Jay Chemical Industries Ltd., Ahmedabad V. The Dy.CIT.,Circle-2(1)(2), Ahmedabad

CO 41/AHD/2015

• Counselvise Citation: [2019] 129 COUNSELVISE.COM (IT) 9885 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 11-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIMESH VAYAWALA
• Keywords: Set aside
• Section: 80IA; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. JAY CHEMICAL INDUSTRIES LTD. JAY HOUSE, PANCHVATI CIRCLE, AMBAWADI, AHMEDABAD PAN: AAACJ7268J (APPELLANT) VS THE DCIT , CIRCLE - 2 ( 1 )(2 ) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI VINOD TANWANI , SR. D . R. ASSESSEE BY: SHRI NIMESH VAYAWALA , A.R. DATE OF HEARING : 21 - 10 - 2 019 DATE OF PRONOUNCEMENT : 26 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS CROSS OBJECTION FOR A.Y. 2011 - 12 ARI SES OUT OF ORDER OF THE ITAT, AHMEDABAD VIDE ITA NO. 305/AHD/2015 & OTHERS ORDER DATED 26 - 03 - 2019. 2. THE FACT IN BRIEF IS THAT THE APPEAL OF THE REVENUE VIDE ITA NO. 305/AH D/2015 PERTAININ G TO ASSESSMENT YEAR 2011 - 12 WAS ADJUDICATED BY THE ITAT ON 26 TH MARCH, 2019 AND A T P ARA 21 OF THE ORDER , IT I S STATED THAT CROSS OBJECTION NO. 41/AHD/2015 (IN I T A NO . 305 / A HD/20 15) A SS ESSMENT YEAR 2011 - 12 C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 2 ASSESSE E HAS NOT PRESSED ITS CROSS OBJECTION VIDE CO NO. 41/AHD/2015 PERTAINING TO ASSESSMENT YEAR 2011 - 12, THEREF O RE, THE SAME STANDS DISMISSED. SUBSEQUENTLY, THE ASSESSEE FILED MISCELLANEOUS APPLICATION VIDE NO. 185/AHD2019 STATING THE FINDING OF THE ITAT THAT CROSS OBJECTION WAS NO T PRESSED WAS A MISTAKE AND CONTENDED THAT C.O. SHOULD BE ADJUDICATED ON MERIT. THE MISCELLANEOUS APPLICATION WAS ALLOWED VIDE ORDER D A TED 07/08/2019 TO ADJUDICATE THE ABOVE REFERRED CROSS OBJECTION ON MERIT. THE GROUNDS OF CROSS OBJECTION FILED BY THE ASSESSEE IS REPRODUCED AS UNDER: - 1. THE LOWER AUTHORITIES OUGHT TO HAVE FOLLOWED TH E DECISIONS OF VARIOUS BENCHES OF HON BLE ITAT INCLUDING THE DECISION IN 52 TAXMANN.COM 268 AND HAVE HELD THAT STEAM IN ANY FORM IS POWER AND THE PROFIT FROM THE SAME IS ELIGIBLE FOR DEDUCTION VIDE SECTION 80IA THE LOWER AUTHORITIES MAY BE DIRECTED TO COM PUTE THE DEDUCTION VIDE SECTION 80 IA ACCORDINGLY AFTER CONSIDERING THAT AY 11/12 BEING THE IONITIAL ASSESSMENRT YEAR AS HELD BY IRD CITA THE BROUGHT FORWARD LOSSES WHICCH ARE ALREADY ABSORBED AGAINST OTHER INCOME ARE NOT TO BE DEDUCTED FOR COMPUTING THE R ELIEF VIDE SECTION 80IA ,THE FINDING GIVEN ON THAT ASPECT BY LEARNED CITA BEING CORRECT 2. 3. 