ANUH PHARMA LIMITED ,MUMBAI vs. PRINCIPAL COMMISSIONER OF INCOME TAX, CIRCLE -5, MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against revisional order dated 19.03.2025 passed by the Ld. Principal Commissioner of Income-tax, Mumbai – 5 [in short the Ld. ‘PCIT’] under section 263
of the Income-tax Act, 1961 ( in short the ‘Act’ ) for assessment year
2020-21, raising following grounds:
1.0 That on the facts and in the circumstances of the case, the impugned order passed u/s 263 is grossly arbitrary and bad in law in relatio needs to be su
1.1 That on t
Ld. PCIT wa proceedings u the order u/s nor prejudicia proceedings a 2.0 That, on t without preju grossly erred deduction u/
fact that the prevailing pro by the Ld AO
3.0 That on t without prejud and grossly claimed dedu that the claim provisions of AO in assessm
4.0 That on t
Ld. PCIT was assessee has that, the clai judicial prece considered by 2. Briefly stated, f return of income for declaring total incom
‘the Act’) at Rs.11,8
alternative tax (MAT the assessee revised the same total incom return was selected
ITA n to the issues raised and adjudicated t ummarily deleted.
the facts and in the circumstances of th as not justified and grossly erred in u/s 263 of the Act without appreciating th
143(3) passed by the Ld. AO was neithe al to interests of the Revenue and th are bad in law.
the facts and in the circumstances of the udice to above, the Ld. PCIT was not ju in holding that, the assessee has wrong s 80G on CSR expenses without appre e claim was fully justified and in-line ovisions of the law, which had been duly in assessment proceedings.
the facts and in the circumstances of th dice to Ground above, the Ld. PCIT was n erred in holding that, the assessee ha uction u/s 80-IA(4)(iv) without appreciati m was fully justified and in-line with the the law, which had been duly examined ment proceedings.
the facts and in the circumstances of th s not justified and grossly erred in holdin s wrongly claimed deduction without a m of deduction has been duly allowed edents on the same facts which had y the Ld AO in assessment proceedings.
facts of the case are that the a r the year under consideration me under the regular provisions
85,07,580/- and book profit u
Provision) of Rs.17,58,92,193/- its return of income on 12.02
me and book profit under MAT.
for complete scrutiny on the i
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therein and he case, the n initiating he fact that er erroneous herefore the e case, and ustified and gly claimed eciating the e with the y examined e case and not justified as wrongly ing the fact e prevailing d by the Ld he case, the ng that, the appreciating by various been duly assessee filed its on 10.02.2021
of Act (in short under minimum
-. Subsequently,
2.2021 declaring
Thereafter, the ssues including verification of deduc
80IA of the Act. The 144B of the Act o
Rs.12,14,27,357/-.
2.1 Subsequently, t examination, he was assessment order w interest of Revenue
Rs.1,62,14,945/- cla effect was erroneou assessee had debite
Social Responsibility and disallowed the s under the head prof said expenditure ass amounting to Rs.1
accordance with law
2.2 The Ld. PCIT al which ought to h circumstances of cas the Assessing Officer
2.3 Accordingly, th under section 263 of ITA ction claimed for industrial u e assessment was completed u on 23.09.2022, determining t the Ld. PCIT called for the re s of the view that on two speci was erroneous in so far as pr e. Firstly, deduction u/s 80IA aimed on cooling tower for gen usly claimed by the assessee.
ed Rs.30,20,800/- under the h
(CSR) ’ activities in the profit a said expenses while the compu fit and gains of business, howe sessee claimed deduction u/s 18,29,265/-, which was not .
lso noted that the inquiry on th have been carried out in se and in law , but had not been .
he learned PCIT issued a show f the Act requiring the assessee
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undertaking u/s /s 143(3) r.w.s.
otal income at ecord and after ific issues, the rejudicial to the A amounting to nerating cooling
. Secondly, the head ‘Corporate and loss account uting of income ever against the 80G of the Act t allowable in hese two issues, the facts and n carried out by w cause notice to explain as to why the assessment far as it is prejudici consideration of th assessee, the learned section 80IA of the account of absence application of law. Li under section 80G learned PCIT record conduct any inquiry based on an erroneou
3. Aggrieved with appeal before us.
4. Before us, the L containing pages 1 to 5. In ground No. 1
Ld. PCIT submitting t by the Assessing Of both the issues.
