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Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD
Pआयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ ‘डी’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ D ” BENCH, AHMEDABAD सव�ी एन.के. �ब�लैया, लेखा सद�य एवं महावीर �साद, �या�यक सद�य के सम� । BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER And SHRI MAHAVIR PRASAD, JUDICIAL MEMBER आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./ ITA No. 276/Ahd/2015 अपील (�नधा�रण वष� / Assessment Year : 2011-12) M/s. Banco Aluminium Ltd. DCIT, Bil, Near Bhaili Railway Station, Vs Circle 1(1), Padra Road, Baroda - 390007 Baroda-391410 आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./ ITA No. 282/Ahd/2015 अपील िनधा�रण िनधा�रण वष� िनधा�रण िनधा�रण वष� वष�/ Assessment Year : 2011-12 वष� DCIT, M/s. Banco Aluminium Ltd. Circle 1(1), Vs Vadodara. Vadodara- 390007 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAACB 8629 B .. (अपीलाथ� /Appellant) (��यथ� / Respondent) Assessee by : Shri Sanket Bhakshi, A.R. Revenue by : Shri V.K. Singh, Sr. D.R. 17/08/2017 सुनवाई क� तार�ख / Date of Hearing घोषणा क� तार�ख /Date of Pronouncement 29/09/2017 आदेश / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : These are two appeals by the assessee and department against the separate orders of the Commissioner of Income Tax(Appeals)-1, Vadodara, identically dated 28/11/2014 for the Assessment Year (AY) 2011-12.
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 2 - 2. First we take up the Grounds of appeal in ITA No.276/Ahd/2015 for Asst. Year 2011-12: i. The learned Commissioner of Income Tax (Appeals)-I, Vadodara ["the CIT(A)"] erred in fact and in law in confirming the action of the Deputy Commissioner of Income tax, Circle -1(1), Baroda ("the AO") in not allowing deduction u/s.80IA(4) of the Income Tax Act, 1961 ("the Act") amounting to Rs.41,22,107/- on the Captive Power Generation Plant ("COGEN"). ii. The learned CIT(A) erred in fact and in law in confirming the action of the AO in re-computing the profits of the undertakings by adjusting the sales value of the power produced and supplied by the undertakings. iii. The learned CIT(A) erred in fact and in law in confirming the action of the AO in disallowing the claim on the ground that profit of COGEN units is unreasonable and on a higher side. iv. The learned CIT(A) erred in fact and in law in confirming the action of AO in charging interest u/s.234D of the Act. v. The learned CIT(A) erred in fact and in law in confirming the action of the AO in initiating penalty proceeding u/s 271(l)(c) of the Act. 3. The relevant facts as culled out from the materials on record are as under:- In this case, assessee company is engaged in the business of Manufacture of aluminium Extruded Section and carrying out job work for others.
3.2 Assessee, in its computation of income claimed deduction u/s.80IA(A) of Rs.41,22,107/- in respect of Captive Power Corporation Plant (750KV). During the course of assessment proceedings the assessee was asked to substantiate its claim for deduction u/s.80IA(4) in respect of
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 3 - Captive Power Plant. The assessee was asked to furnish the reasons with working of price of unit to determining the claim of deduction, and was asked to show cause vide order sheet entry dated 27/01/2014 as to why the saleable market price should not be taken in determining the notional sale value. The assessee was asked to substantiate genuineness of unthinkable low administrate and other expenses claimed to achieve profit for tax deduction.
