M/s. Sarda Energy & Mineral Limited, Nagpur V. Dy.Commissioner of Income Tax,Circle-4, Nagpur

ITA 253/NAG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75938 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRITI JAIN DAS
• Assessee Lawyers: J D MISTRY
• Keywords: Business expenditure; Question of law
• Section: 263; 234B; 37(1)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL-E -BENCH, NAGPUR ! ! ' ! /(THROUGH VIDEO CONFERENCE AT MUMBAI) # # # # $ $$ $ % %% % . . , '& '& '& '& $ $$ $ '!() '!() '!() '!() , ! !! ! . . BEFORE S/SH.H.L.KARWA,PRESIDENT AND RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.71/NAG/2011 # # # # *# *# *# *# / ASSESSMENT YEAR 2007-08 DY. COMMISSIONER OF INCOME TAX, CIRCLE-4, ROOM NO. 301,3 RD FLOOR, SARAF CHAMBER, SADAR, NAGPUR. VS. M/S SARDA ENERGY & MINERALS LTD. 73-A, CENTRAL AVENUE, NAGPUR-440018 PAN: AAACR6149L ( +, / APPELLANT) ( -.+, / RESPONDENT) /. ITA NO.253/NAG/2012 # # # # *# *# *# *# / ASSESSMENT YEAR 2008-09 M/S SARDA ENERGY & MINERALS LTD. 73-A, CENTRAL AVENUE, NAGPUR-440018 PAN: AAACR6149L VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-4, ROOM NO. 301,3 RD FLOOR, SARAF CHAMBER, SADAR, NAGPUR. ( +, / APPELLANT) ( -.+, / RESPONDENT) REVENUE BY : SMT. PRITI JAIN DAS ASSESSEE BY : J.D.MISTRY / 0 / DATE OF HEARING : 22- 01 -201 4 1* / 0 /DATE OF PRONOUNCEMENT : 03 - 02 -201 4 , 1961 254 )1( ! !! ! (/#/ (/#/ (/#/ (/#/ 2!3 2!3 2!3 2!3 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM - ! ! ! ! 24 24 24 24 , '!() '!() '!() '!() ! !! ! : ASSESSING OFFICER(AO)AND THE ASSESSEE-COMPANY HAVE FILED APPEALS;AGAINST THE ORDERS DATED 08. 02.2011 AND 26.03.2012 RESPECTIVELY OF THE CIT (A)- II,NAGPUR;FOR THE AYS.2007-08 AND 2008-09 WHEREIN ISSUE INVOLVED IS SIMILAR.AS THE MAIN ISSUE IS IDENTICAL FOR BOTH THE YEARS SO,FOR THE SAKE OF CONVENIENCE WE ARE DECIDING THE APPEALS BY A SI NGLE COMMON ORDER. GROUNDS OF APPEAL FILED BY THE AO,FOR THE AY.2007-0 8 READ AS UNDER: 1. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE C ASE THE MARKET VALUE AS STATED IN SEC. 80IA (8) WILL BE THE SAME AS THE SALE PRICE OF THE STATE ELECTRICITY BOARD WHEN THE ASSESSEE IS NOT INCURRING ANY TRANSMISSION/LINE LOS SES OR ADMINISTRATIVE OR ANY OTHER CHARGE WHICH THE STATE ELECTRICITY BOARD HAS TO INC UR NECESSARILY. 2. ANY OTHER GROUND THAT MAY BE RAISED DURING THE HEAR ING OF APPEAL. ASSESSEE HAD FILED FOLLOWING GROUNDS OF APPEAL FOR THE NEXT AY: 2008-09 2 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. 1.THE CIT(A)ERRED IN CONFIRMING THE ORDER OF ASSESS MENT RESTRICTING THE DEDUCTION UNDER SECTION 801A OF THE ACT TO RS.26,10,28,391 INSTEAD OF THE RS.68,48,02,132, AS CLAIMED. 2.THE CIT(A] ERRED IN HOLDING THAT THE FINDINGS OF THE HONBLE ITAT FOR ASSESSMENT YEARS 2003-04, 2004-05 AND 2005-06 WERE NOT BINDING ON HI M. 3.THE CIT(A) ERRED NOT FOLLOWING HIS PREDECESSORS O RDER FOR ASSESSMENT YEAR 2007-08 WHEREIN IT HAS BEEN HELD THAT THE FINDINGS OF THE H ONBLE ITAT FOR ASSESSMENT YEARS 2003- 04, 2004-05 AND 2005-06 CONCLUDE THE ISSUE IN FAVOU R OF THE APPELLANT. 4.THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE O F RS.1,00,000 PAID TO ARRIVE AT A SETTLEMENT OF DISPUTE UNDER THE PROVISIONS OF FACTO RIES ACT, 1948 WITHOUT APPRECIATING THAT THE SAME WAS COMPENSATORY IN NATURE AND ALLOWABLE U NDER SECTION 37(1) OF THE ACT. 5.THE CIT(A) ERRED IN LEVYING INTEREST UNDER SECTIO N 234B AND 234C OF THE ACT. ITA/71/NGP/2011-AY.2007-08: 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF GENERAT ION OF POWER AND MANUFACTURING OF FERRO ALLOYS AND STEEL PRODUCTS FILED ITS RETURN OF INCOM E ON 07.11.2007DECLARING TOTAL INCOME OF RS. NIL.AO FINALISED THE ASSESSMENT ORDER U/S.143(3) OF THE ACT,ON 31.03.2009,DETERMINING THE TOTAL INCOME AT RS.31.40 CRORES. EFFECTIVE GROUND OF APPEAL IS ABOUT CLAIM MADE BY T HE ASSESSEE U/S.80IA OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS AO NOTICED THAT ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IA OF THE ACT AT RS.52,86,27,662/-WHICH WAS LIMITED TO THE AVAILABLE PROFIT I.E.36,83,76,045/-,THAT DURING THE YEAR UNDER APPEAL CHATTISGARH ELECTRICITY COMPANY LTD. ( CECL) AND RAIPUR GAS LTD. (RGL)MERGED WITH RAIPUR ALLOYS & STEEL LTD.