INCOME TAX ACT, 1961

Section 80-IA(4)

Deduction under section 80-IA - Allowability - Income from sale of vapour -

Assessee-company claimed deduction under section 80-IA(4) on account of operation of captive power plant. AO disallowed the said deduction in respect of income from sale of vapour alleging that the vapour does not fall within the meaning of power. Assessee contended that the steam is also a form of power. However, AO did not agree with the assessee and stated that steam is not generation of power and profit was not derived from industrial undertaking because the deduction under section 80-IA(4) was meant for the generation and distribution of power. Held: In view of various decisions of Tribunal, generation of steam is also a form of power. Therefore, the assessee would be entitled to claim deduction under section 80-IA(4) in respect of income from sale of vapour.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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