the Tribunal. In the present case, the Tribunal in its Order dated 10.9.2003 allowing the Rectification Application has given a finding that Samtel Color Ltd. (supra) was cited before it by the assessee but through oversight it had missed out the said judgment while dismissing the appeal filed by the assessee on the question of admissibility/allowability of the claim of the assessee for enhanced depreciation under section 43A. One of the important reasons for giving the power of rectification to the Tribunal is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record. 10. From the facts on record, it emerges that the Tribunal in its original judgment dated 16.05.2008 had held that the assessee had not established a new power plant so as to qualify for deduction under section 80IA of the Act. The Tribunal recalled this order in exercise of powers of rectification on the ground that this view is not in consonance with in case of Gujarat Alkalies and Chemicals Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rror apparent on the face of the record. In the said judgment, the Supreme Court approved the decision of Gujarat High Court in case of Saurashtra Kutch Stock Exchange Ltd. (supra). 14. In view of such settled legal position, we may examine the facts on hand. As noted, the assessee had installed a turbine for power generation, which relied on the excess steam production capacity of the plant. The assessee claimed that it had thus, set up a new power plant which qualify for deduction under section 80IA of the Act. The Tribunal by its original judgment, upheld the view of the Revenue authorities holding that turbine itself would not be sufficient to generate power and the plant therefore would not qualify as a new industry. On the basis of judgment of Supreme Court in case of Gujarat Alkalies and Chemicals Ltd. (supra), however, the Tribunal was persuaded to recall this judgment and post the appeal for further hearing. In Gujarat Alkalies' case, the facts were that the assessee was in the business of manufacturing caustic soda and other chemicals, for which, it had installed a production plant. The assessee acquired a new industrial license and a new letter of intent for subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue authorities which was upheld by the Tribunal was that by mere installation of turbines, the assessee did not install a new industry, since turbines themselves would not be sufficient for power generation, without generation of steam. When the High Court in case of Gujarat Alkalies and Chemicals Ltd. (supra) referred to the issue depending on the nature of technology and mechanism of production, it left this question open to be judged case specific. This was therefore not a case where by virtue of the judgment of the case of High Court in case of Gujarat Alkalies and Chemicals Ltd. (supra), it can be stated that the Tribunal had committed an error apparent on record which needed rectification. At best, the High Court propounded that mere dependence of a new industry on an existing industry, would not disqualify itself from claiming deduction. 17. In the result, respective orders of the Tribunal dated 11.05.2012 and 22.03.2013 are set aside. Question answered in favour of the Revenue. Tax appeals disposed of accordingly. 3. Since the finding which has restored ground no.3 for read-judication has already been set aside, therefore, there is nothing for this Bench to deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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