(RASL)W.E.F 01.04.20 06,THAT SUBSEQUENT TO THE MERGER THE NAMES OF THE COMPANY WERE CHANGED TO SARDA ENERGY & MINER ALS LTD.(SEML),THAT CECL WAS CLAIMING DEDUCTION U/S.80IA OF THE ACT FROM AY. 2003-04 FOR ITS POWER PLANT,THAT AFTER MERGER SEML MADE A CLAIM UNDER SECTION 80IA.ON PERUSAL OF THE C OMPARATIVE CHART OF SALE TO CSEB AND RASL,HE NOTICED THAT SALE OF POWER TO RASL WAS @ RS . 3.38 PER UNIT WHEREAS SALE OF POWER TO CSEB WAS AT RS. 1.95 PER UNIT.HE FURTHER FOUND THAT FERRO ALLOYS DIVISION OF THE ASSESSEE WAS SUPPLIED POWER @ RS.3.79 I.E.RS.3.80 PER UNIT.HE AL SO NOTICED THAT THE ASSESSEE HAD ENTERED IN TO AGREEMENTS WITH CSEB FOR SALE OF POWER,THAT ELECTRI CITY WAS SOLD TO CSEB AT RS. 3.32 PER UNIT FOR THE PERIOD 01.04. 2006 TO 14.01.2007,THAT FOR THE R EMAINING PERIOD(15.01.2007 TO 31.03.2007) IT WAS SOLD @ 2.80 RUPEES PER UNIT.AFTER CONSIDERING T HE ORDERS OF THE CIT RAIPUR PASSED U/S. 263 OF THE ACT FOR THE EARLIER AYS AND THE SUBMISSIONS MAD E BY THE ASSESSEE,AO HELD THAT SOLE INTENTION OF THE ASSESSEE WAS TO SELL ELECTRICITY AT HIGHER R ATE TO ITS OWN FERRO ALLOYS DIVISION WITH THE PURPOSE OF REDUCING THE PROFIT.HE ADOPTED THE RATE OF RS. 2.10 PER UNIT AS THE CORRECT RATE AND REWORKED THE DEDUCTION U/S. 80IA(8) OF THE ACT. 2.1. AGAINST THE ORDER OF THE AO,ASSESSEE PREFERRED AN A PPEAL BEFORE THE FIRST APPEAL AUTHORITY (FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE AND THE ASSESSMENT ORDER SHE HELD THAT ISSUE BEFORE HER WAS COVERED BY THE ORDER DATED 28. 10.2009 OF THE ITAT MUMBAI,DELIVERED IN THE CASE OF CECL(ITA/297/NAG/2008).FOLLOWING THE SAID D ECISION,FAA DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 2.2. BEFORE US,DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTE D THAT ASSESSEE HAD SOLD ELECTRICITY TO ITS OWN DIVISION WITH AN ULTERIOR MOTIVE OF REDUCING PR OFIT,THAT THERE WAS NO JUSTIFICATION FOR CHARGING RS. 3.80 PER UNIT FROM THE FERRO AND ALLOY DIVISION .AUTHORISED REPRESENTATIVE(AR) SUBMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISIONS OF THE TRIBUNAL DELIVERED IN THE CASE OF ASSESSEE ITSELF.HE RELIED UPON THE FOLLOWING DECISIONS: I). ITA/248/NAG/2008 DTD.28.10.2009,ITA/249/ NAG/2008 D TD.28.10.2009 AND ITA/297/NAG/2008 DATED 28.10.2009,DELIVERED BY THE E BENCH OF ITAT,M UMBAI IN ASSESSEES OWN CASES FOR THE AY.2003-04,2004-05AND 2005-06. 3 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. II). JINDAL STEEL AND POWER LTD.(16SOT509), III). GODAVARI POWER AND ISPAT LTD.(ITA/60-62/ BLPR/2010 DTD.04.11.2011-AY.2004-05TO2006- 07), IV). GODAVARI POWER AND ISPAT LTD. RAIPUR(HONBLE CHHATT ISGARH HIGH COURT-IT CASE NO 31-33 OF 2012), V). SMT.GODAVARI DEVI SARAF(113ITR589), VI). EXCEL COTSPIN (INDIA)(P)LTD.(ITA/1570/MDS/2011-AY.2 007-08), VII). ARUN TEXTILE(P)LTD(ITA NO.569/MDS/ 2011 AY.2007-08) , VIII). SHAH ALLOYS LIMITED(ITA 844/AHD/2006-AY.2002-03). HE FURTHER SUBMITTED THAT CIT,RAIPUR HAD INITIATED REVISIONARY PROCEEDINGS IN THE CASE OF THE ASSESSEE FOR THE EARLIER AYS.ON THE SIMILAR GROUND MENTIONED BY THE AO IN HIS ORDER,THAT ORDER PASSED BY THE CIT U/S. 263 OF THE ACT WAS QUASHED B Y THE TRIBUNAL,THAT IN THE CASE OF GODAVARI POWER AND ISPAT LTD. (SUPRA) SIMILAR ISSUE WAS DECI DED IN FAVOUR OF THE ASSESSEE BY THE BILASPUR BENCH OF THE TRIBUNAL,THAT HONBLE HIGH COURT OF CH HATTISGARH HAD,VIDE ITS ORDER DATED 02.08. 2013,HAD HELD THAT THERE WAS NO ILLEGALITY IN THE O RDERS PASSED BY THE BILASPUR BENCH OF THE TRIBUNAL,THAT THE AO HAD RELIED UPON THE ORDER OF T HE CIT RAIPUR WHILE DECIDING THE ISSUE AGAINST THE ASSESSEE,THAT IN VIEW OF THE ORDER OF THE TRIBU NAL FOR EARLIER YEARS ORDER OF THE FAA SHOULD BE ENDORSED. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IT WAS THE ORDER PASSED BY THE CIT,RAIPUR U/S.263 OF THE A CT THAT HAS TRIGGERED THE CONTROVERSY BEFORE US.HE HAD,WHILE REVISING THE ORDER FOR THE AY 2003- 04 PASSED BY THE AO,HELD THAT ELECTRICITY WAS SOLD AT HIGHER RATE BY THE ASSESSEE TO ITS OWN FERR O ALLOYS DIVISION & CAPTIVE DIVISION WITH THE PURPOSE OF REDUCING THE TAX LIABILITY.AO HAD FOLLOW ED THE CIT RAIPUR,WHILE FRAMING ASSESSMENT FOR THE YEAR UNDER APPEAL.WE FIND THAT ORDER PASSED BY THE CIT-RAIPUR U/S.263 HAS BEEN REVERSED BY THE TRIBUNAL FOR ALL THE THREE AYS.IN THESE CIRC UMSTANCES IN OUR OPINION FAA WAS JUSTIFIED IN ALLOWING THE APPEAL FILED BY THE ASSESSEE.WE FIND T HAT WHILE DEALING WITH THE IDENTICAL ISSUE IN THE CASE OF GODAVARI POWER AND ISPAT LTD.(SUPRA)HONBL E HIGH COURT CHHATTISGARH HAD FRAMED THE FOLLOWING QUESTION OF LAW. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE,THE MARKET VALUE, AS SPECIFIED IN SECTION [80-IA (8)] OF THE ACT WOULD B E THE SAME AS THE SALE PRICE OF THE STATE ELECTRICITY BOARD WHEN THE ASSESSEE DID N OT INCUR ANY TRANSMISSION LOSS OR ADMINISTRATIVE OR ANY OTHER CHARGES WHICH THE ST ATE ELECTRICITY BOARD HAS TO INCUR FOR THE SAME? WHILE DECIDING THE MATTER HONBLE COURT DISMISSED T HE APPEALS FILED BY THE DEPARTMENT. 2.3.A. WE FIND THAT IN THE CASE OF JINDAL STEEL AND POWER LTD.(SUPRA)IDENTICAL ISSUE HAD ARISEN AND THE FAA HAD CONFIRMED THE ORDER OF THE AO HOLDING T HAT IF THERE WAS DIFFERENCE IN PRICES OF UNITS OF POWER SUPPLIED TO THE ELECTRICITY BOARD AND TO T HE ASSESSEES OWN MANUFACTURING ESTABLISHMENT AO COULD TAKE MARKET VALUE I.E. THE RATE AT WHICH P OWER WAS SUPPLIED TO THE STATE ELECTRICITY BOARD.IN THAT MATTER THE ASSESSEE HAD SOLD POWER @ RS.3.72 AND RS.2.32 PER UNIT TO HIS OWN CAPTIVE DIVISION AND THE STATE ELECTRICITY BOARD R ESPECTIVELY.DECIDING THE APPEAL IN FAVOUR OF THE ASSESSEE,TRIBUNAL HELD AS UNDER : WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES ON THIS ASPECT.THE CRUX OF THE DISPUTE BEFORE US RELATES TO THE MANNER OF COMPUTING PROFITS OF THE UNDERTAKINGS OF THE ASSESSEE ENGAGED IN GENERATION OF POWER FOR THE PURPOSES OF RELIEF 4 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. UNDER SECT/ON 801A OF THE ACT.THE DIFFERENCE BETWEE N THE ASSESSEE AND THE REVENUE WITH REGARD TO THE DETERMINATION OF THE MARKET VALUE OF POWER SO AS TO RECORD THE INCOME ACCRUED TO THE ASSESSEE ON SUPPLIES MADE TO ITS OWN MANUFACTURING UNITS.AS NOTED EARLIER, IN THIS CASE, THE ASSESSEE HAS UTILIZED THE POWER G ENERATED FOR ITS CAPTIVE CONSUMPTION BY WAY OF SUPPLIES TO ITS OTHER MANUFACTURING UNITS A ND A/SO FOR THE STATE ELECTRICITY BOARD. THE DISPUTE ESSENTIALLY RELATES TO THE MECHANISM OF SECTION 80IA(8) OF THE ACT. SECTION 80- IA(5) PROVIDES THAT WHERE AN ASSESSEE, WHICH IS ELI GIBLE FOR SECTION 80IA BENEFITS, TRANSFERS ITS GOODS OR SERVICES TO A BUSINESS OTHER THAN THE ELIGIBLE BUSINESS THE CONSIDERATION IF ANY, RECORDED OR SUCH TRANSFER IN THE ACCOUNTS OF THE EL IGIBLE BUSINESS SHOULD CORRESPOND TO THE MARKET VALUE OF SUCH GOODS OR SERVICES.THE SAID SEC TION AUTHORIZES THE ASSESSING OFFICER THAT WHERE THE TRANSFER AS RECORDED IN THE ACCOUNTS OF THE ELIGIBLE BUSINESS DOES NOT CORRESPOND TO THE MARKET VALUE, THE PROFITS DECLARE D OF THE ELIGIBLE BUSINESS CAN BE ADJUSTED BY THE ASSESSING OFFICER ON SUCH BASIS ENS URE THAT GOODS OR SERVICES TRANSFERRED TO ITS OWN UNIT IS DONE AT THE MARKET BLUE OF SUCH GOODS OR SERVICES.OSTENSIBLY, IN THIS CASE, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE C ONSIDERATION FOR TRANSFER OF POWER FOR CAPTIVE CONSUMPTION TO OTHER UNITS HAS BEEN REC ORDED AT A CONSIDERATION WHICH DOES NOT CORRESPOND TO ITS MARKET VALUE.ACCORDING TO THE ASSESSING OFFICER THE CONSIDERATION HAS BEEN RECORDED AT A PRICE HIGHER THAN THE MARKET VALUE, IN OTHER WORDS, THE ASSESSING OFFICER DOES NOT PERCEIVE RS 3.72 PER UNIT AS THE MARKET VALUE OF THE POWER GENERATED BY THE ASSESSEE AND INSTEAD ADOPTS RS 2.32 PER UNIT AS THE MARKET VALUE, BEING THE PRICE AT WHICH THE ASSESSEE SELLS POWER TO THE BOARD. 