Income Tax Deduction u/s 80IA of the Act available to Income from Independent Power Generation Undertaking Units for Generating Power: ITAT
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that income tax deduction under Section 80IA of the Income Tax Act should be available to income from independent power generation undertaking units for generating power. The facts of the case was that, assessee Bannari Amman is a limited company engaged in the business of manufacturing of sugar, alcohol, granite...
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that income tax deduction under Section 80IA of the Income Tax Act should be available to income from independent power generation undertaking units for generating power.
The facts of the case was that, assessee Bannari Amman is a limited company engaged in the business of manufacturing of sugar, alcohol, granite and cogeneration of power. After filing the return assessee case was selected for scrutiny. After completing the scrutiny AO passed an assessment order along with disallowing deduction under Section 80IA of the Income Tax Act for income incurred in generation of power from 5 independent power generation undertaking units.
When an appeal was filed against the order before the CIT(A), the CIT(A) allowed the appeal. Aggrieved revenue thereafter filed an appeal before the tribunal.
While the appeal proceedings going on M.Rajan, counsel appeared for the revenue submitted that since for the said amount the assessee had not generated power and had purchased it from other power units.
This amount did not represent the value of own power generation and therefore, the same shall be reduced from the claim made under Section 80IA of the Income Tax Act. Also assessee had purchased power units from the grids of TNEB & KPTC.
Further before the CIT(A), R.Vijayaraghavan, counsel for the assessee had submitted industrial co-generating units and the cost of the same has already been charged as an expenditure in the statement of profit & loss.
The tribunal, after considering the submission, observed that the “CIT(A) has rightly held that the assessee has charged the cost of imported power from TNEB & KPTCL to the Profit & Loss Account before arriving at the figure of eligible profit of the industrial undertaking for the purpose of deduction under Section 80IA of the Income Tax Act.”
Hence, the two-member bench of V. Durga Rao, (Judicial Member) and Dr. Manish Borad, (Accountant Member) allowed the appeal on ground that the assessee has claimed it an expenditure before computing income eligible for deduction under Section 80IA of the Income Tax Act.
To Read the full text of the Order CLICK HERE
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