3.3 Assessee submitted his reply, which is reproduced as under: A.1 Your office may kindly note that we have fulfilled the above conditions as discuss hereafter. a. The gross total income of the undertaking includes any profits and gains derived from the generation or generation and distribution of power b. It begins to generate power at any time during the period beginning on 01/04/1993 to 31/03/2010. c. The undertaking is not farmed by splitting up or reconstruction of business already in existence subject to certain exceptions. d. It is not formed by the transfer to a new business of machinery or plant previously used for any purpose subject to certain exceptions. e. The Consideration of the transfer of goods or services held for the purpose of the above eligible business should be recorded in the accounts of eligible business at the market value of such goods or services on that date as provided in section 80IA(8) of IT Act. f. The Assessee should get his books of accounts audited and submit the report in Form No. 10CCB. Your office may kindly note that we have fulfilled the above conditions as discuss hereafter;
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 4 - a. The gross total income of the company includes profits and gains derived from the undertakings viz. captive Power Generating Plant h. The undertakings is separate undertaking engaged in the business of generation of Electricity being eligible business to claim deduction u/s 80IA of the Act. c. The undertaking has obtained approval from the prescribed authority as per Rule 47A of Indian Electricity Rules, 1956 to engage in the business of generation of power for Captive Consumption. Copy of approval letter is attached marked as Annexure-10. d. The undertakings are not formed by splitting up or reconstruction of business already in existence. The undertakings are not formed by the transfer of machinery or plant previously used for any purpose. e. The assessee got audited its books of account in respect of above undertakings by obtaining audit report in the prescribed form No.10CCB dated. The assessee has filed audited books of account along with above report obtained from Chartered Accountants certifying the correctness of claim of deduction. For your kind reference audited accounts of the said undertakings along with notes to accounts and report in Form No.10CCB is enclosed marked as Annexure – 11. 4. Based upon the above we submit that the assessee has fulfilled all the necessary and applicable conditions for claim of deduction u/s.80IA and we therefore request your office to allow the said claim. 5. Vide Para No.22(i) your office has asked us to submit whether the sale or profit of captive power plant are included in the gross total income or not before deduction U/s.80-IA(4) of the Act. In this respect we submit that the gross total income includes the profit of two Captive Power Generation units as discussed in the above paras. Your office may note that all these units are engaged in the business of generation of electricity. Such electricity is consumed by the other unit of the assesses. Each of such units is separate undertaking under the Act The assesses has maintained separate books of account of each of such undertakings and the same is audited under the Act. You would kindly observe that the sales of captive power plants for captive consumption, becomes the purchase of the unit which consumes it and accordingly the gross total income of the assessee includes profit derived by such undertakings, it is most respectfully submitted that when on application of Section.80IA(8), when the price of the goods or services used captively is adjusted for making it commensurate with the market price
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 5 - thereof, it would have an impact of increasing [when market price is more than the price at which these goods or services are transferred] or reducing [when market price is less than the price at which these goods or services are transferred] the profits of the eligible undertaking. While it increases the profits of the eligible unit in a given case, it correspondingly will reduce the profits of the unit consuming the goods or services, giving the same grass total income and therefore we submit that the gross total income does include the profits of the captive power plants including the profits recomputed by substituting the price of the power consumed captively by other units of the company. 6. Vide Para No. 22(ii) your kind office has also asked to provide details of price of units determining the claim of deduction and details of sales of power units. In respect of the same we submit that the selling price of the power unit has been computed as under: i. Electricity Units generated and transferred by Captive Power Plants to other undertakings of the company have been valued at market price, being landed price of the power procured by the Company from Dakshin Gujarat Vij Company Limited (DGVCL). Computation of the same is attached as Aniiexure-12. ii. The above computation of price is as per the meaning of "market value" as defined in Explanation to Section 80 IA(8) of the Act. iii. We submit to your kind office that in our case we have valued the units transferred at the price at which we have purchased the electricity from DGVCL. Here we invite your kind attention to the decision of ITAT Delhi Bench in case of Addl. C1T vs. Jindalsteel and Power Ltd. (16 SOT 509). In this case, the Tribunal has held that the market value shall be price at which the assesses purchases electricity from the electricity board and not the one which is fixed by the legislative mandate. In our case we have applied the provision of section 801A(8) and accordingly computed the selling price.
Vide Para No.27(iii) your office has asked us why the salable market price should not be taken in our case for determining the claim of deduction U/s.80IA of the Act. In this respect, we first invite your kind attention to Section 80IA(8) which prescribes the concept of "market price" for transfer of goods or services from eligible business to other businesses of the assessee. As per Section 801A(8) of the Act "Where any goods or services held for the purposes of the eligible business are transferred to any other business carried on by the
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 6 - assessee, or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such goods or services as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as on that date,”
As per Explanation to Section 801A(8) "market value in relation to any goods or service, means the price that such goods or services would ordinarily fetch in the open market" The Company procures the electricity from two alternative sources. One from Electricity Supply Company at which the electricity is supplied by them to the Company's manufacturing units. The same manufacturing units also procures electricity from the captive power plants. Therefore, we have used the purchase price of the power purchased from an unrelated party (electricity supply company) is considered as the market value of such goods for computing the profits of the undertaking. The same is therefore saleable market price under the Act.
