Neyveli Lignite Corporation Limited, Neyveli V. DCIT, CHENNAI

ITA 1781/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57786 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R B NAIK
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMB ER I.T.A. NO. 1781/MDS/2011 A.Y. 2008-09 THE DIRECTOR [FINANCE] CORPORATE OFFICE, BLOCK 1 NEYVELI LIGNITE CORPORATION LIMITED, NEYVELI CUDDALORE DISTRICT TAMIL NADU - 607 801 PAN : AAACN 1121 C (APPELLANT) VS. THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT CHENNAI (RESPONDENT) APPELLANT BY : SHRI SAROJ KUMAR PARID A, ADVOCATE RESPONDENT BY : SHRI R.B. NAIK, C IT, DR DATE OF HEARING : 05.01.2012 DATE OF PRONOUNCEMENT : 05.01.2012 O R D E R PER N.S. SAINI, A.M :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 30.09.2011 OF COMMISSIONER OF INCOME TAX (APP EALS)-LARGE TAX PAYER UNIT, CHENNAI FOR THE ASSESSMENT YEAR 200 8-09. ITA NOS. 1781/MDS/2011 2 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)/LTU HAS ERRED IN CONFIRMING THE ASSESSING OFFICERS TREATMENT OF EXCLUDING THE INCOME TAX RECOVERABLE FROM THE ELECTRICITY BOARDS FOR DETERMINING THE PROFIT ELIGIBLE FOR DEDUCTION U/S 8 0IA OF THE ACT FOR THERMAL POWER STATION I EXPANSION. 1.2 THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THA T THE INCOME TAX RECOVERABLE IS PART OF THE PRICE FOR SAL E OF POWER. IT IS SIMILAR TO THAT OF OTHER COMPONENTS S UCH AS ENERGY CHARGES, INTEREST ON LOAN, DEPRECIATION O N MACHINERY, OPERATION AND MAINTENANCE EXPENDITURE. INTEREST ON WORKING CAPITAL, RETURN ON EQUITY AND TAXES ON INCOME WHICH DETERMINE THE PRICE PAYABLE FOR THE PURCHASE OF POWER FROM THE APPELLANT BY THE ELECTRICITY BOARDS. 1.3 THE APPELLANTS CLAIM FOR SALE PRICE OF POWER I S BASED ON CENTRAL ELECTRICITY REGULATORY COMMISSION [CERC]S ORDER IN LINE WITH CERC REGULATIONS. BESIDES THE SECTION 195A OF THE INCOME-TAX ACT, THE NOTIFICATION FROM THE MINISTRY OF POWER AND THE OPINION OF THE EXPERT COMMITTEE CONSTITUTED BY THE ITA NOS. 1781/MDS/2011 3 INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA ARE SUPPORTIVE. HENCE THE TAX REIMBURSEMENT BY THE ELECTRICITY BOARDS SHOULD BE TREATED AS PART OF THE SALE PRICE OF THE POWER AND THE SAME IS CONSIDERED AS PART OF THE INCOME DERIVED BY THE UNDERTAKING. 3. THE SOLE ISSUE INVOLVED IN THE ABOVE GROUNDS OF APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF DEDUCTI ON U/S 80IA OF THE ACT OF RS. 7.85 CRORES ON INCOME TAX REIMBURSE MENT BY THE LD. CIT(A). 4. THE LD. A.R. FOR THE ASSESSEE SHRI SAROJ KUMAR P ARIDA, AT THE TIME OF HEARING VERY FAIRLY CONCEDED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE TRIBUNAL I N ASSESSMENT YEAR 2001-02 IN ITA NO. 2315/MDS/2003 ORDER DATED 18.8.2 004. 5. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE O RDERS OF THE LOWER AUTHORITIES. ITA NOS. 1781/MDS/2011 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT THE LD. CIT(A) HAS CONFI RMED THE DISALLOWANCE BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2001-02 WHEREIN IT WAS HELD THAT THE INCOME-TAX REIMBURSEMENT RECEIVED BY THE ASSESSEE I S NOT ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. WE, THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE GROUNDS OF APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 5 TH JANUARY, 2012. SD/- SD/- (HARI OM MARATHA) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 5 TH JANUARY, 2012. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A) (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE