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TMI Blog2022 (6) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... Considering the finding of the ld. CIT(A) on this issue, we do not see any reason to interfere in it. AO has rightly been directed not to exclude a sum from eligible profit for grant of deduction under section 80IA. Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ciating the facts that each year is separate year and the apportionment of expenditure depends upon the facts of each year. 2. The assessee, in the present case, is a company which is engaged in the business of manufacturing and reseller of Angle Channels Ingots. The return of income for the year under consideration was filed by it on 27.10.2017 declaring a total income of Rs. 16,60,72,740/- after claiming deduction of Rs. 9,88,84,902/- under Section 80IA(4) of the Income-tax Act, 1961 ("the Act" in short) in respect of profit derived from its eligible unit namely Power Plant Division. The case of the assessee was selected for scrutiny under CASS and a notice under Section 143(2) of the Act was issued to the assessee on 13.08.2018. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has shown net profit @ 67.16% in respect of turnover of Rs. 14,51,69,472/- of Power Plant Division whereas the net profit of only 2.77% was shown by the assessee in respect of its Steel Business. Keeping in view this inordinately high net profit declared by the assessee in respect of Power Plant Division which was eligible for deduction under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 163044.2 1467397.8 Legal Fees 1826809 182680.9 1644128.1 Office Misc. Exp 608748 60874.8 547873.2 Post & Telephone 1074579 107457.9 967121.1 Printing & Stationer 86390 8639 77751 Salary & Wages 25028062 2502806.2 22525255.8 Vehicle 15507112 1550711.2 13956400.8 TOTAL 2,09,87,011 4. The Assessing Officer thus reduced the profit of the Power Plant Division of the assessee-company by Rs. 2,09,87,011/- being common expenses attributable to the said unit and restricted the claim of the assessee for deduction under Section 80IA(4) of the Act amounting to Rs. 9,88,84,902/- to Rs. 7,78,97,891/- in the assessment completed under Section 143(3) of the Act vide order dated 18.07.2019. 5. Against the order passed by the Assessing Officer under Section 143(3) of the Act, an appeal was preferred by the assessee before the learned CIT (A) and after considering the submission made on behalf of the assessee as well as the material available on record, the learned CIT (A) decided the issue relating to the quantum of deduction allowable to the assessee-company under Section 80IA(4) of the Act in respect of the eligible Power Plant Division vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same reached to the Tribunal initially for AY 2008-09, the Tribunal upheld the appellate order of the learned CIT (A) giving similar relief to the assessee on the issue under consideration for the following reasons given in paragraph Nos. 7 to 12 of its order dated 19.03.2018 passed in ITA No. 1239/Ahd/2013:- "7. With the assistance of the ld. representatives, we have gone through the record carefully. The first adjustment made by the AO in the eligible profit is reduction of Rs. 30,70,108/- on account of allocation of proportionate expenses between power plant as well as sponge iron plant. Details of expenses have been reproduced by the AO in para 3.2.4 on page no.6 of the assessment order. Major items which have been considered by the ld.CIT(A) for exemption from adjustments are as under: "Factory General Exps. - Rs. 2456/- Purchase of Fuel - Rs. 649571/- Purchase of stores & spares - Rs. 924144/- Repairing & maintenance - Rs. 773803/- Transportation Exps. - Rs. 445355/- Total Rs.2795329/- 8. There is no dispute with regard to the proposition that if two units consisting of 80IA and non-80A are being managed and controlled under common administration and being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded this expenditure. The ld. CIT(A) has also examined other factory general expenditure and transport expenditure. After taking into consideration the finding of the ld. CIT(A), we do not find any reasons to interfere in the order of the ld. CIT(A), so far as issue no.1 is concerned. The ld. CIT(A) has directed the AO not to reduce Rs. 27,95,329/- out of eligible profit on account of allocation of expenditure. The order of the ld. CIT(A) on this issue is upheld. 9. Next item relates to adjustment of coal price. As observed earlier, power plant is being run on steam generated as by-product in the hands of sponge iron plant. In order to ensure smooth supply of steam, power plant needs reheater which ensures smooth and continuous supply of steam to turbine. In this re-heater waste coal was being used by the assessee. Assessee has purchased waste coal at the rate of Rs. 844/- per ton from steel unit. The ld.AO estimated that at least 5% of the total coal used by the assessee must be of first grade. Hence, he made adjustment of Rs. 29,02,335/- of coal price i.e. the assessee must have incurred this much expenditure over and above shown by it. The ld. CIT(A) has deleted this adjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at the rate of Rs. 5.41 per unit, whereas the assessee charged at Rs. 5.75 per unit. The average price from April, 2008 to March, 2009 was Rs. 5.75 per unit by PGVCL and Rs. 5.75 per unit by the assessee. On the other hand, the ld. DR relied upon the order of the AO. 12. On due consideration of the comparative table of charges of electricity i.e. one of Electricity Board and one by assessee to the iron sponge plant, we are satisfied that the assessee has not charged the price to its associate concern at an higher rate. It is commensurate to the market rate. Considering the finding of the ld. CIT(A) on this issue, we do not see any reason to interfere in it. The AO has rightly been directed not to exclude a sum of Rs. 20,75,210/- from eligible profit for grant of deduction under section 80IA of the Act. In view of the above discussion, we do not find any merit in the appeal of the Revenue. It is dismissed." 7. The decision rendered by the Co-ordinate Bench for AY 2008-09 has been subsequently followed by the Tribunal for deciding the similar issue in favour of the assessee for AY 2009-10 vide its order dated 30.05.2018 passed in ITA Nos. 1779 & 1925/Ahd/2014. 8. At the time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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