Your office may note that the rate at which GUVNL purchases electricity from power generating units cannot be considered as market value because the said price is influenced by the decision of government authorities. Since GUVNL is supplying electricity to all customers in Gujarat, we have considered the same as market value for the purpose of computing the deduction u/s.80IA of the Act. The rate at which GUVNL procured electricity cannot be considered as market value of electricity to the assessee since the same is influenced by the various conditions of agreement entered into by various power manufacturing companies and GUVNL and therefore ceases to be the price in the "open market".
To support the above contention we also relied upon following decisions: a. ThiruAarron Sugars Limited 2271TR 432 (SC) b. West Coast Paper Mills Ltd. Vs.JCIT [2006] 100 TT] 433 (Bom) c. Assam Carbon Products Ltd. Vs. ACIT[2006] 100 TT] 224 (Cat) d) Jindal Steel and Power Ltd. Vs. Addl. C1T[2006] 10 SOT 106 (Del)
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 7 - 11. The ratio of all the above judgment is summarized as under: i. Price sold to Government or other authorities under compulsion cannot be considered as the "market value" as these cannot be termed as price in open market. Therefore, the rate at which Power is sold to the State Electricity Authority (SEA) cannot be considered to be the "market value" ii. it would be more relevant to consider the rate at which the Power is supplied to the consumers placed in similar circumstances by the SEA; iii. For this purpose what is to be considered is the landed cost of the Power supplied including all the incidental costs and taxes (net of taxes for which the rebate or set of is available); 12. We further submit that it is essential that the comparison has to be for the transaction between the seller [power producer/dealer] and the consumer of the power and not that of producer and the dealer / distributor. In the second scenario the dealer would then be incurring the entire cost of transmission, distribution and attendant losses. Whereas when the sale is made to ultimate consumer, all the costs so incurred are included in the selling price and therefore is actually the representative price for comparison purposes. 13. At the end we invite your kind attention to recent decision of Hon'ble ITAT, Ahmedabad in the case of Alembic Ltd. Vs. ACIT, Circle- 1(1), Vadodara ITA No.3594/Ahd./2007 dated 6th June 2009 (Now referred as "the order"). Vide the order ITAT has decided the identical issue against the order passed by your office and confirmed by CIT (A) in the case of Alembic Ltd in A.Y.2003-04 in respect of the above issue. In the order, Hon'ble ITAT has discussed the above issue in detail and also considered the applicability of provision of Section 80IA(10) for computing profit of captive power plant by adoption of rate of GUVNL as market rate for the purpose of computing deduction u/s.80IA (Para No.26 to 32 of the order). The Hon'ble ITAT has considered all the above reported decision of Tribunals and given the judgment in favour of the Appellant (Alembic Ltd.), We specifically invite your kind attention to concluding Para no. 32 of the order. Vide the said para ITAT has allowed deduction u/s.80IA in respect of captive power plant by taking the price of electricity supplied by GEB (Now GUVNL) to assessee as a consumer as market value for the purpose of computation of deduction U/S.80IA(8} of the Act.
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 8 - 14. Based upon the above discussion and aforesaid reported decision having direct applicability over the case of the assessee, we most respectfully submit that the rate at which GUVNL purchases electricity from power generating companies should not be taken as market rate for the purpose of computing deduction u/s.80IA in respect of Captive Power Plant of the assessee.
3.4 The submission of the assessee were considered by the learned AO but not found to be accepted and deduction u/s.80IA(4) to be tune of Rs.41,22,107/- were disallowed.
Against the said order, assessee preferred first statutory appeal before the learned CIT(A) who partly allowed the appeal of the assessee.