5.1 The Ld. counse
28 to 31, which is a the Act. The Ld. cou asking the assessee
ITA order should not be treated as ial to the interests of the Reve he submissions advanced on d PCIT held that the claim of d
Act had been erroneously al of inquiry as well as on accou ikewise, with respect to the ded of the Act amounting to Rs.1
ded that the Assessing Officer and that the allowance of the us interpretation of the statutory the finding of the Ld. PCIT, th
Ld. counsel for the assessee file o 146. , the assessee has challenged th that proper and detailed inquiry fficer before passing the assess l for the assessee referred to P notice dated 31.01.2022 issue unsel referred to the page 30 w to establish the genuineness o
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erroneous in so enue. Upon due behalf of the deduction under llowed, both on unt of incorrect duction claimed
8,19,265/-, the r had failed to e deduction was y provision.
e assessee is in ed a Paper Book he finding of the y was conducted sment order on Paper Book page ed u/s 142(1) of wherein a query of the deduction claimed has been ma
01.03.2022 explained eligibility under the p referred to Paper Bo
Assessing Officer th
20.07.2022 asking t machinery of the po raised by undertakin the Ld. counsel for t
53 which comprises through cooling towe
5.2 Regarding the C the Act, the Ld. coun show cause notice da asking the assessee
Act be disallowed in 80G of the Act. The 61 of the Paper Boo deduction u/s 80G o coordinate benches o
5.3 In the light of assessee submitted necessary inquiries w facts and circumstan
ITA ade. In response the assessee v d about the deduction u/s 80IA provisions of the Act. Further, ook page 48 which is a query hrough notice u/s 142(1) of the assessee to provide detail ower undertaking along with c ng for consumption of cooling po he assessee referred to Paper B s note on the eligibility of p r.
CSR expenses claimed as donat nsel referred to Paper Book pag ated 20.09.2022 issued by the a as why the deduction claimed n the light of legislative intent
Ld. counsel referred to Paper B ok containing detailed reply for f the Act relying on the various of Tribunal.
the above discussion, the Ld.
that Assessing Officer has car which ought to have been car nces in the case of the assessee
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vide letter dated claimed and its the Ld. counsel y issued by the the Act dated ls of plant and opy of the bills ower. Before us,
Book page 49 to power generated tion u/s 80G of ge 54 which is a assessment unit u/s 80G of the behind section Book page 52 to r justification of decisions of the counsel for the rried out all the rried out in the e and therefore, the clause (a) of Exp invoked in the case o decision of the Hon
Integrate Solutions wherein it is held th pen of the Assessing out the investigation taken that he accept counsel also relied on in the case of Comm
Estate Developers Pv wherein it is held relevant material on assessee, the Ld. PCI pass an revisional ord
Assessing Officer to e
5.4 Per contra, the submitted that the grounds inter-alia (i) stock valuation; (iii) w research; and (iv) de u/s 80IA of the Act passed u/s 143(3) o
Officer have dealt t
ITA planation 2 to section 263 of th of the assessee. The Ld. counse n’ble Supreme Court in the Pvt. Ltd. (2025) 173 taxmann at the assessee does not have Officer and once, the Assessing n but does not make any add ted the plea and stand of the as n the decision Hon’ble High Cou missioner of Income-tax Kota vt. Ltd. reported in (2014) 52 ta that the Assessing Officer ha n record passed assessment o
IT without rejecting those docum der setting aside assessment wi examine material available on re
Ld. DR referred to the assessm case was selected for scrut for verification of certain relie weighted deduction for expendit eduction in respect of industr t. He submitted that in the as f the Act dated 23.09.2022, th the issue of claim of other d
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e Act cannot be el referred to the case of V-con n.com 774 (SC) control over the g Officer carried dition it can be ssessee. The Ld.