13.BEFORE WE PROCEED FURTHER, IT IS ALSO RELEVANT T O UNDERSTAND THE IMPLICATIONS OF THE EXPRESSION MARKET VALUE AS APPEARING IN SECTION 8 0IA(8) OF THE ACT. IN THE EXPLANATION BELOW SECTION 80 IA(8),IT IS PROVIDED THAT THE EXPR ESSION MARKET VALUE FOR THE PURPOSES OF THE SUB-SECTION MEANS THE PRICE THAT SUCH GOODS OR SERVICES WOULD ORDINARILY FETCH IN THE OPEN MARKET, IN THE ABOVE CONTEXT,IT THEREFORE BECO MES IMPORTANT FOR US TO CONSIDER AS TO WHETHER THE PRICE CHARGED BY THE ASSESSEE FOR POWER SUPPLIED TO ITS OWN MANUFACTURING UNITS AT THE RATE OF 3.72 PER UNIT CAN BE SAID TO BE CONSTITUTING A MARKET VA LUE OF ITS GOODS, NAMELY, POWER. 14, IN THE ADVANCED LAW LEXICON BY P RAMANATHA AIYA R, 3RD EDITION, 2005, THE MARKET PRICE OR MARKET VALUE HAS BEEN DEFINED AS BELOW: - MARKET PRICE OR VALUE- THE PRICE FIXED BY BUYER AN D SELLER IN AN OPEN MARKET IN THE USUAL AND ORDINARY COURSE OF LAWFUL TRADE AND COMPETITION; THE PRICE OR VALUE OF THE ARTICLE ESTABLISHED OR SHOWN BY SALES, PUBLIC OR PRIVATE, I N THE ORDINARY WAY OF BUSINESS; THE FAIR VALUE OF THE PROPERTY AS BETWEEN ONE WHO DESIRES TO PURCHSE AND ONE WHO DESIRES TO SELL; THE CURRENT PRICE. SIMILARLY, IN THE CASE OF ORCHARD V SIMPSON (1857) 2 CBNS 299, THE PHRASE MARKET VALUE IN CONTRACT FOR THE SALE OF GOODS HAS BEEN U NDERSTOOD TO MEAN THE PRICE IN THE MARKET TO AN ORDINARY CONSUMER, IRRESPECTIVE OF THE PARTICULAR CONTRACT. SIMILARLY, IN LAW LEXICON BY P RAMANATHA AIYAR, WIT H REFERENCE TO U.S. VS CERTAIN: PROPERTY IN BOROUGH OF MANHATTAN, CITY COUNTY AND S TATE OF NEW YORK, ACANY, 403 F.D800, 802, IT HAS BEEN EXPLAINED THAT THE MARKET VALUE OF AN ARTICLE OR PIECE OF PROPERTY IS THE PRICE WHICH IT MIGHT BE EXPECTED TO BRING IF OFFERED FOR SALE IN A FAIR MARKET; NOT THE PRICE WHICH MIGHT BE OBTAINED ON A SALE AT PUBLIC A UCTION OR A SALE FORCED BY THE NECESSITIES OF THE OWNER BUT SUCH A PRICE AS WOULD BE FIXED BY NEGOTIATION AND MUTUAL AGREEMENT, AFTER AMPLE TIME TO FIND A PURCHASER, AS BETWEEN A VENDOR WHO IS WILL (BUT NOT COMPELLED) TO SELL AND A PURCHASER WHO DESIRES TO B UY BUT IS NOT COMPELLED TO TAKE THE PARTICULAR ARTICLE OR PIECE PROPERTY. 15.THEREFORE,FROM THE AFORESAID, IT CAN DEDUCED THA T MARKET VALUE IS AN EXPRESSION WHICH DENOTES A PRICE ARRIVED AT BETWEEN THE BUYERS AND T HE SELLER IN THE OPEN MARKET WHEREIN THE TRANSACTIONS TAKE PLACE IN THE NORMAL COURSE OF TRADING AND COMPETITION IN CONTRAST TO 5 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. A SITUATION WHERE THE PRICE IS FIXED BETWEEN A BUYE R AND A SELLER IN A NEGOTIATION DONE UNDER THE SHADOW OF LEGISLATIVELY MANDATED COMPULSI ON. IN CASE OF THE FORMER, THE PRICE FIXED BETWEEN THE BUYER AND SELLER CAN BE UNDERSTOO D AS DENOTING MARKET PRICE SINCE THE ELEMENTS OF TRADING AND COMPETITION EXIST. WHEREAS IN THE CASE OF THE LATTER SITUATION, ON, THE PRICE FIXED BETWEEN THE BUYER AND SELLER CANNOT BE UNDERSTOOD AS DENOTING THE MARKET PRICE SINCE THE ELEMENTS OF TRADE AND COMPETITION A RE CONSPICUOUS BY THE ABSENCE. 16. TO UNDERSTAND THE CONTRASTING SITUATIONS, LET U S ANALYZE THE SITUATION ON HAND. IN THIS CASE, THE ASSESSEE RECEIVED CONSENT UNDER SECTION 4 4A OF THE ELECTRICITY(SUPPLY)ACT,1948 TO ESTABLISH AND OPERATE THE CAPTIVE POWER PLANT IN TE RMS OF A POWER PURCHASE-CUM-WHEELING OF POWER AGREEMENT DATED 15.7.1999 ENTERED BETWEEN THE STATE ELECTRICITY BOARD AND THE ASSESSEE. A COPY OF THE SAID AGREEMENT HAS BEEN PLA CED IN THE PAPER BOOK. NOW, IN TERMS OF THE ELECTRICITY (SUPPLY) ACT, 1948, THE LEGISLAT URE HAS PUT RESTRICTIONS ON ESTABLISHMENT OF POWER GENERATING UNITS AND THEIR FUNCTIONING. TH E POWER GENERATING UNITS ARE ALLOWED TO USE POWER FOR CAPTIVE CONSUMPTION AND THE SURPLU S AVAILABLE, IF ANY, IS TO BE SOLD TRANSFERRED TO THE STATE ELECTRICITY BOARDS. SECTIO N 43 OF THE ELECTRICITY (SUPPLY) ACT, 1948 ONLY AUTHORIZES, THE