4. ETC. 3 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEDUCTION OF RS. 32,51,080/ - U/S. 80 IA (4 ) OF THE ACT FOR THE FIRST TIME ON ACCOUNT OF OPERATION OF CAPTIVE POWER PLANT. THE ASSESSEE HAS SHOWN INCOME FROM SALE OF POWER OF RS. 1,23,10,500/ - AND SALE OF VAPOUR OF RS. 6,59,77,170/ - . THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO EXPLAI N WHY T HE DEDUCTION U/S. 80IA(4 ) SHOULD NOT BE DISALLOWED SINCE THE SAME IS CLAIMED ON VAPOUR INCOME OF RS. 6,59,77,170/ - AND VAPOUR DOES NOT FALL WITHIN THE MEANING OF POWER. THE ASSESSEE EXPLAINED THAT STEAM IS ALSO A FORM OF POWER AND DEDUCTIO N IS ALSO AVAILA BLE U/S. 80IA(4 ). IT HAS ALSO PLACED RELIANCE ON THE DECISION OF CIT(A) FOR ASSESSMENT YEAR 2007 - 08 ON THE SIMILAR ISSUE. THE ASSESSING OFFICER HAS NOT AGREED WITH THE ASSESSEE AND STATED THAT STEAM WAS NOT GENERATION OF POWER AND PROFIT WAS C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 3 NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING BECAUSE THE DEDUCTION U/S. 80IA(4 ) WAS MEANT FOR THE GENERATION AND DISTRIBUTION OF POWER. THE ASSESSING OFFICER HAS REFERRED THE DECISION OF ITAT AHMEDABAD IN THE CASE OF M/S N.R. AGRICULTURAL INDUSTRIAL LTD. VS. DCIT DATE D 26 TH JULY, 2013 WHEREIN IT IS HELD THAT STEAM IS NOT POWER AND NOT ELI GIBLE FOR DEDUCTION U/S. 80IA(4 ) OF THE ACT. THE ASSESSING OFFICER HAS ALSO REFERRED THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF PANDIAN CHEMICAL LTD. VS. CIT (2003) 262 ITR 278 WHEREIN IT IS HELD THAT SUCH BUSINESS PROFIT THAT HAS DIRECT NEXUS TO THE ESSENTIAL BUSINESS ACTIVITY CAN QUALIFY FOR DEDUCTION. THE ASSESSING OFFICER HAS FURTHER REFERRED THE DECISION OF THE SUPREME COURT IN THE CASE OF CAMBAY ELECTRONIC SUPPLY IND USTRIAL COMPANY LTD. VS. CIT (1978) 1133 ITR 84 WHEREIN IT IS HELD THAT EXPRESSION ATTRIBUTABLE WAS USED WHEN THE LEGISLATURE INTENDED TO COVER THE RECEIPT FROM SOURCES OTHER THAN THE ACTUAL CONDUCT OF THE BUSINESS. THE ASSESSING OFFICER HAS ALSO STATED THAT IN THIS CASE THE SALE OF STEAM WOULD HAVE BEEN L IABLE AS DEDUCTION U/S. 80IA(4 ) IF THE LEGISLATURE HAS USED THE WORD PROFIT ATTRIBUTABLE TO INSTEAD TO DERIVED FROM THE INDUSTRIAL UNDERTAKING. THE ASSESSING OFFICER HAS STATED THAT THE APEX COURT IN THE CASE OF CIT VS. STERLING FOODS (1999) 237 ITR 579 HAS HELD THAT ONLY SUCH BUSINESS PROFIT THAT HAVE DIRECT NEXUS TO THE ESSENTIAL BUSINESS ACTIVITY OF THE ASSESSEE CAN QUALIFY FOR DEDUCTION. CONSEQUENTLY, THE ASSESSING OFFICER HAS DISALLOWED THE D EDUCTION OF RS. 32,51,080/ - U/S. 80IA(4 ) OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE . C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 4 4 . AGGRIEVED ASSESSEE HAS FILED APPE AL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THIS ISSUE AFTER REFERRING THE DEC ISION OF NR AGRAWAL INDUSTRIES OF ITAT AHMEDABAD . 5 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LD. COUNSEL HAS PLACED RELIANCE ON THE DECISION ON WEST COAST PAPER MILLS PVT. LTD. VS. CIT (2014) 52 TAXMAN.COM 268 (MUM - TRIB) DATED 30 TH MAY, 201 4. HE HAS FURTHER CONTENDED THAT IN THE CASE OF M/S. NR AGRAWAL I NDUSTRIES VS. DCIT, THE ISSUE OF STEAM IS POWER OR NOT IS NOT DECIDED BUT SET ASIDE TO THE FILE ASSESSING OFFICER. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF ASSESSING OFFICER. 6 . WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE LD. COUNSEL HAS PLACED AT PAGE NO. 108 OF THE PAPER BOOK THE ORDER OF THE ITAT AHMEDABAD IN THE CASE OF M/S. N.R. AGARWAL VS. DCIT VIDE MA NO. 154 TO 157 WHEREIN AS P A RA 3 OF THE ORDER THE ISSUE OF DEDUCTION U/S. 80IA(4) ON STEAM WAS RESTORED TO THE FILE OF THE LD. CIT(A) FOR DECIDING THE ISSUE DE - NOVO. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE DECISION OF WEST COAST PAPER MILLS PVT. LTD. VS. CIT (2014) 52 TAXMAN.COM 268 (MUM - TRIB) . THE RELEVANT PART OF THE DECISION F R OM PARA 20 TO 23 IS REPRODUCED AS UNDER: - 20. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AS WELL AS THE MATER IAL AVAILABLE ON RECORD. THE ASSESSEE'S CLAIM UNDER SECTION 80 - IA, WITH REGARD TO UNIT NO. 6 IS THAT IT HAS INSTALLED A POWER UNIT IN THE FORM OF CHEMICAL RECOVERY BOILER FOR THE GENERATION OF STEAM. THIS STEAM IS USED FIRSTLY, TO ROTATE THE TURBINE WHICH GENERATES ELECTRICAL POWER FOR THE ASSESSEE WHICH IS USED IN THE PAPER MANUFACTURING PROCESS AND SECONDLY, FOR DRYING OF THE PULP. FOR THE FIRST USE, THE STEAM SO GENERATED BY THE CHEMICAL RECOVERY BOILER HAS A HIGH TEMPERATURE AND PRESSURE WHICH IS THEN T RANSFERRED THROUGH THE INLET TO RUN THE TURBINES. THIS TRANSFORMS TO ELECTRICAL ENERGY WHICH IS SUPPLIED TO PAPER DIVISION FOR RUNNING OF THE MACHINES. THE SECOND USE OF STEAM IS INDEPENDENTLY USING IT FOR EVAPORATING THE MOISTURE FROM THE PAPER PRODUCT OR FOR DRYING PULP BY THE ASSESSEE. ON THESE FACTS, WHETHER IT CAN BE HELD THAT THE SAID UNDERTAKING ON A C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 5 STAND ALONE BASIS HAS BEEN SET - UP FOR GENERATION OF POWER OR NOT WITHIN THE MEANING OF SECTION 80 - IA(4)(IV). THE RELEVANT CLAUSE (IV)(A) OF SECTION 80 - I A(4), READS AS UNDER : '(A) IS SET UP IN ANY PART OF INDIA FOR THE GENERATION AND DISTRIBUTION OF POWER IF IT BEGINS TO GENERATE POWER AT ANY TIME DURING THE PERIOD BEGINNING ON THE FIRST DAY OF APRIL 1993 AND ENDING ON 31ST DAY OF MARCH 2006.' 21. THUS, THE STATUTE CONTEMPLATES 'GENERATION OF POWER' OR 'GENERATION AND DISTRIBUTION OF POWER'. THE MOOT QUESTION BEFORE US IS, WHETHER THE STEAM GENERATED BY THE ASSESSEE, WHICH ROTATES THE TURBINE FOR RUNNING OF MACHINES USED FOR ITS MANUFACTURING PROCESS AND ALSO STEAM ALONE, IS A FORM OF POWER OR NOT. THE CASE OF THE LEARNED COMMISSIONER (APPEALS) IS THAT THE MEANING OF POWER AS CONTEMPLATED IN THE STATUTE IS GENERATION OF ELECTRICITY ALONE, WHEREAS THE CASE OF LEARNED COUNSEL BEFORE US IS THAT THE POWER IS A FORM OF ENERGY WHICH CAN BE ELECTRICAL, MECHANICAL, THERMAL OR ANY OTHER FORM OF ENERGY. THE INCOME - TAX ACT, 1961, DOES NOT DEFINE THE WORD 'POWER'. THE NEW OXFORD DICTIONARY