urt of Rajasthan v. Deepak Real axmann.com 75, aving examined rder in case of ments could not ith a direction to ecord afresh.
ment order and tiny on various ef or losses; (ii) ture on scientific rial undertaking ssessment order he Ld. Assessing eduction under Schedule BP of Rs.
disallowed the cla
Rs.24,16,777/-. On a Officer accepted the adverse interference deduction u/s 35(2
development, the Ass the assessee allowed out of claim of Rs.3,
Rs.5,03,000/-. On th off u/s 41 of the A submission of the a order that no adverse
5.6 The ld DR emph for industrial underta submission of the as drawn. The Ld. DR a recorded complete su order. But the sub claimed by the asse eligibility of ‘cooling neither been recorded any reference of the submitted that no ITA

1,02,50,713/- on pages 2 to aim of deduction of cess another issue of stock valuation submission of the assessee an had been drawn. On the iss
2AB) of the Act for in-house sessing Officer after considering d the weighted deduction of R
,03,90,498/- and disallowed ex he issue of taxability of business
Act also, the Assessing Office ssessee and duly recorded in e interference had been drawn.
hasized that on the issue of ded aking also the Assessing Officer ssessee and held that no advers ccordingly submitted that the A ubmission of the assessee in bmission dated 16.08.2023, w essee as filed before the AO, o g tower’ and ‘power generatio d or noted in the assessment or said letter in his order. Furth o evidence in support in Anuh Pharma Ltd
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17 wherein he amounting to n, the Assessing d noted that no sue of weighted e research and g submission of Rs.2,88,83,000/- xcess amount of s liability written er accepted the the assessment duction claimed r considered the se inference was Assessing Officer the assessment which has been on the issue of on facility’ has rder nor there is her, the Ld. DR the form of acknowledgement of 16.08.2023 before th the assessee and the had filed said detai plant. Therefore, the inquiry which ough process of cooling temperature and doe in common parlance enquiry on this issue
5.7 Regarding the i submitted that the A as how the deduction the nature of volun assessee has incur provisions of the Com the character of vol donation u/s 80G of 6. We have caref perused the materia adjudicated is wheth
“erroneous in so far
Revenue” within the ITA f uploading electronically of su he ‘faceless assessment unit’ h erefore, it cannot be establishe ils justifying the deduction on Assessing Officer has failed in c t to have been carried out in only involved variation in s not amount to production of t is the electricity, the AO was re e from the assessee.
issue of deduction u/s 80G al
Assessing Officer has failed to ca n was falling in the definition o ntarily payment. The Ld. DR rred CSR expenses under mpanies Act, 2013 and therefo luntariness required as primar the Act.
fully considered the rival su al placed on record. The con her the assessment order can r as it is prejudicial to the i meaning of section 263 of the Anuh Pharma Ltd
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uch reply dated as been filed by ed that assessee n cooling tower carrying out the n the case. As n the thermal the power which equired to make lso, the Ld. DR arry out inquiry of a donation in submitted that the mandatory ore, same looses ry condition for ubmissions and ntroversy to be n be said to be interests of the Act, for want of inquiry by the Asses
Explanation 2 to sect
6.1 As far as issue admittedly the notice issued and reply of query and reply is rep
“ Query:
5. You hav
1A/80-IB/80- the underta deduction cl
Reply:
6.0 Deductio
6.1 The Comp manufacture trading in ph
Development has started c in form of coo
6.2 In this reg i. Details of th
Annexure – 18
ii. Audited Ac
19. iii. Form 10C
Annexure – 20
iv. It would b deduction on approval from the same and ITA ssing Officer, as contemplated tion 263. of deduction u/s 80IA of the A e u/s 142(1) of the Act dated 3
the same is also on the recor produced as under:
ve claimed deduction under section -IC which is significantly high vis-is t aking. Please estabalish the genui laimed.