STATE ELECTRICITY BOARD TO ENT ER INTO ARRANGEMENTS FOR PURCHASE AND SALE OF ELECTRICITY UNDER CERTAIN CONDITIONS, SECTI ON 43A OF THE ELECTRICITY (SUPPLY) ACT, 1948 ALSO LAYS DOWN RULES AND CONDITIONS FOR DETERM INING THE TARIFF FOR THE SALE OF ELECTRICITY BY A GENERATING COMPANY TO THE STATE EL ECTRICITY BOARDS. A PERUSAL OF THE SAME REVEALS THAT THE TARIFF IS DETERMINED ON THE BASIS OF VARIOUS PARAMETERS CONTAINED THEREIN. FROM THE AFORESAID, IT IS EVIDENT THAT ON ONE HAND IT IS ONLY UPON GRANTING OF SPECIFIC CONSENT THAT A PRIVATE PERSON CAN SET UP A POWER GE NERATING UNIT HAVING RESTRICTIONS ON THE USE OF POWER GENERATED AND AT THE SAME TIME THE TAR IFF AT WHICH A POWER GENERATING UNIT CAN SUPPLY POWER TO ELECTRICITY BOARD IS ALSO LIABL E TO BE DETERMINED IN ACCORDANCE WITH THE STATUTORY REQUIREMENTS. IN THIS CONTEXT IT CAN BE SAFELY DEDUCED THAT DETERMINATION OF TARIFF BETWEEN THE ASSESSEE AND THE BOARD CAN BE SA ID TO BE AN EXERCISE BETWEEN A BUYER AND SELLER NEITHER IN A COMPETITIVE ENVIRONMENT AND NOR IN THE ORDINARY COURSE OF TRADE AND BUSINESS, IT IS AN ENVIRONMENT WHERE ONE OF THE PLAYERS HAS THE COMPULSIVE LEGISLATIVE MANDATE NOT ONLY IN THE REALM OF ENFORCING BUYING B UT ALSO TO SET THE BUYING TARIFF IN TERMS OF PRESET STATUTORY GUIDELINES. THEREFORE, THE PRIC E DETERMINED IN SUCH A SCENARIO CANNOT BE EQUATED WITH A SITUATION WHERE THE PRICE IS DETE RMINED IN THE NORMAL COURSE OF TRADE AND COMPETITION. THEREFORE, THE PRICE DETERMINED AS PER THE POWER PURCHASE AGREEMENT CANNOT BE EQUATED WITH MARKET VALUE AS UNDERSTOOD I N COMMON PARLANCE. WE SEE NO REASON FOR NOT HOLDING SO FOR THE PURPOSES OF SECTI ON 80IA(8) ALSO. 17. IN THIS BACKGROUND, WE MAY MAKE A GAINFUL REFER ENCE TO THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS MANMATHA NATH MUKHERJEE [1958] 34 ITR 567, WHICH HAS BEEN RELIED ON BY THE ASSESSEE BEFORE US. THE ISSUE BEFORE THE HONBLE CALCUTTA HIGH COURT WAS IN THE CONTEXT OF THE BENGAL AGRICUL TURAL INCOME-TAX ACT, 1944. SHORN OF OTHER DETAILS, THE QUESTION CONSIDERED BY THE HONB LE HIGH COURT, RELEVANT FOR THE PRESENT, WAS THE PROCUREMENT RATE OF PADDY OFFERED BY THE ST ATE COULD BE CONSIDERED TO BE THE MARKET VALUE OF PADDY. IN THIS BACKGROUND, THE FOLL OWING OBSERVATIONS OF THE HONBLE HIGH COURT ARE WORTHY OF NOTICE:- A MARKET CONNOTES FREEDOM OF BARGAIN. THERE MAY BE A MARKET, COMPLETELY CIRCUMSCRIBED AS REGARDS THE RATES BY PRICE CONTROL , BUT WITH/N THE LIMIT SET BY THE RELEVANT RULE OR ORDER, THE AREA OF OPERATION WOULD STILL BE A COMMERCIALLY FREE AREA. EVEN WHERE A CONTROL PRICE IS FIXED, IT IS GENERALLY THE CEILING WHICH IS FIXED AND NOT AN IN VARIABLE PRICE. BE THAT IT MAY, TO SAY THAT WHEN AGENTS OF THE STAT E SEIZE PADDY GROWN BY SUBJECTS UNDER THE AUTHORITY OF SOME LAW OR REGULATION AND PAY FOR IT AT SOME RATE FIXED BY THEMSELVES AND MUCH BELOW THE RATE IN THE OPEN MARKET, THEY CREATE A REGULATED OR ANY KIND OF MARKET AT ALL, IS IF I MAY BE PERMITTED TO USE THE STRONG EXP RESSION, A MISUSE OF LANGUAGE.THE TRIBUNAL EVEN SPEAK OF THE PERSONS WHOSE PADDY IS S EIZED AS OPERATING IN THE REGULATED 6 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. MARKET.HOW ANY PERSON WHO IS SEIZED BY THE NECK AND COMPELLED TO DELIVER HIS PADDY AND THEN DISMISSED WITH A TRIVIAL SUM AS ITS PRICE CAN BE SAID TO OPERATE IN THE MARKET IS BEYOND MY COMPREHENSION. FROM THE AFORESAID, AN ANALOGY THAT CAN BE SAFELY D EDUCED IS THAT THE MARKET VALUE CANNOT BE THE RESULT OF A TRANSACTION WHICH HAS BEEN ENTER ED INTO BETWEEN A BUYER AND A SELLER IN A SITUATION WHERE ONE OF THE PARTIES IS CARRYING TH E COMPULSIVE MANDATE OF THE LEGISLATURE. THE SITUATION BEFORE US IS SUCH WHERE THE AFORESAID ANALOGY CAN BE USEFULLY APPLIED. AS WE HAVE SEEN EARLIER, THE PRICE AT WHICH THE POWER IS SUPPLIED BY THE ASSESSEE TO THE BOARD IS DETERMINED ENTIRELY BY THE BOARD IN TERMS OF THE ST ATUTORY REGULATIONS. SUCH A PRICE CANNOT BE EQUATED WITH THE MARKET VALUE AS UNDERSTOOD FOR THE PURPOSES OF SECTION 80IA(8) OF THE ACT. THE STAND OF THE REVENUE TO THE AFORESAID EFFE CT CANNOT BE APPROVED. 