We have gone through the relevant record and impugned order. Learned AR cited an order of our own Co-ordinate Bench in ITA No.2313/Ahd/2014 for Asst. Year 2009-10, in which Hon’ble Bench held that is reproduced as under: 47. Ground No.2(i) concerns the claim of deduction u/s.80IA(4) towards captive power plant. Assessee claimed deduction amounting to Rs.40,78,793/- u/s.80IA on this account which was denied by the Assessing Officer. The commissioner of Income Tax(A), however, granted relief to the assessee. Revenue is in appeal against the aforesaid action of the Commissioner of Income Tax(A). 48. As pointed out on behalf of the assessee, the issue is covered in favour of the assessee in its own case for Asst. Year 2007-08 in ITA No.1446/Ahd/2010. The relevant portion of the order of ITAT dealing with the issue reads as under:- 7. Ground No.3 is against the disallowance of claim of deduction u/s.80IA(4)(iv) of the Act of Rs.3,14,275/-. The Sr.DR supported the order of the AO and submitted that the ld.CIT(A) was not justified in deleting the addition.
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 9 - 7.1. On the contrary, ld. counsel for the assessee submitted that the issue has already been decided by the Tribunal (ITAT "D" Bench Ahmedabad) in favour of assessee in the case of group- concern M/s.Aluminium Ltd.- Revenue's appeal for AY 2007-08 in ITA No.1106/Ahd/2010 dated 25/10/2012. He drew our attention towards page Nos.175 to 180 of the paper-book. 8. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that in this case also, the ld.CIT(A) in para-6 of his order has given an elaborate finding and followed the decision(s) of the Coordinate Bench (ITAT Mumbai Bench) rendered in case of West Coast Paper Mills vs. ACIT (103 ITD 19) and ITAT Chennai Bench rendered in the case of Mohan Breweries & Distilleries Ltd. vs. ACIT (114 TTJ 532) and other case-laws. Therefore, we do not any infirmity in the finding of the ld.CIT(A), same is hereby upheld. 49. In view of the decision of the Co-ordinate Bench as noted above and also the issue being pari materia with ground no.3(i) in ITA No.1411/Ahd/2014 (supra), we do not find any merit in the grievance of the Revenue on this score. 6. In view of the above observations, we allow deduction u/s.80IA(4) of the Income Tax Act, 1961 amounting to Rs.41,22,107/- on the Captive Power Generation Plant (“COGEN”).
So far Ground pertaining to charging interest u/s.234D of the Act is concerned. Same is consequential and need not to be adjudicated.
So far Ground pertaining to initiating penalty proceedings u/s.271(1)(c) of the Act is concerned. Same is premature and does not require any adjudication.
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 10 - 9. Respectfully following the decision of our Co-ordinate Bench, we allow the appeal of the assessee.
Now we take up the Grounds of the department in ITA No.282/Ahd/2015 for Asst. Year 2011-12. i. (a) On the facts and in the circumstances of the case and in law, the ld.CIT (A) erred in treating the expenditure of Rs.92,15,447/- on dies and tools as revenue expenditure instead of capital expenditure without appreciating that these parts of the machinery in view of the nature of business of the assessee wherein the assessee has to keep the dies for certain specification and design and , they do not lose its identity after utilization. i. (b) The ld.CIT(A) erred in deleting the addition on the ground that these are having short life without appreciating that useful life of the assets may be criteria for prescribing the rate of depreciation, but it cannot be regarded to be criteria for deciding whether the expenditure on the asset is revenue or capital nature. ii. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting the addition of Rs.25,41,611/- on consumption of spares to machinery holding this to be revenue expenditure without appreciating the fact that the same was incurred for prolonging the life of machinery and having enduring benefit iii. a. On the facts and in the circumstances of the case and in law, Ld. CIT(Appeals) has erred in holding that the assessee is eligible for deduction u/s.80IA(4)(iv) of the Act in respect of COGEN Units without appreciating that the assessee had captive power generation plant and therefore, the claim u/s.80 IA (4) of the Act was not allowable as held by the Hon'ble ITAT Bench-A, Chennai in the case of Chettinand Cement Corporation Ltd. in ITA No. 1026(Mds)/2005.
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 11 - 3(ii) On the facts and in the circumstances of the case and in law, Ld. CIT(Appeals) has erred in holding that earlier years losses of COGEN units are not required to be set off against income of the current year before allowing deduction u/s.80IA of the Act.