on u/s 80IA of the Act:
pany is a listed company engaged in the of bulk drugs and pharmaceutical formu harmaceutical products and in-house Res facility. The assessee from AY 2019-2
laiming deduction u/s 80IA on the power ling power.
gard, the assessee would like to submit a he working of section 801A deduction is a 8. ccounts of the undertaking is attached as CCB uploaded certified by the CA is a 0. be relevant to note that, for claiming se power, there is no condition for taking m the government authorities, without p d as required by your goodself the releva
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in clause (a) of Act is concerned
31.01.2022 was rd. The relevant n 80-1/80- turnover of ineness of business of ulations and search and 20 onwards r generated as under:
attached as Annexure –
attached as ection 80IA g any prior prejudice to nt copies of the approval
Annexure - 21
v. The addres
Boisar, Maha vi. The asses
(SEZ). The ass vii. The pow
Refrigeration manufacturin viii. The asse earlier AY an year, thus the 6.3 Further, t are as follows
Condition: Th splitting up or Compliance:
altogether n separate from Condition: It machinery or Compliance: I has been pur are transferre this condition
Condition: No the accounts are audited b with his retu
10CCB duly s
Compliance:
return of inco with return of with.
6.4 Based on the Assessee
ITA plan of the government authorities are a 1 for your goodself ready reference.
ss of undertaking is E-17/3, E17-4, MID arashtra 401506. ssee is not being set-up in special econ ses wer in form the cooling power i.e.
(TR) is being captively consumed by ng units.
essee has stated claiming the deductio nd the captioned AY is not the initial a ere is no purchase of asset in the current A the section prescribes certain other condi s- he undertaking should not be formed r reconstruction of a business already in e
In the present case, the Assessee h ew undertakings which are indepen m each other. Hence this condition is fulfill is not formed by the transfer to a new b plant previously used for any other purpo
In the present case, the new plant and rchased by the Assessee and no plant or ed from existing business to new busine is also fulfilled.
o deduction is admissible under section 8
of the undertakings for which deduction by an accountant and the assessee furnis rn of income, the report of such audit i signed and verified by such accountant
The Assessee has claimed deduction u me and also filed audit report in Form 10
f income. Hence, the said condition is du n above and following the principle of c request your goodself to grant deductio
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attached as C, Tarapur, nomic zone
Tonnes of y the other on from the assessment
AY.
tions which by way of existence.
had started ndent and led.
business of ose.
machinery r machinery ess. Hence,
801A unless n is claimed shes, along in the Form u/s 80IA in 0CCB along uly complied consistency, n u/s 80IA of the Act i undertakings
6.2 It is not in dis under section 142(1
asserting its eligibilit on account of genera
However, there is a d filing of reply in res
20.09.2022. The asse before the Assessing
Submission generated fr
1.0 Anuh Ph drugs. The C
Cooling Towe
Cooling Powe
Refrigeration
Refrigeration
Power / electr
1.1 From peru
80IA is avai generation of power is eligi in Income-tax
1.2 Power ha energy or any work (as th electricity)." It synonymous mechanical, e
1.3 Reliance i
CIT-vs.- Tanfa
ITA in respect of profits and gains deriv engaged in generation of various power pute that the assessee, in res
1), furnished certain replies a ty for deduction under section ation of “cooling power” from th dispute between parties regardin sponse to notice u/s 142(1) of essee has claimed that following
Officer:
Annexure 8(ii) on claiming
801A deduction o rom Cooling Tower harma Limited (Company) is manufactur
Company has in Tarapur. Company ha er at plant which generates cooling pow er or Refrigeration Power is measured in (TR). As per the scientific formula
(TR) power which is equal to 3.51 Kil ricity.