18.HAVING HELD SO,THE NATURAL COROLLARY IS TO ASCER TAIN WHETHER THE PRICE RECORDED BY THE ASSESSEE AT PS 3.72 PER UNIT CAN BE CONSIDERED TO B E THE MARKET VALUE FOR THE PURPOSES OF SECTION 801A(8) OF THE ACT.THE ANSWER, TO OUR MIND, IS IN THE AFFIRMATIVE. THIS IS FOR THE REASON THAT THE ASSESSEE AS AN INDUSTRIAL CONSUMER IS ALSO BUYING POWER FROM THE BOARD AND THE BOARD SUPPLIES SUCH POWER AT THE RATE OF PS 3.72 PER UNIT TO ITS CONSUMERS.THIS IS THE PRICE AT WHICH THE CONSUMERS ARE ABLE TO PROCUR E THE POWER.WE MAY CONSIDER HYPOTHETICAL SITUATION AS WELL.HAD THE ASSESSEE NOT BEEN SADDLED WITH RESTRICTIONS OF SUPPLYING SURPLUS POWER TO THE STATE ELECTRICITY BO ARD,IT WOULD HAVE SUPPLIED POWER TO THE STATE ELECTRICITY BOARD, IT WOULD HAVE SUPPLIED POW ER TO THE ULTIMATE CONSUMERS AT RATES SIMILAR TO THOSE OF THE BOARD OR SUCH OTHER COMPETI TIVE RATES, MEANING THEREBY THAT PRICE RECEIVED BY THE ASSESSEE WOULD BE IN THE VICINITY O F PS 3.72 PER UNIT I.E. CHARGED BY THE BOARD FROM ITS INDUSTRIAL CONSUMERS/USERS. THUS, UN DER THE GIVEN CIRCUMSTANCES, IT WOULD BE IN THE FITNESS OF THINGS TO HOLD THAT THE CONSID ERATION RECORDED BY THE ASSESSEES UNDERTAKING GENERATING ECLECTIC POWER FOR CAPTIVE C ONSUMPTION AT THE RATE OF PS 3.72 PER UNIT CORRESPONDS TO THE MARKET VALUE OF POWER. THER EFORE, ON THIS ASPECT, WE UPHOLD THE STAND OF THE ASSESSEE AND POWER.THEREFORE, ON THIS ASPECT,WE UPHOLD THE STAND OF THE ASSESSEE AND POWER. THEREFORE, ON THIS ASPECT, WE U PHOLD THE STAND OF THE ASSESSEE AND SET ASIDE ORDER OF THE CIT (A) AND DIRECT THE ASSESSING OFFICER TO ALLOW RELIEF TO THE ASSESSEE UNDER SECTION 801A AS CLAIMED.ASSESSEE SUCCEEDS ON THIS GROUND. 2.3.B. HERE WE WOULD ALSO LIKE TO MENTION THAT THE REVISIO NARY PROCEEDINGS INITIATED BY THE CIT U/S. 263 OF THE ACT,FOR THE EARLIER THREE AYS.,WERE CHAL LENGED BEFORE THE TRIBUNAL WHERE SIMILAR ISSUE WAS INVOLVED.CIT WAS OF THE OPINION THAT AO SHOULD HAVE TAKEN PRICE OF THE POWER UNIT AT WHICH ASSESSEE HAD SUPPLIED POWER TO THE STATE ELECTRICIT Y BOARD.TRIBUNAL,WHILE ALLOWING THE APPEAL FILED BY THE ASSESSEE HELD THAT THE COMMISSIONER DI D NOT DISPUTE THAT THE STAND OF THE ASSESSEE I.E. THE PRICE AT WHICH ELECTRICITY SALE WAS TO BE TAKEN INTO ACCOUNT WAS THE PRICE AT WHICH STATE ELECTRICITY BOARD WAS SELLING ELECTRICITY TO ITS C ONSUMERS,WAS SUPPORTED BY A DECISION OF THE CO- ORDINATE BENCH IN THE CASE OF JINDAL STEEL & POWER LTD (SUPRA),THAT THE COMMISSIONER DID NOT AGREE WITH THE VIEW SO TAKEN BY THE CO-ORDINATE BEN CH, HAT THE VIEW ADOPTED BY THE ASSESSEE, WHICH WAS SOUGHT TO BE DISTURBED BY THE IMPUGNED RE VISION ORDER, WAS NOT ONLY A POSSIBLE VIEW OF THE MATTER BUT IT WAS A VIEW WHICH HAD BEEN APPROVE D BY A CO-ORDINATE BENCH OF THE TRIBUNAL. REFERRING TO THE DECISION OF THE HONBLE SUPREME CO URT DELIVERED IN THE CASE OF MALABAR INDUSTRIAL CO.LTD.(243 ITR83),TRIBUNAL HELD THAT WH ERE TWO VIEWS WERE POSSIBLE AND THE ITO (I.E. AO)HAD TAKEN ONE VIEW WITH WHICH CIT DID NOT AGREE, IT COULD NOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE, U NLESS THE VIEW TAKEN BY THE ITO WAS UNSUSTAIN - ABLE IN LAW,TRIBUNAL FURTHER RELIED UPON THE ORDER OF MAX INDIA LTD (295 ITR 282) DELIVERED BY THE HONBLE SUPREME COURT WHERE THE SAME PROPOSITIO N WAS REITERATED AGAIN.IT WAS FURTHER HELD THAT FACTS OF THE PRESENT CASE DID NOT INDICATE THA T VIEW TAKEN BY THE AO WAS NOT ONE OF THE POSSIBLE VIEWS,THAT THE STAND SO TAKEN WAS LEGALLY CORRECT,THAT THE VERY FOUNDATION OF EXERCISE CONDUCTED BY THE CIT WAS DEVOID OF LEGALLY SUSTAINA BLE BASIS,THAT THE ASSESSEE HAD INVITED HIS 7 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. ATTENTIONS TO VARIOUS OTHER DECISIONS OF CO-ORDINAT E BENCHES HOLDING THE SAME PROPOSITION,AS WAS LAID DOWN BY THE CO-ORDINATE BENCH IN THE CASE OF J INDAL STEEL & POWER LTD. (SUPRA), BUT HE SIMPLY BRUSHED THEM ASIDE AND HELD THAT THESE CASES WERE DISTINGUISHABLE ON FACTS,THAT THERE WAS NOT WHISPER OF A REASON AS TO WHAT ARE THE DISTINGUISHI NG FACTORS, BUT YET CIT REFUSED TO BE GUIDED BY THE SAME. TRIBUNAL DISCUSSED THE MATTER ON MERITS A LSO AND HELD THAT EVEN ON MERITS THE CIT WAS INCORRECT IN DOING SO,THAT IN THE CASE OF WEST COAS T PAPER MILLS LTD VS ACIT (103 ITD 19 @ 37), THE CO-ORDINATE BENCH HAS OBSERVED THAT THE CIT(A) HAD COME TO A REASONABLE CONCLUSION THAT THE TRANSFER PRICE (OF ELECTRICITY) SHOULD BE TAKEN ON THE BASIS OF AVERAGE PRICE PAID BY THE ASSESSEE DURING THE WHOLE YEAR TO KSEB MINUS CERTAIN EXTRANE OUS CHARGES LIKE ELECTRICITY, DUTY ETC WHICH WAS NOT CONNECTED WITH THE BUSINESS OF THE ASSESSEE ,THAT THE BENCH WAS UNABLE TO UNDERSTAND HOW THAT PROPOSITION WAS DISTINGUISHABLE ON FACTS. IN PARA 9 (PG.7) OF THE ORDER TRIBUNAL HAS HELD AS UNDER : 9.LEARNED DR HAS ADDRESSED LENGTH ON CORRECTNESS OF APPROACH ADOPTED BY LEARNED CIT, ON MERITS. HE SUBMITS THAT THE LEARNED CIT MAY NOT SHARE PERCEPTION OF THE CO-ORDINATE BENCHES BUT THE EXERCISE SO CONDUCTED BY HIM CONSTI TUTES LOGICAL THINKING AND IS FULLY JUSTIFIABLE ON MERITS. THAT ASPECT OF THE MATTER, H OWEVER, IS NOT RELEVANT AT THIS STAGE. ONCE WE COME TO THE CONCLUSION THAT THE STAND OF THE ASS ESSEE, WHICH IS SOUGHT TO BE DISTURBED BY THE IMPUGNED REVISION ORDER, IS A POSSIBLE VIEW OF THE MATTER AND IT IS NOT SUSTAINABLE IN LAW, WE HAVE TO CONCLUDE THAT LEARNED COMMISSIONER INDEED ERRED IN ASSUMING JURISDICTION U/S 263 ON THE FACTS OF THIS CASE. THA T APART, EVEN ON MERITS, RESPECTFULLY FOLLOWING CO-ORDINATE BENCHES, WE HAVE TO HOLD THAT LEARNED COMMISSIONER ERRED IN CONCLUDING THAT THE TRANSFER PRICE OF ELECTRICITY I S TO BE TAKEN AT THE PRICE AT WHICH ELECTRICITY IS SOLD TO THE STATE ELECTRICITY BOARD SELLS THE SAME TO ITS CONSUMERS. IN OUR CONSIDERED VIEW, THE PRICE AT WHICH STATE ELECTRICI TY BOARD SELLS ELECTRICITY TO ITS CONSUMERS IS TRUE INDICATOR OF ITS MARKET PRICE AS REQUIRED TO BE TAKEN INTO ACCOUNT IN TERMS OF THE PROVISIONS OF SECTION 80IA(8). FROM ABOVE IT IS CLEAR THAT MATTER WAS DECIDED IN F AVOUR OF THE ASSESSEE ON MERITS BY THE TRIBUNAL.AS STATED EARLIER,ORDER OF THE FAA IN THE CASE OF JINDAL STEEL & POWER LTD (SUPRA) HAS BEEN REVERSED BY THE TRIBUNAL WHEREIN IDENTICAL ISS UE WAS INVOLVED.BESIDES,SIMILAR ISSUE HAD BEEN DECIDED AGAINST THE DEPARTMENT BY THE HONBLE CHHAT TISGARH HIGH COURT IN THE MATTER OF GODAVARI POWER AND ISPAT LTD.OTHER CASES RELIED UPON BY THE ASSESSEE ALSO SUPPORT THE STAND TAKEN BY THE FAA.THEREFORE,IF SHE HAD FOLLOWED THE ORDERS OF THE TRIBUNAL FOR THE EARLIER ASSESSMENT YEAR IN RESPECT OF PROCEEDINGS INITIATED U/S.263 OF THE ACT ,IN OUR OPINION SHE HAS CHOSEN A LEGAL,JUST AND REASONABLE PATH.CONFIRMING THE ORDERS OF THE FAA,WE DECIDE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. APPEAL FILED BY THE AO STANDS DISMISSED. ITA/253/NAG/2012-AY. 2008-09 4. ASSESSEE FILED ITS RETURN OF INCOME ON 29.09.2008 D ECLARING INCOME OF RS.61,05,36,700/-.AO FINALISED THE ASSESSMENT ON 31.03.2008 DETERMINING INCOME OF THE ASSESSEE AT RS1,03,44,10,450/-. FIRST GROUND OF APPEAL IS ABOUT DISALLOWANCE OF 80I A DEDUCTION BY THE FAA.DURING THE ASSESSMENT PROCEEDINGS,HE FOUND THAT ASSESSEE HAD C LAIMED A DEDUCTION OF RS.68,48,02,138/- U/S.80IA OF THE ACT.AO HELD THAT AVERAGE RATE CHARG ED BY THE ASSESSEE FROM THE OUTSIDERS WAS RS. 2.10, WHEREAS IT HAS CHARGED RS.3.25 PER UNIT FROM ITS OWN DIVISION,THAT IT HAD MANIPULATED THE RATES AND ACCOUNTS TO INFLATE THE PROFIT OF THE OF THE POWER UNIT WHOSE INCOME WAS EXEMPT,THAT IT HAD REDUCED THE PROFIT OF FERRO ALLOYS DIVISION WHO SE INCOME WAS TAXABLE.HE REWORKED THE EXEMPTION U/S.80IA. 4.