OF ENGLISH DEFINES THE WORD 'POWER' AS 'ENERGY' THAT IS PRODUCED BY MECHANICAL, ELECTRICAL OR OTHER MEANS WHICH IS USED FOR OPERATING DEVICE. OTHERWISE ALSO, GENERATION OF STEAM IS A KIND OF ENERGY WHICH CAN BE CONVERTED INTO MECHANICAL OR ELECTRICAL ENERGY FROM WHICH POWER IS GENERATED. TO SAY THAT THE GENERATION OF POWER IS ONLY RE STRICTED TO GENERATION OF ELECTRICITY ALONE, IS TOO NARROW A VIEW. THE TERM 'POWER' ENCOMPASSES A WHOLE RANGE OF ENERGY GENERATED IN VARIOUS FORMS TO RUN MACHINES, DEVICES, ETC. THIS PRECISE ISSUE HAD ALSO COME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN S EVERAL CASES CITED SUPRA. THE TRIBUNAL IN SIAL SBEC BIOENERGY LTD.'S CASE (SUPRA), WHILE DECIDING THE ISSUE WHETHER GENERATION OF STEAM AMOUNTS TO GENERATION OF POWER OR NOT FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80 - LA, HAS REFERRED TO A CATENA OF DECI SIONS AND ALSO THE DICTIONARY MEANING ON THE MEANING AND TERM OF 'POWER' AND THEREAFTER, OBSERVED AND CONCLUDED AS UNDER : 'THE WORD 'POWER' USED IN SECTION 80 - IA(4)(IV) HAS NOT BEEN DEFINED IN THE STATUTE, THEN THE COMMON PARLANCE MEANING AS PER THE DICTI ONARY IS NORMALLY TAKEN INTO ACCOUNT. THE WORD 'POWER' HAS TO BE GIVEN A MEANING WHICH IS IN COMMON PARLANCE AND IN COMMON PARLANCE THE WORD 'POWER' SHALL MEAN THE ENERGY ONLY. THE ENERGY CAN BE OF ANY FORM, BE IT MECHANICAL, BE IT ELECTRICAL, BE IT WIND O R BE IT THERMAL. THE STEAM PRODUCED BY THE ASSESSEE ON THE PRINCIPLE OF INTERPRETATION OF STATUTE SHALL ONLY BE TERMED AS POWER AND SHALL QUALIFY FOR THE BENEFITS AVAILABLE UNDER SECTION 80 - IA(4)(IV). THE ASSESSEE IS INTO THE BUSINESS OF GENERATION OF POWE R. THE GENERATION OF POWER TAKES PLACE WHEN BAGASSE IS BURNT IN A BOILER AND HEAT GENERATED IS USED TO HEAT UP THE WATER IN THE BOILER AND GENERATES STEAM. THE STEAM SO GENERATED IS AT HIGH TEMPERATURE AND PRESSURE. THIS STEAM IS THEN TRANSFERRED INTO AN I NLET OF STEAM TURBINE THROUGH PIPES. THE ENERGY AVAILABLE IN STEAM IS USED TO ROTATE THE TURBINE, THE TURBINE THEN ROTATES THE ALTERNATOR WHICH GENERATES ELECTRICAL ENERGY. THE STEAM AFTER BEING USED TO ROTATE TURBINE IS DRAWN FROM THE TURBINE OUTLET AND T HEN FINALLY USED. IN THIS BACKGROUND, THE STEAM SO GENERATED IS GENERATED BY THE INDUSTRIAL UNDERTAKING AND THE RECEIPT WOULD BE THE RECEIPT FROM THE BUSINESS OF THE INDUSTRIAL UNDERTAKING WITHIN THE MEANING OF SECTION 80 - IA WHICH WOULD QUALIFY FOR THIS BE NEFIT. THE ASSESSEE, THEREFORE, SUCCEEDS ON THIS ACCOUNT ALSO. THE OBSERVATIONS OF THE AUTHORITIES BELOW THAT IT IS ONLY THE ELECTRICAL FORM OF ENERGY WHICH QUALIFIES FOR DEDUCTION UNDER SECTION 80 - IA, WITH REFERENCE TO THE PROVISIONS OF THE ELECTRICITY AC T, WAS NOT CORRECT.' 