The Cuttack Bench of Income Tax Appellate Tribunal ( ITAT ) has disallowed deduction u/s 80 IA since income from eligible unit not shown in gross total income.
The appellant, Tata Sponge IronLimited, is engaged in the business of manufacturing and sale of sponge iron.It has also installed a power plant to produce LCD basing on the hot gas emitted from the furnace used in the Sponge Iron Smelter plant.
During the course of scrutiny assessment AO finds thatthe assessee has not shown the income derived by it from the power plant unit in the gross total income filed for taxation purposes. The AO disallowed the claim made by the assessee u/s.80IA of the I.T.Act and CIT (A) confirmed the disallowance. Aggrieved assessee filed appeal before ITAT.
The counsel for the appellant submitted that has valued the power produced by the power plant at the rate on which the power is being supplied by the State Electricity Board which is not disputed by the lower authorities and therefore the claim made u/s.80IA is correct and the denial of such deduction of the assessee by the Departmental Authorities is not proper and justified.
The Tribunal observed that income from power plant is not shown in the total income of the assessee. The fundamental requirement ofshowing the income from “eligible” unit in the gross total income is mandatory, which was not complied by the assessee in order to claim deduction u/s.80IA of the amount equal to the income generated bythe eligible unit.
The Coram of K.K.Gupta, AM and Mr. K.S.S.Prasad Rao, JM has held that “we are of the considered view that the rejection of the claim of the assessee u/s.80IA is justified in the facts and circumstances narrated in detail in the impugned orders of the Departmental Authorities”.
Mr. N.P.Jain and Smt. Paramita Tripathy appeared on behalf of the appellant and respondent respectively.
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