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA.AFTER C ONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ASSESSMENT ORDER,HE REFERRED TO THE PR OVISIONS OF THE CENTRAL ELECTRICITY ACT AND PROVISIONS OF SECTION 80IA(5)OF THE ACT.FINALLY,HE UPHELD THE ORDER OF THE AO.ABOUT THE ORDERS 8 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. PASSED BY THE TRIBUNAL,HE STATED THAT THE QUESTION BEFORE THE ITAT WAS LEGALITY OF PROCEEDINGS CARRIED OUT U/S. 263 OF THE ACT,THAT THE TRIBUNAL H AD NOT DECIDED THE ISSUE OF SALE PRICE OF PRICE OF POWER. 4.2. BEFORE US,AR MADE THE SAME SUBMISSIONS AS WERE MADE FOR THE EARLIER YEAR.DR SUPPORTED THE ORDER OF THE FAA.WE HAVE HEARD THE RIVAL SUBMISSION S AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT,WHILE DECIDING THE APPEALS FILED AGAINST THE ORDER OF THE CIT PASSED U/S.263 OF THE ACT, TRIBUNAL HAS DISCUSSED THE MERITS OF THE CASE AT PA RAGRAPH 8 OF THE ORDER.IT HAS SPECIFICALLY MENTIONED THE CASES OF JINDAL STEEL AND POWER LTD.( SUPRA)AND WEST COAST PAPER MILLS LTD.(103 ITD19) AND VARIOUS OTHER DECISIONS OF CO-ORDINATE BENCHES. WHILE DECIDING THE ISSUE AGAINST THE AO FOR THE LAS T AY.AT PARAGRAPHS NO. 2.3.,2.3.A AND 2.3.B.,WE HAVE RELIED UPON THE DECISIONS OF THE TRIBUNAL AND THE HONBLE CHHATISGARH HIGH COURT. RESPECTFULLY,FOLLOWING THE SAID DECISIONS WE REVERS E THE ORDER OF THE FAA AND DECIDE GROUND NOS.1 TO 3 IN FAVOUR OF THE ASSESSEE. 5 .NEXT GROUND OF APPEAL IS ABOUT DISALLOWANCE OF RS. 1,00,000 PAID TO ARRIVE AT A SETTLEMENT OF DISPUTE UNDER THE PROVISIONS OF FACTORIES ACT.DURIN G THE ASSESSMENT PROCEEDINGS AO FOUND THAT THE ASSESSEE HAD PAID AN AMOUNT OF RS.1,00,000/- TO TWO WORKERS WHO HAD MADE AN ACCIDENT.AO WAS OF THE OPINION THAT SAID PAYMENT WAS MADE AS A PENALTY FOR INFRINGEMENT OF LAW,THAT THE EXPENDITURE WAS NOT ALLOWABLE U/S.37(1) OF THE ACT. IN THE APPELLATE PROCEEDINGS,FAA HELD THAT PAYMENTS WERE MADE IN LIEU OF THE VIOLATION OF THE FACTORY ACT THAT RESULTED IN TO FATAL ACCIDENTS,THAT SUBMISSION OF THE ASSESSEE THAT THER E WAS NO INFRINGEMENT OF LAW WAS NOT ACCEPTABLE.HE UPHELD THE ORDER OF THE AO 5.1 .BEFORE US,AR SUBMITTED THAT AMOUNT IN QUESTION WAS NOT PAID AS PENALTY BUT TO PROTECT THE OFFICER OF THE COMPANY,THAT THERE WAS NO VIOLATION OF THE FACTORY ACT,THAT THE AMOUNT WAS AN ADMISSIBLE BUSINESS EXPENDITURE,THAT SETTLEMENT MAD E WITH THE WORKERS CANNOT BE EQUATED WITH PAYMENT OF PENALTY.DR SUPPORTED THE ORDER OF THE FA A. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD.WE FIND THAT THE AO OR THE FAA HAS NOT MENTIONED THE PENAL PROVISIONS OF T HE FACTORY ACT THAT WERE VIOLATED BY THE ASSESSEE, THAT THEY HAVE NOT DISCUSSED ANYTHING ABO UT THE PENALTY ORDER PASSED BY THE LABOUR LAW AUTHORITIES. IN ABSENCE OF THE BASIC FACT OF PAYMEN T OF PENALTY BY THE ASSESSEE,IT CANNOT BE HELD THAT THERE WAS INFRINGEMENT OF LAW.PAYMENT MADE TO THE WORKERS WHO HAD MET AN ACCIDENT CANNOT BE TERMED PENALTY.THEREFORE,TREATING IT AN ALLOWABL E BUSINESS EXPENDITURE,WE DECIDE GROUND NO.4 IN FAVOUR OF THE ASSESSEE. 5.2 THE LAST GROUND OF APPEAL RELATES TO CHARGING OF IN TEREST U/SECTIONS 234B AND 234C OF THE ACT. THIS GROUND IS STATED TO BE CONSEQUENTIAL IN NATURE , AND HENCE WE DIRECT THE A.O. TO GIVE RELIEF TO THE ASSESSEE IN ACCORDANCE WITH LAW. AS A RESULT,APPEAL FILED BY THE AO FOR THE AY.2007- 08 STANDS DISALLOWED AND APPEAL OF THE ASSESSEE-COMPANY FOR THE AY.2008-09 STANDS ALLOWED . 5 /6 #5/ 0 7 .. 2007-08 ! 2 ? '@ ' / A B #5/ ..2008-09 '@ ' / A. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2014. 2!3 1* ! ( 3 QJ QJQJ QJ 0 , 2014 . SD/- SD/- (H.L.KARWA/ % %% % . . ) ( '!() '!() '!() '!() / RAJENDRA) PRESIDENT/ '& ! ! ! ! 24 24 24 24 /ACCOUNTANT MEMBER 9 ITA NOS. 71/NAG/2011 & 253/NAG/2012 M/S SARDA ENERGY & MINERALS LTD. / MUMBAI, 2 /DATE: 03.02.2014 SK 2!3 2!3 2!3 2!3 -/ -/ -/ -/ D!*/ D!*/ D!*/ D!*/ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / +, 2. RESPONDENT / -.+, 3. THE CONCERNED CIT(A)/ E F , 4. THE CONCERNED CIT / E F 5. DR ITAT,NAGPUR BENCH/ G -/ , . . ( . - . 6. GUARD FILE/ # H . . / -/ //TRUE COPY// 2!3 / BY ORDER, I / ' DY./ASST. REGISTRAR , /ITAT, MUMBAI.