22. SIMILARLY, IN THE DECISION OF MAHARAJA SHRI UMAID MILLS LTD.'S CASE (SUPRA), THE TRIBUNAL HELD THAT LIKE ELECTRICITY, STEAM IS ALSO A FORM OF POWER WHICH IS ELIGIBLE FOR RELIEF UNDER SECTION 80 - IA(4). THE RELEVANT OBSERVATION AND T HE CONCLUSION DRAWN BY THE TRIBUNAL IS REPRODUCED BELOW : '5. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND SUBSTANCE IN THE ARGUMENTS OF THE LEARNED AUTHORISED REPRESENTATIVE THAT LIKE ELECTRICITY, STEAM IS ALSO A FORM OF POWER AS PER THE DICTIONARY MEANING REPRODUCED BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) AT PP. 5 AND 5 (SIC) OF THE FIRST APPELLATE ORDER. WE ALSO CONCUR WITH THE VIEW OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THERE IS LITTLE ROOM FOR ANY DOUBT THAT SCIENTIFICALLY OR IN GENERA L PARLANCE, 'PRODUCTION OF STEAM' 'GENERATION OF STEAM 1 : OR FOR THAT MATTER, 'PRODUCTION OF ELECTRICITY' AND 'GENERATION OF ELECTRICITY', SHALL HAVE THE SAME MEANING WHICHEVER OF THE TWO BE THE ITEM UNDER CONSIDERATION. IN THIS REGARD THE LEARNED C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 6 AUTHORISE D REPRESENTATIVE HAS ALSO REFERRED TO THE DEFINITION OF WORD 'GENERATE' UNDER SECTION 2(29) OF THE ELECTRICITY ACT, 2003 AS PER WHICH 'GENERATE' MEANS TO PRODUCE ELECTRICITY FROM A GENERATING STATION FOR THE PURPOSE OF GIVING SUPPLY TO ITS ANY PREMISES OR ENABLING A SUPPLIER TO BE SO GIVEN. THE ASSESSING OFFICER HAS TRIED TO POINT OUT THE INTENTION OF THE LEGISLATURES BY REFERRING TO SECTION 80 - IA(4)(IV)(B) TO INFER THAT INTENTION IS TO PROVIDE BENEFIT TO THE GENERATION OF ELECTRICITY ONLY, SINCE IN THE SUB - CLAUSE (B) TRANSMISSION AND DISTRIBUTION LINES ARE MENTIONED WHICH CAN BE OF ELECTRICITY ONLY. SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE IN THIS REGARD TO WHICH WE ALSO AGREE REMAINED THAT SUB - CLAUSES (A), (B) AND (C) OF SECTION 80 - IA(4)(IV) PRO VIDE FOR DEDUCTION IN THE CASES OF THREE TYPES OF UNDERTAKING, VIZ. THE ONE WHICH IS ENGAGED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER ; SECOND, WHICH START TRANSMISSION OR DISTRIBUTION LINES ; AND THE THIRD, WHICH UNDERTAKES SUBSTANTIAL RENOVA TION AND MODERNISATION OF THE EXISTING NETWORK OF TRANSMISSION OR DISTRIBUTION LINES. ALL THESE THREE CLAUSES DEAL WITH THE THREE DIFFERENT CATEGORIES OF THE UNDERTAKING. THESE THREE TYPES OF UNDERTAKINGS REFERRED TO IN THE SAID SUB - CLAUSES (A), (B) AND (C ) ARE DIFFERENT AND INDEPENDENT OF EACH OTHER. THUS WHILE DEALING (WITH) ONE SUB - CLAUSE, INFERENCE NEED NOT AND CANNOT BE DRAWN FROM THE OTHER SUBCLAUSE. ON PERUSAL OF THESE PROVISIONS, WE AGREE WITH THE PLEA OF THE LEARNED AUTHORISED REPRESENTATIVE THAT C ASE OF THE ASSESSEE FALLS IN SUB - CLAUSE (A) ITSELF AND THE LEGISLATIVE INTENT INFERRED BY THE ASSESSING OFFICER WITH REFERENCE TO SUB - CLAUSE (B) IS SUPERFLUOUS, JUST LIKE THERE IS TRANSMISSION OR DISTRIBUTION LINES FOR ELECTRICITY THERE ARE TRANSMISSION AN D DISTRIBUTION LINES FOR STEAM TOO. THEREFORE, THERE IS NO BASIS