INCOME TAX ACT, 1961,

Section 80-IA

Deduction under section 80-IA - Allowability - Allocation of husk to power generation plant -

Assessee allocated 10% of cost of total husk consumed for power plant and remaining 90% of husk costs being allocated to generation of steam by rice mill in its boiling mill unit. The assessee had computed net profits and claimed deduction under section 80-IA. AO not being satisfied with the allocation made by the assessee after going through the assessee's record comparable cases, estimated the cost of consumption @ 55% of the total husk to the power generation plant and accordingly recomputed the deduction under section 80-IA for assessment years 2012-13 to 2015-16. CIT(A) directed the AO to calculate profits and expenditure for allowing deduction under section 80-IA(iv), by adopting allocation of husk at 10% to the power generation plant. Held: Tribunal in the assessee's own case for the assessment years 2008-09 and 2009-10 considered the issue in detail and allowed the appeal of the assessee holding that allocation of husk at 10% to the power generation plant was reasonable. Therefore, the order of the CIT(A) was upheld. However, the AO had not given details of the initial assessment year in which the deduction under section 80-IA was claimed and the expiry of time limit for claiming the deduction in the assessment orders. As per the information available on record, the assessee had installed the power plant in the assessment year 2003-04 and started claiming the deduction under section 80-IA from the assessment year 2004-05. As per section 80-IA, the assessee was entitled for deduction under section 80-IA for 10 consecutive years which expired in 2014-15, whereas the assessee claimed the deduction in 2015-16 also. Thus, the AO was directed to verify and allow deduction under section 80-IA correctly for the period for which the assessee was entitled.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13 to 2015-16

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