In this case, addition on account of capitalization out of revenue expenses: Capitalization out of Dies and Tools: On verification of details it is observed that an amount of Rs.218.53 lakhs has been claimed in the profit and loss account in the name of stores, dies and tools consumed during the year. The details of stores, Dies and Tools were called for an verified. Some of the items from tools & Dies as listed below with narration, which were claimed as revenue expenditure, is found to be of nature of capital expenditure.
Date Name of Voucher Description Amount Supplier Ref. 30/04/2010 Sandeep PU-184 STEEL BARS 387,310 Enterprises 31/05/2010 Sandeep PU-267 STEEL BARS 462,003 Enterprises 30/06/2010 Sagar Alloy PU-351 ALLOYS STEEL 111,320 & Metal FORGED BAR Industries 30/06/2010 Sagar Alloy PU-350 ALLOYS STEEL 118,320 & Metal FORGED BAR Industries 30/06/2010 Sagar Alloy PU-349 ALLOYS STEEL 238,201 & Metal FORGED BAR Industries 30/06/2010 Sagar Alloy PU-551 FORGED ROUND 299,888 & Metal STEEL BAR Industries 30/06/2010 Sandeep PU-519 STEEL BAR 475,450
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 12 - Enterprises 31/08/2010 Sagar Alloy PU-955 HOT DIE STEEL 231,156 & Metal 183MM Industries 31/08/2010 Sandeep PU- STEEL BAR 242MM 117,976 Enterprises 1030/JV2 62 31/08/2010 Sagar Alloy PU-956 HOT DIE STEEL 325,648 & Metal 284MM Industries 31/08/2010 Sagar Alloy PU-1020 HOT DIE STEEL 355,061 & Metal 284MM Industries 30/09/2010 Sandeep PU-1240 STEEL BAR 120,110 Enterprises 30/09/2010 Sagar Alloy PU-1272 ALLOYS STEEL 205,953 & Metal FORGED BAR Industries 30/09/2010 Sagar Alloy PU-1271 ALLOYS STEEL 592,266 & Metal FORGED BAR Industries 30/11/2010 Sandeep PU-1586 STEEL BAR 112,615 Enterprises 30/11/2010 Sandeep PU-1662 STEEL BAR 172,839 Enterprises 30/11/2010 Sagar Alloy PU-1633 ALLOYS STEEL 302,036 & Metal FORGED BAR Industries 30/11/2010 Sagar Alloy PU-1632 ALLOYS STEEL 379,341 & Metal FORGED BAR Industries 30/11/2010 Sandeep PU-1631 STEEL BAR 484,183 Enterprises 30/11/2010 Sandeep PU-1765 STEEL BAR 629,956 Enterprises 30/11/2010 Sandeep PU-1661 STEEL BAR 805,402 Enterprises 31/12/2010 Reform Tools PU-2088 EXTRUSION DIE-SECTION 129,200 NO.1002860/M, 1002862/M, & Dies 1001281/L, 1001281/M, 2002817/L, 1002854/M, 1002855/M, 1002859/M
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 13 - EXTRUSION DIE-SECTION 31/12/2010 Reform Tools PU-2086 139,000 NO.1002860/M, 1002862/M, & Dies 1001281/L, 1001281/M, 2002817/L, 1002854/M, 1002855/M, 1002859/M 31/12/2010 Sagar Alloy PU-2097 ALLOYS STEEL 467,984 & Metal FORGED BAR Industries 31/12/2010 Sagar Alloy PU-1900 ALLOYS STEEL 771,891 & Metal FORGED BAR Industries 31/01/2011 Sagar Alloy PU-2218 ALLOYS STEEL 510,458 & Metal FORGED BAR Industries EXTRUSION DIE-ART NO. 28/02/2011 Reform Tools PU-2812 128,000 2002856/M, 2002857/M, & Dies 2002858/M 31/03/2011 Foshan PU-2970 SOLID DIE AND 172,221 Nanhai HOLLOW DIE Grand Champion Trading Ltd. 31/03/2011 Sagar Alloy PU- ALLOYS STEEL 212,610 & Metal 2943/JV3 FORGED BAR Industries 8 31/03/2011 Sandeep PU-2928 STEEL BAR 783,588 Enterprises 1,02,42,245 Total
11.2 The assessee was therefore, asked vide questionnaire dated 24.09.2013 and also vide order sheet entry dated 27.01.2014 to show cause as to why the above mentioned items should not be treated as capital expenditure.
