Kakatiya Cement Sugar & Industries Limited, Hyderabad V. Dy. Commissioner of Income Tax, Circle-2(1), Hyderabad

ITA 1447/Hyd/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6996 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 11-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M V ANIL KUMAR
• Section: 143(3); 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES : BENCH A HYDERABAD (THROUGH VIDEO CONFERENCE ) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1283 /HYD./201 7 ASSESSMENT YEAR : 201 2 - 13 DY.CIT, CIRCLE 2(1) VS. KAKATIYA CEMENT SUGAR & HYDERABAD INDUSTRIES LTD. HYDERABAD & I.T.A. NO. 1 447 /HYD./2017 ASSESSMENT YEAR : 2012 - 13 KAKATIYA CEMENT SUGAR & INDUSTRIES LTD. VS. DCIT, CIRCLE 2(1) HYDERABAD HYDERABAD [PAN: AABCK1868J] (APPELLANT) (RESPONDENT) FOR ASSESSEE: SRI M.V. ANIL KUMAR, A.R. FOR REVENUE: SRI SUNIL KUMAR PANDEY, D.R. DATE OF HEARING : 02/02/2021 DATE OF PRONOUNCEMENT : 09 /04/2021 O R D E R PER S.S. GODARA, J.M. THESE REVENUES AND ASSESSEES CROSS APPEALS FOR AY 2012 - 13 ARISE FROM CIT(A) - 1, GUNTURS ORDER DA TED 19.04.2017 IN CASE NO.169/2015 - 16 AND ITA NO. 1283/H/17 AND 1447/H/17 KAKATIYA CEMENT SUGAR & INDUSTRIES LIMITED. 2 CIT(A) - 1, GUNTURS ORDER DATED 19042017 IN CASE NO.159/2015 - 16 U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. COMING TO THE REVENUES APPEAL WE NOTICE THAT THE REVENUE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT(A) IS CORRECT IN LAW IN HOLDING THAT CO GENERATION OF POWER PLANT IS AN INDEPENDENT U NDERTAKING ELIGIBLE FOR DEDUCTION U/S 80 IA OF THE ACT WHEN THE OPERATION ARE INTEGRATED WITH THE EXISTING SUGAR PLANT? 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT(A) IS CORRECT IN LAW IN HOLDING THAT GENERATION OF LP STEAM WHICH IS A W ASTE PRODUCT WITH NO VALUE IS EQUAL TO GENERATION OF POWER WHICH IS ELIGIBLE FOR DEDUCTION U/S 80 IA OF THE ACT? 3 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT(A) IS CORRECT IN LAW IN HOLDING THAT LP STEAM HAS DEFINITE VALUE WHERE AS SUCH LP STREAM HAS NO MARKET VALUE AND IN FACT A MARKETABLE COMMODITY? 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2.1. IT IS NOT IN DISPUTE THAT THE ISSUE OF ASSESSEE S ELIGIBILITY QUA ALL THE THREE ISSUES RAISED HEREINABOVE AT REENUES BE HEST ALREADY STAND COVERED AS PER THIS TRIBUNALS COORDINATE BENCH ORDERS IN ITA 412/HYD/16 DATED 18.10.2016 FOR AY 2011 - 12 AND ITA NO.346/HYD/15 ORDER DT 30.06.2015 FOR AY 2010 - 11 RESPECTIVELY. 2.2. MR . P ANDEY AT THIS STAGE HIGHLIGHTED THE FACT THAT THIS TRIBUNAL'S COORDINATE BENCH IN ITS DECISION IN ITA 1024/HYD/2013 HAS DIRECTED THE A SSESSING OFFICER TO COMPUTE ASSESSEES DEDUCTION CLAIM AFRESH AS PER LAW. BE THAT AS IT MAY, THE FACT REMAINS THAT THIS TRIBUN AL HAS EXAMINED THE VERY ISSUE OF ASSESSEES ELIGIBILITY QUA SEC. 80 IA DEDUCTION CLAIM WHICH HAS CULMINATED IN RE - COMPUTATION DIRECTIONS ALSO. WE THUS ADOPT JUDICIAL ITA NO. 1283/H/17 AND 1447/H/17 KAKATIYA CEMENT SUGAR & INDUSTRIES LIMITED. 3 CONSISTENCY AND DECLINE R EVENUE'S ABOVE EXTRACTED GROUNDS IN PRINCIPLE, BUT THE ISSU E OF RE - COMPUTATION IS RESTORED BACK TO THE FILE OF A SSESSING O FFICER AT THE SAME TIME FOR HIS FRESH FACTUAL VERIFICATION. REVENUES APPEAL ITA 1283/HYD/17 IS PARTLY ACCEPTED FOR STATISTICAL PURPOSES IN FOREGOING TERMS. 