ACIT, CIRCLE-2(1), HYDERABAD vs. HINDUJA NATIONAL POWER CORPORATION LIMITED, HYDERABAD

ITA 235/HYD/2023Status: DisposedITAT Hyderabad08 January 2025AY 2016-17Bench: SHRI LALIET KUMAR, HON’BLE (Judicial Member), SHRI G. MANJUNATHA, HON’BLE (Accountant Member)44 pages
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What did the Tribunal hold?

The Tribunal held that the specific exclusion of power generation companies from the benefits of Sections 32AC and 32AD, as indicated by the legislative intent and wording, means these benefits cannot be extended to them. The Tribunal found that previous judicial pronouncements relied upon by the assessee did not directly interpret these specific sections in the present context.

What were the facts?

The assessee, a power generation company, claimed investment allowance and additional depreciation under Sections 32AC, 32AD, and 32(1)(iia) of the Income Tax Act. The Assessing Officer disallowed these claims, stating that power generation is not considered manufacturing or production of an article or thing for the purpose of these sections. The CIT(A) initially allowed the claims, relying on judicial pronouncements that electricity generation is akin to manufacturing.

What were the issues?

Whether power generation constitutes 'manufacture or production of any article or thing' for the purpose of claiming investment allowance and additional depreciation under Sections 32AC, 32AD, and 32(1)(iia) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 32AC,Section 32AD,Section 32(1)(iia)

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD

Before: SHRI LALIET KUMAR, HON’BLE & SHRI G. MANJUNATHA, HON’BLE

For Respondent: Shri B. Bala Krishna, CIT-DR
Hearing: 24/12/2024

PER LALIET KUMAR, J.M :

The appeal filed by the Revenue is directed against the order of Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), Delhi dt. 23.01.2023 (hereinafter referred to as “the ld.CIT(A)”) invoking proceedings under section 143(3) of the Income Tax Act, 1961 (in short, “the Act”) relating to A.Y. 2016-17. 2 Hinduja National Power Corporation Ltd.

2.

The Revenue has raised the following grounds :

“1. On the facts and circumstances of the case and in law, the

The order continues below.

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