usal of the above it could be seen that ded ilable in respect of profit from the b f "power". Thus, the TR which also in t ible for the section 801A deduction. The w
Act implies source of energy.
as been defined to mean "mechanical o y form of energy or force available for ap hat of gravitation, running water, win
It is also held that terms 'Power' and 'E and they can be in several form electrical, wind.
is placed on the decision of Apex Court in fac Industries Ltd (SLP No. 18537 of 200
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ved by an r.”
ponse to notice and documents
80IA of the Act he cooling tower.
ng submitting or f the Act dated g reply was filed on Power res of bulk as installed er. Further, n Tonnes of 1 Ton of lo Watts of duction u/s business of the form of word power or electrical pplication to nd, steam,
Energy' are ms, steam, n the case of 09) (copy of the decision i steam is also u/s 80-IA on deduction on taking consist
1.4 Reference case of Saf
1635/Mum/2
Apex Court d
Tribunal also in the defin
Following we allowing dedu i. Tribunal re
'Power' has n exclusion of understood in legislature ha the Act for g undertaking.
ii. Just like s form of powe known as R
Refrigeration the temperatu iii. The temp through the volumes, at a water such th and there is a then exits t temperature apparatus at In other word of water. Coo
Tonnes of R relationship w iv. It was als equal to 3.51
1.5 In view of the cooling tow
ITA is attached as Exhibit - A) wherein it wa form of power and assessee is entitled to the same. The rationale of eligibility of s steam and cooling power is similar and tent views on the same.
e is invited on Hon'ble Juri ictional Trib
Yeast Company Private Limited v. DCI
2015, Date of order 24-11-2017) wherein decision in the case of Tanfac Industr held that, power generating by Cooling ition of Power and eligible for 80IA re the important aspects highlighted by uction:
eferred to the CIT (A) observations tha not been defined to mean electrical po other forms of power and the term n its natural meaning. Tribunal further as clearly provided benefit of deduction u generation of any form of power genera steam, cooling power/Refrigeration powe er. The power generated by the Coolin
Refrigeration Power or Cooling Power.
Power, as the name suggests, is used ure of an object, whether solid, liquid or ga perature of the water is reduced by p apparatus, i.e. the 'Cooling Tower' in a temperature cooler than that of the in hat the particles of water are enveloped a transfer of heat from the water to the the chamber at a temperature highe at the point of entry and the water a temperature lower than its original te ds, air acts as the refrigerant to cool the t oling Power or Refrigeration Power is m
Refrigeration (TR). Further, electricity with the TR.
so held that one Ton of Refrigeration (TR
Kilo Watts of Power.
f the above, the power generated in form wer shall be eligible for 80IA deduction.
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as held that o deduction section 80IA
Courts are bunal in the IT (ITA No.
n relying on ries (supra)
Tower falls deduction.
Tribunal in at the term ower to the has to be stated that u/s 80-IA of ated by an er is also a ng Tower is Cooling or in reducing aseous.
passing air n sufficient ncoming hot d by the air air. The air er than its r exits the emperature.
temperature measured in has direct
R) which is m of TR from 1.6 Since 1
generated sha electricity, ma rationale has proposition, th undertaking recognised en
1.7 Based on deduction u/
derived by of various po
6.3 But the Assessi reply in his assessme record any evidence reply relied upon assessment unit.
observation, it is w submissions by the a Assessing Officer car ought to have been the case.