11.3 Assessee’s reply was that we have debited stores, tools and dies consumed of Rs.2,18,53,523/- to the Profit & Loss account. The said expenses of the company. They are intended to the benefit the current
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 14 - expenditure only. These expenses are charged against the operation of the company and therefore we have treated the same as revenue expenditure.
11.4 Assessee further stated that we inform your kind office that the said issue raised by your office in earlier assessment year 2009-10 and had made addition with respect to dies and tools by considering it as capital in nature. However, the CIT(A) has deleted the addition made in earlier assessment year 2009-10 vide his order dated 23/08/2012 by considering it as revenue in nature. And on the basis of the same assessee has correctly claimed the expenses of dies and tools as revenue in nature.
We have gone through the relevant record and impugned order. So far Ground No.1 has already been decided in favour of the assessee in ITA No.1411/Ahd/2014 For A.Y.2010-11. Therefore, we dismiss this Ground of department.
So far Ground No.2 regarding deleting the addition of Rs.25,41,611/- on consumption of spares to machinery holding is concerned. Identical issue was taken by the department in ITA No.1411/Ahd/2014 for A.Y.2010-11, in which Co-ordinate Bench decided this issue against the department as follows:
Ground No.2 concerns the disallowance of Rs.48,51,957/- towards consumption of machinery spares which were treated by the Assessing Officer as capital expenditure. Commissioner of income Tax(A) granted relief to the assessee holding the same to be allowable revenue expenditure. The Revenue is aggrieved by the aforesaid decision of Commissioner of Income Tax(A).
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 15 - 21. The ld. Departmental Representative sought to relly upon the order of Assessing Officer. 22. Ld. Authorised Representative on the other hand submitted that the assessee company is engaged in the business of manufacturing of Aluminium Extruded Sections. In order to maintain up-keep of the machinery, they require regular repairs and replacement of various worn out spares. It was submitted that the repairs and maintenance and replacement of spares have no enduring benefits and have been carried out in the normal course of business. No new assets have come into existence by the aforesaid consumption of spares. Ld. Authorised Representative relied upon the elaborate findings of the Commissioner of Income Tax(A) in this regard whereby the relief was granted to the assessee. 23. We notice that the Commissioner of Income Tax(A) has made thread-bare analysis of the factual aspects, concerning the issue with which we fully agree. The Commissioner of Income Tax(A) observed in nutshell that there was no creation of any new asset which is capable of working independently. No enduring benefit has been derived by the assessee by such expenditure. We notice that the Commissioner of Income Tax(A) has found that the expenditure has been incurred to preserve and to maintain an already existing assets. On these broad facts, the Commissioner of Income Tax(A) concluded that the expenditure incurred by the assessee are in the nature of current repair allowable as revenue expenditure. We find merit in the rationale adopted by the Commissioner of Income Tax(A). Therefore, we decline to interfere with such findings of Commissioner of Income Tax(A). 24. Consequently ground no.2 of Revenue's appeal is dismissed.”
13.2 So far Ground No.3 is concerned that CIT(A) has erred in holding that the assessee is eligible for deduction u/s.80IA(4)(iv) of the Act in respect of COGEN Units. We have already decided this Ground in favour of the assessee in connected Appeal No.276/Ahd/2015 for Asst. Year 2011-12. Therefore we dismiss this Ground of department. Therefore, appeal of the department is dismissed.
ITA Nos.276 & 282/Ahd/2015 Asst.Year – 2011-12. - 16 -
In the result, appeal filed by the assessee is allowed and filed by the department is dismissed. This Order pronounced in Open Court on 29/09/2017
Sd/- Sd/- एन.के. �ब�लैया महावीर �साद (लेखा सद�य) (�या�यक सद�य) ( MAHAVIR PRASAD ) ( N.K. BILLAIYA ) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 29/09/2017 Priti Yadav, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-1, Vadodara. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad True Copy 1. Date of dictation 27/09/2017 (dictation-pad 8 pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member …28/09/2017 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S……. 7. Date on which the file goes to the Bench Clerk………………… 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………