WHATSOEVER FOR DRAWING DISTINCTION BETWEEN THE TWO OR A ROOM FOR ANY CONFUSION BETWEEN THE TWO PROPOSITIONS. THE 'POWER' AND 'ENERGY' ARE SYNONYMOUS, WHICH CAN BE IN SEVERAL TYPES AND FORMS, BE IT HEAT, WHICH IS STEAM OR MECHANICAL OR ELECTRICAL, WIND OR BE IT THERMAL. WE ALSO AGREE WITH THIS PLEA OF THE LEARNED AUTHORISED REPRESENTATIVE THAT IF THE INTENT OF THE LEGISLATURE REMAINED TO RESTORE THE APPLICATION OF THE BENEFIT OF DEDUCTION UNDER SECTION 80 - IA TO GENERATION OF ELECTRICITY ONLY, IT WOULD HAVE BEEN SPECIFICALLY SO WORDED BY USING THE CONNOTATION 'ELECTRICAL POWER' ONLY RATHER THAN THE CONNOTATION 'POWER' OMNIBUS. AS PER CHAMBERS TWENTIETH CENTURY DICTIONARY, STEAMPOWER ; IS A SPELL OF TRAVEL BY STEAM POWER; ENERGY, FORCE, SPIRIT FOR, USING, WORKED BY STEAM ; TO RISE OR PASS OFF IN STEAM OR VAPOUR, OR SMELL; TO BECOME DIMMED WITH CONDENSED VAPOUR (OFTEN WITH UP); TO MOVE BY MEANS OF STEAM. AS PER THE CAMBRIDGE INTERNATIONAL DICTIONARY OF ENGLISH, THE STEAM IS THE HOT GAS THAT IS PRODUCED WHEN WATER BOILS ; STEAM CAN BE USED TO PROVIDE POWER, STEAM TURBINES OF A STEAM ENGINE/LOCOMOTIVE OF THE AGE OF STEAM. THUS THERE IS NO DOUBT, LIKE ELECTRICITY, STEAM IS ALSO A FORM OF POWER. THE ARGU MENTS ADVANCED ON BEHALF OF THE ASSESSEE ALSO FIND SUPPORT FROM THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OFSIAL SBEC BIOENERGY LTD. V. DY. CIT [2004] 83 TTJ (DEL) 866 ON AN IDENTICAL ISSUE WHEREIN DEALING WITH THE MATTER IN DETAIL, IT HA S BEEN HELD THAT THE WORD 'POWER' HAS TO BE GIVEN A MEANING WHICH IS IN COMMON PARLANCE AND IN COMMON PARLANCE THE WORD 'POWER' SHALL MEAN THE ENERGY ONLY. THE ENERGY CAN BE OF ANY FORM, BE IT MECHANICAL, BE IT ELECTRICAL, BE IT WIND OR BE IT THERMAL. THE STEAM PRODUCED BY THE ASSESSEE ON THE PRINCIPLE OF INTERPRETATION OF STATUTE SHALL ONLY BE TERMED AS POWER AND SHALL QUALIFY FOR THE BENEFITS AVAILABLE UNDER SECTION 80 - IA(4)(IV), HELD THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, WE FULLY CONCUR WITH THE DECIS ION ON THE ISSUE ARRIVED AT BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) THAT THE ASSESSEE IS IN THE BUSINESS OF GENERATION OF POWER AND THAT THE STEAM SO GENERATED BY THE INDUSTRIAL UNDERTAKING AND RECEIPT FROM THE BUSINESS OF INDUSTRIAL UNDERTAKIN G IS WITHIN THE MEANING OF SECTION 80 - IA WHICH WOULD QUALIFY FOR THIS BENEFIT. THE FIRST APPELLATE ORDER IS THUS UPHELD. THE GROUND IS THUS REJECTED.' 