3. NEXT COMES ASSESSEES CROSS APPEAL RAISING THE FOLLOWING SUBSTANTIVE GROUNDS. 1. YOUR APPELLANT SUBMITS THAT THE CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN NOT DIRECTING THE AO TO ADOPT THE RATE AS APPROVED BY THE ELECTRICITY REGULATORY AUTHORITY AS PER THE DIR ECTIONS OF THE HONBLE SUPREME COURT AND APPELLATE TRIBUNAL FOR ELECTRICITY. 2. YOUR APPELLANT SUBMITS THAT THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT ELECTRICITY IN THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH ELECTRICITY IS SOLD BY TSTRANSCO OR APTRANSCO TO ITS CUSTOMERS, WHICH SHOULD BE THE MARKET VALUE AS PER SECTION 80 IA(8) AND ACCORDINGLY DIRECT T HE AO TO APPLY SUCH MARKET VALUE TO THE SUPPLY MADE TO SUGAR AND CEMENT DIVISION. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, YOUR APPELLANT PRAYS THAT THE RELIEF CLAIMED MAY BE ALLOWED. 3.1. WE MAKE IT CLEAR THAT THE ISS UE INVOLVED HEREIN CARRIES DISALLOWANCE OF RS. 2,92,45,393/ - ON ACCOUNT OF DIFFERENCE BETWEEN THE POWER CONSUMPTION CHARGES PAID TO STATE DISTRIBUTION AGENCIES VIS - - VIS POWER GENERATED IN THE ASSESSEES CAPTIVE CENTRE . MR . ANIL KUMAR HAS FILED A LIST OF JUDICIAL PRECEDENTS I.E. : CIT VS. RELIANCE INDUSTRIES LTD. 102 TAXMANN . COM 373 (BOM HC); PR.CIT VS. GUJARAT ALKALIES & CHEMICALS LTD.. 395 ITR 247 (GUJ HC); CIT VS. RELIANCE INDUSTRIES LTD. 382 ITR 574 (BOM HC); CIT VS TATA METALIKS LTD. 387 ITR 411 (CAL HC) AND SRI MATHA SPINNING MILLS PVT. LTD. VS DCIT 20 ITR(T) 317 (CHENNAI TRIB.) THAT THE ASSESSEE IS VERY MUCH ENTITLED TO CHARGE STATE AGENCIES POW ER RATES ONLY. WE FIND THAT THE ASSESSEES INSTANT SUBSTANTIVE GRIEVANCE DOES NOT DESERVE TO BE ACCEPTED IN ENTIRETY BECAUSE OF THE FACT THAT THE STATE P OWER AGENCIES CALCULATION OF THEIR RESPECTIVE TARIFF ALSO INCLUDE S CESS (ES) AND DUT Y(IES) IN THE N ATURE OF EXCISE OR GST; AS THE CASE MAY BE ETC. ITA NO. 1283/H/17 AND 1447/H/17 KAKATIYA CEMENT SUGAR & INDUSTRIES LIMITED. 4 WHICH THE ASSESSEE IS NOT ENTITLED TO COLLECT BEING A NON - SOVEREIGN OPERATOR. WE THUS FOLLOW THE ABOVE LIST OF JUDICIAL PRECEDENTS TO ACCEPT ASSESSEES INSTANT SUBSTANTIVE GRIEVANCE AND DIRE CT THE A SSESSING OFFICER TO ADOPT THE STATE AGENCIES POWER RATES AFTER EXCLUDING THE CESS AND DUTIES COMPONENT IF ANY AS PER LAW IN CONSEQUENTIAL COMPUTATIONS . THIS ASSESSEES APPEAL ITA 1447/HYD/17 IS PARTLY ACCEPTED FOR STATISTICAL PURPOSES IN ABOV E TERMS. BOTH THESE REVENUES AND ASSESSEES CROSS - APPEALS ITA NOS. 1283 & 1447/HYD/17 ARE PARTLY ACCEPTED FOR STATISTICAL PURPOSES INN ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. PRONOUNCED IN OPEN COURT ON 09 TH APRIL, 2021. SD/ - SD/ - (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE APRIL, 2021. * GMV COPY OF THE ORDER FORWARDED TO: 1. M/S KAKATIYA CEMENT SUGAR & INDUSTRIES LTD., C/O M.ANANDAM & CO., CHARTERED ACCOUNTANTS, 7A, SURYA TOWERS, S.P..ROAD, SECUNDERABAD 500 003 , TELANGANA . 2. DY.CIT, CIRCLE 2(1), HYDERABAD, TELANGANA. 2. CIT(A) - 1, HYDERABAD 3. ACIT, RANGE 2 , HYDERABAD. 4. CIT(A) - 1, GUNTUR . 5. PR.CIT - 2 , HYDERABAD 6. DR, ITAT, HYDERAB AD. 7 . GUARD FILE.