6.4 The section 80I percent deduction o engaged in business sub section (4) provi subsection refers maintenance of inf subsection refers t
ITA

TR = 3.51 Kilo Watts of Power. Thus all be converted into KWH and applying arket value of TR generated is arrived s been allowed by courts. On the a he company has maintained seperate rec based on which it has also obtained g nergy auditor report.
n above, the assessee request your goods s 80IA of the Act in respect of profits an undertakings engaged in ower.”
ing Officer did not make any r ent order. The assessee also cou of acknowledgement showing was electronically filed befor
Further, without prejudice well settled that the mere fi assessee does not ipso facto es rried out the inquiry mandated carried out in the facts and ci
IA(1) of the Act prescribe eligib f profit and gains derived by s referred in sub- section (4) of t ides a list of businesses. The c to business of developme frastructure facility. The clau o business of providing tele
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s, total TR g the rate of d. The said above legal cords of the government self to grant and gains generation reference of said uld not place on that the above re the faceless to the above iling of written stablish that the d by law, which ircumstances of ility of hundred an undertaking the section. The clause (i) of the ent, operation, use (ii) of the ecommunication services. The claus maintenance of Indu
(iv) refers to genera
This is the clause wh of deduction u/s understanding, we fe
(iv) an 85[undertakin
(a) is set up distributi during th ending on (b) starts tra transmiss beginning day of Ma
Provided
87[underta relation to lines for t
88[(c) undertak existing n during th ending on Explanati renovatio and mac lines by a machiner
6.5 On a plain re business of generatio sense of electricity, through a network.
ITA se (iii) refers to developmen ustrial Park, Special Economic z tion, transmission, distribution hich has been invoked by the as 80IA of the Act.
Therefo eel it appropriate to reproduced a ng] which,- in any part of India for the generation on of power if it begins to generate p he period beginning on the 1st day o n the 31st day of March,86[2017]; ansmission or distribution by laying sion or distribution lines at any time g on the 1st day of April, 1999 and e arch,86[2017]:
d that the deduction under this aking] under sub-clause (b) shall b o the profits derived from laying of su transmission or distribution; kes 89 substantial renovation and mo network of transmission or distributio he period beginning on the 1st day o n the 31st day of March, 90[2017].
ion.-For the purposes of this sub-cl on and modernisation” means an inc chinery in the network of transmiss at least fifty per cent of the book value ry as on the 1st day of April, 2004;]
ading of entire clause togeth on or distribution of “power” in t which can be transmitted a In the case, the assessee does
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nt, operation , zone. The clause n etc of power.
ssessee for claim ore, for better as under:
n or generation and power at any time of April, 1993 and a network of new e during the period ending on the 31st s section to an be allowed only in uch network of new odernisation of the n lines at any time of April, 2004 and lause, “substantial crease in the plant sion or distribution e of such plant and her, it refers to the conventional and distributed s not fall under the plain and simple the assessee is claim cooling tower as eq deduction. The claim in ‘tonnes’ of refriger terms of section 80IA detailed and pointed have also examined tower as separate un scenario, it was the o carry out the inquirie of power as he is no could have issued com of the Act to any sc referred the matter refrigeration process conduct such inquiry revision under Expla accordingly, under th section 263 of the erroneous in so far a the extent of the issu cooling tower. We, th that the assessment
ITA e definition of the power gener ming generation of the cooling quivalent to power generation m of the assessee that cooling p ration is synonymous with powe
A, raised a substantial issue w d inquiry by the Assessing Off that claim of assessee as refrig ndertaking having GST number obligatory on the part of the Ass es to satisfy condition of busine t merely adjudicator but also in mmission invoking authority un cientific organisation like IIT, B r whether any power is gen s employed by the assessee.
y renders the order of assessme anation 2(a) to section 263 of he provisions of clause (a) of E
Act, the assessment order is as prejudicial to the interest of ue of deduction claimed u/s 80
herefore, uphold the finding of th t order was deemed to erroneo
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ration. Instead, g by way of the n and claiming power measured er generation in which required a ficer. He should geration cooling r etc. In such a essing Officer to ess of generation nvestigator. He nder section 131
Bombay etc and nerated in the The failure to nt vulnerable to f the Act Thus,
Explanation 2 to deemed to be f the Revenue to 0IA in respect of he learned PCIT ous in so far as prejudicial to the in deduction allowed un
6.6 In so far as sec concerned, the Asse
20.09.2022 whereas claimed u/s 80G on 2 to section 263 of detailed reply which ready reference said r
“1.0 Claim o donations m
Act):
1.1 During th
30,23,800/- t
Account. The for CSR and computation o as per the pr deduction of trusts or orga
1.2 In this r report and an u/s 80G. Fu donation is b
CSR and dona
1.3 In this re which is plac which is repro
Income from computed.
29. The incom accordance w
ITA nterests of the Revenue with nder section 80IA.
cond issue of deduction u/s 80
essing officer had issued a q he specifically asked as why
CSR activities in contravention f the Act be disallowed. The a is available on Paper Book pag reply is reproduced as under:
of deduction on account of CSR acti made u/s 80G of the Income Tax Act, he captioned year, the assessee has d towards eligible CSR & donations in Pr said amount was already disallowed th donations u/s 37(1) of the Act by the a of income. Thereafter under separate chap rovisions of section 80G, the assessee h
Rs. 18,29,265/- being the payment m anization which are eligible for the deducti regard, the assessee has submitted the nnual report certifying the said amount of urther, the list of eligible trust to whom eing made alongwith copies of the receip ation is made is attached as Annexure 2. egard, reference is made to Section 29
ced in Chapter IV - Computation of Busin oduce as under:
profits and gains of business or profe me referred to in section 28 shall be co with the provisions contained in sections 3
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respect to the 0G of the Act is query letter on y the deduction n of Explanation assessee filed a ge 56 to 61. For ivities and 1961 (the debited Rs.
rofit & Loss he expenses assessee in pter i.e. VIA has claimed made to the ion.
e tax audit of deduction m CSR and pt to whom of the Act ness Income ession, how omputed in 30 to 43D.

to 31.03.2017
are in the bus power. On go
Act, it is clea by way of de the enterpris distribution of 5.2 On perusa the assessee generates coo utilized by th processes. T assessee is n and not tran actual genera water and no that the facts the facts of T the Hon'ble S power genera are also disti
Limited deci manufacturin from that of accepted the appeal has b which is pend for claim of d deduction of IA(4) of the A Officer while p
8.3 We have caref examined the recor interpretation of the section 80-IA of the subscribe to the cons
8.4 The term “powe parlance, been unde
ITA

5 7 . Electricity therefore propo profits and gain
India for either five-year tax ho
5 8 . The five-y section 80- IA o these units will for the remainin
8.14 Thus, the refere with electrical power
8.15 We may furthe
Mercantile Insurance
1969 SC 221, the Su in a statute must be and not in a wide
Commissioner of Inco
[1999] 237 ITR 174
with interpreting "p argument that a he stating that it is a na
"The word juxtaposition
ITA the intent of Parliament. In this e part of budget speech of 199
27th February, 1993, as under is a critical input for the future growth ose to introduce a five-year tax holiday ns of new industrial undertakings set generation or generation and distribu oliday will begin from the year of gene ear tax holiday, in both these cases, w of the Income-tax Act. At the end of the l be entitled to the existing deduction u ng period.
ence of power in budget speech only.
r refer that in the case of No e Co. v. Life Insurance Corporati upreme Court held that the me e understood in the context in w or universal sense. In the lan ome Tax v. Srivenkateswara Ha
(SC):, the Hon’ble Supreme Co produces articles or things."
en "produces" eggs in the in atural process. The Court held:
'production'
or 'produce'
w n with the word 'manufacture' ta
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s reference , it is 93-94 of Hon’ble r:
h of our economy. I y in respect of up anywhere in ution of power. The eration of power.
will be part of e five-year period, under section 80-IA h was in relation orth British and ion of India, AIR aning of a word which it is used ndmark case of atcheries (P) Ltd.
ourt was tasked
It rejected the ndustrial sense, when used in akes in bringing into existence amount to m intermediate in the course
8.16 The key takeaw commercial and indu intermediate step in or "generate" a fina merely facilitates the 8.17 The Hon’ble Su
Budharaja and Co.