23. FROM THE AFORESAID DECISIONS, IT CAN BE INFERRED THAT THE GENERATION/ PRODUCTION OF STEAM IS ALSO A F ORM OF POWER AND THE UNIT 6 WHICH IS AN UNDERTAKING SET - UP FOR GENERATION OF STEAM FOR ITS MANUFACTURING PROCESS CAN BE SAID TO BE FOR GENERATION OF POWER. THE BASIS ON WHICH THE LEARNED COMMISSIONER (APPEALS) HAS TRIED TO DISTINGUISH THE DECISION OF SIAL SBEC BIOENERGY LTD.'S CASE (SUPRA) IS VERY SUPERFICIAL. WHAT NEEDS TO BE SEEN IS, WHETHER GENERATION OF STEAM CAN BE SAID TO C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 7 BE GENERATION OF POWER I OR NOT, THEN, THE FINDING AND THE CONCLUSION DRAWN BY THE TRIBUNAL IN THE AFORESAID DECISION AFTER REFE RRING I TO THE CATENA OF DECISIONS AND VARIOUS OTHER PROVISIONS CLEARLY CLINCHES THE POINT. NOW COMING TO THE OTHER I OBSERVATION OF THE LEARNED COMMISSIONER (APPEALS) THAT THE ASSESSEE HAS NOT UNDERTAKEN THE GENERATION OF I POWER IN THIS YEAR ALSO, WE FIND THAT THE SAME IS INCORRECT ON FACTS BECAUSE THE ASSESSEE HAS ALREADY FILED A I CERTIFICATE FROM THE KARNATAKA STATE BOILER INSPECTION DEPARTMENT THAT THE ASSESSEE HAS GENERATED STEAM I DURING THE PERIOD FROM MAY 3, 2001 TO MAY 6, 2002 WHICH MOSTLY FA LLS IN THIS YEAR ONLY AND THE RATE OF QUANTITY GENERATED HAS ALSO BEEN MENTIONED. THIS GENERATION OF STEAM HAS BEEN EVALUATED AT A REALISABLE MARKET VALUE BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND THE ASSESSEE HAS ALSO DEBITED EXPENDITURE INCURRED FOR TH E GENERATION OF POWER. THUS, ON THESE FACTS ITSELF, IT CANNOT BE HELD THAT THE ASSESSEE HAS NOT UNDERTAKEN THE GENERATION OF POWER IN THIS YEAR. THE SECTION PROVIDES THAT THE ASSESSEE MUST BEGIN TO GENERATE POWER DURING THE PERIOD DEFINED UNDER THE STATUTE AND THE IMPUGNED ASSESSMENT YEAR DEFINITELY FALLS WITHIN THAT PERIOD. LASTLY, IN SO FAR AS THE OBSERVATION AND THE CONCLUSION OF THE ASSESSING OFFICER, WHICH ARE BASED ON SIMILAR REASONS AS GIVEN FOR UNITS - 1 TO 5, THE SAME IS ALSO NOT SUSTAINABLE AS THE T RIBUNAL HAS ALREADY DECIDED THE ISSUE ON THESE REASONING IN FAVOUR OF THE ASSESSEE. THUS, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) ON THIS SCORE AND HOLD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80 - IA WITH REGARD TO UNIT - 6 ALSO AS A STANDALONE POWER GENERATING UNDERTAKING. GROUND NO. 5 RAISED BY THE ASSESSEE IS THUS TREATED AS ALLOWED. LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF CO - ORDINATE BENCH OF ITAT AHMEDABAD VIDE ITA NO. 1233/AHD /2011 IN THE CASE OF THE ACIT VS. J.H. KHARAWALA PVT. LTD. DATED 10 - 04 - 2015 WHEREIN THE ISSUE OF DEDUCTION U/S. 80IA(4) ON THE VALUE OF STEAM IS DECIDED IN FAVOUR OF THE ASSESSEE. AFTER CONSIDERING THE ABOVE REFERRED DECISIONS OF THE CO - ORDINATE BENCHES OF THE ITAT, ON THE SIMILAR ISSUE AND IDENTICAL FACTS, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE OF DEDUCTION U/S. 80IA(4) ON STEAM. THEREFORE, CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE CROSS OBJECTION O F THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 11 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER C.O. NO. 41/AHD/2015 (IN I.T.A NO. 305 /AHD/20 15) A.Y. 2011 - 12 PAGE NO M/S. JAY CHEMICAL INDUSTRIES LTD. VS. DCIT 8 AHMEDABAD : DATED 26 /11 / 2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,