"industrial undertak engaged in the busin analogy, an underta power" must be in manufacturer is in t cooling tower is a too power generation.
8.18 We may summ
"generation of power through the lens o legislative purpose, power. The Assessee
ITA e new goods by a process which manufacture. It also takes in all products and residual product of manufacture of goods."
way is that the term must be un ustrial context. A cooling tower's a manufacturing process; it doe al, marketable commodity cal main production by regulating upreme Court in the case of [1993] 204 ITR 412 (SC), wh king," emphasized that the e ness of manufacturing or produc aking claiming deduction for the business of generating po the business of manufacturing ol for this business, not a separ marise our observation above r" as used in Section 80-IA, w f scientific accuracy, statutor can only mean the generatio e's claim is based on the sem
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h may or may not the by-products, ts which emerge nderstood in its s operation is an es not "produce"
lled "power." It temperature.
f CIT v. N.C.
hile interpreting entity must be cing articles. By "generation of ower. A pharma medicines. The rate business of that the term when interpreted ry context, and on of electrical mantic artifice of renaming a heat reje
A cooling tower is a ancillary to manufac that can be transmit contemplated by the 8.19 Accordingly, the section 80-IA rests u such contention wer amount to a “power-g with both science and 8.20 Having observe required to conclus assessee’s eligibility the juri ictional in our observations a Assessing Officer fa which he was duty-
Explanation 2 to sect is deemed to be erron the Revenue. Thus, a assessment order sta refrain from recordi eligibility of the clai
ITA ection process as "generation of a net consumer of electricity, cturing, and its output is not a tted or distributed in the infras
Act.
e very foundation of the assesse upon a scientific and legal misa re to be accepted, every air-con generating” device, a conclusion d common sense.
ed above, in the present cas sively adjudicate on the legal y under section 80-IA. Our fi nfirmity of the assessment o above are rendered merely a iled to conduct any inquiry i
-bound to examine. In terms tion 263, an order passed witho neous in so far as prejudicial to as far as deduction u/s 80IA is ands vitiated on this ground alon ing a conclusive finding on t m under section 80-IA. Groun
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f cooling power."
its function is a form of power structural sense ee’s claim under apprehension. If nditioner would n wholly at odds se, we are not l merits of the inding rests on order itself and academic. The into this claim, of clause (a) of out such inquiry o the interests of s concerned, the ne. We therefore the substantive nd No. 3 of the assessee’s appeal is dismissed as infructu
9. As far as groun respect of ratios laid in agreement with th
Hon’ble Courts and followed. Accordingly is allowed to that exte
10. In summation, learned PCIT is uph section 80-IA of the A under section 80G, w
Assessing Officer a established. To that e
11. In the result, th
Order pronoun (SANDEEP G
JUDICIAL M
Mumbai;
Dated: 30/09/2025
Rahul Sharma, Sr. P.S.

ITA s, therefore, rendered academ uous.
nd No. 4 of the appeal is concer down in various decisions, we he ratios laid down in above d d to the extent applicable, w y, the ground No. 4 of the appeal ent.
the order passed under secti held to the extent of deduction
Act. However, in so far as it relat we find that due inquiry was ca nd no error prejudicial to t extent, the revisional order is se he appeal of the assessee is partl ced in the open Court on 30/0
/-
S
GOSAIN)
(OM PRAK
MEMBER
ACCOUNTA
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mic and stands rned which is in are respectfully decisions of the e have already l of the assessee ion 263 by the n claimed under tes to deduction arried out by the the Revenue is et aside.
ly allowed.
09/2025. KASH KANT)
ANT MEMBER

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ITA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

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R, gistrar) umbai