ACIT 1(3), MUMBAI v. THE WEST COAST PAPER MILLS LTD, MUMBAI

ITA 994/MUM/2013 | 2005-2006
Pronouncement Date: 14-11-2014

Appeal Details

RSA Number 99419914 RSA 2013
Assessee PAN AAACT4179N
Bench Mumbai
Appeal Number ITA 994/MUM/2013
Duration Of Justice 1 year(s) 9 month(s) 8 day(s)
Appellant ACIT 1(3), MUMBAI
Respondent THE WEST COAST PAPER MILLS LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Department
Bench Allotted G
Tribunal Order Date 14-11-2014
Date Of Final Hearing 24-09-2014
Next Hearing Date 24-09-2014
Assessment Year 2005-2006
Appeal Filed On 05-02-2013
Judgment Text
G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI . . BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI D. KARUNAKARA RAO AM ./I.T.A. NO. 5706/M/2008 (AY:2002 - 2003 ) ./I.T.A. NO. 911/M/2013 (AY:2003 - 2004) ./I.T.A. NO. 910/M/2013 (AY:2004 - 2005) ./I.T.A. NO. 994/M/2013 (AY:2005 - 2006) ACIT - 1(3) R.NO.540 / 564 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD NEW MARINE LINES MUMBAI 400020. VS. M/S. WEST COAST PAPER MILLS LTD. SHREENIWAS HOUSE HAZARIMAL SOMANI MARG FORT MUMBAI 400 001. ./ PAN : AAACT4179N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA / RESPONDENT BY : SHRI A.C. TEJPAL CIT - DR / DATE OF HEARING : 24 .09.2014 / DATE OF PRONOUNCEMENT : 14 .11 .2014 / O R D E R PER D. KARUNAKARA RAO AM: THERE ARE 4 APPEALS UNDER CONSIDERATION. ALL THESE APPEALS ARE FILED BY THE REVENUE INVOLVING THE ASSESSMENT YEARS 2002 - 2003 TO 2005 - 2006. SINCE THE ISSUES RAISED IN ALL THESE APPEALS ARE IDENTICAL THEREFORE FOR THE SAKE OF CONVENIENCE THEY ARE CLUBBED HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS. 2. FIRSTLY WE SHALL TAKE UP THE APPEAL ITA NO.5706/M/2008 FOR THE AY 2002 - 2003 AS A LEAD APPEAL. IN THIS APPEAL REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT (A) ERRED IN DELETING THE MINIMUM PENALTY OF RS. 9 57 19 447/ - WHICH IS THE TAX ON INCOME SOUGHT TO BE E VADED BY THE ASSESSEE BY MAKING FALSE CLAIMED IN THE RETURN OF INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT (A) ERRED IN DELETING THE PENALTY LEVIED ON FALSE CLAIMS MADE BY THE ASSESSEE IN THE RETURN OF INCOME BY WAY OF I) TREATING CAPITAL EXPENDITURE AS REVENUE EXPENDITURE. II) CLAIMING I NTEREST INCURRED ON FUNDS UTILIZED FOR EARNING INTEREST FREE INCOME AS BUSINESS EXPENDITURE IN VIOLATION OF SECTION 14A. III) CLAIMING FALSE DEDUCTION U/S 80IA IV) CLAIMING FALSE DEDUCTION U/S 80JJA 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT (A) ERRED IN DELETING THE PENALTY LEVIED ON FALSE CLAIMS MADE BY THE ASSESSEE WHICH WAS DISALLOWED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT (A). 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PAPER AND PAPER BOARDS. FOR AY 2002 - 03 THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 28 39 25 143/ - AGAINST THE RETURNED INCOME OF RS. NIL . IN THE ASSESSMENT AO DISALLO WED VARIOUS CLAIMS OF DEDUCTIONS U/S S 80IA; 14A; 80JJA ; 80HHC OF THE ACT . ON APPEAL CIT (A) CONFIRMED THE SAID DISALLOWANCES V IDE HIS ORDER DATED 31.3.2006. AGAINST THE SAID ORDER OF THE CIT (A) ASSESSEE FILED AN APPEAL BEFORE THE ITAT. INTER ALIA AO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED THE PENALTY AMOUNTING TO RS.9 57 19 447/ - AS 100% OF THE TAX SOUGHT TO BE EVADED VIDE THE PENALTY ORDER DATED 28 TH MARCH 2008. AGGRIEVED WITH THE ABOVE PENALTY ORDER ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. DURING THE FIRST APPELLATE PROCEEDINGS AFTER CONSIDERING SUBMISSIONS OF THE ASSESSEE CIT (A) DIRECTED THE AO TO DELETE THE ENTIRE PENALTY VIDE HIS ORDER DATED 12.6.2008. TO SUPPORT HIS CONCLUSIONS HE RE LIED ON THE ORDER OF THE TRIBUNAL FOR THE AY S 2000 - 2001 AND 2001 - 2002. AGGRIEVED WITH THE SAID ORDER OF THE CIT (A) REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. AT THE OUTSET LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE EXTRACTED GROUND S AND MENTIONED THAT GROUND NO. 2(I) RELATES TO THE TREATMENT TO THE EXPENDITURE ON REPAIRS AND MAINTENANCE OF PLANT AND MACHINERY BUILDING AND OTHER ASSETS AS CAPITAL EXPENDITURE BY THE AO . IN THIS REGARD LD COUNSEL MENTIONED THAT AN IDENTICAL ISSUE WAS ADJUDICATED IN THE AYS 2000 - 01 AND 2001 - 02. FURTHER HE 3 FILED A COPY OF THE ORDER OF THE TRIBUNAL ON THE MERITS OF ADDITION FOR THE AY UNDER CONSIDERATION AND STATED THAT THE TRIBUNAL ALREADY GRANTED RELIEF TO THE ASSESSEE ON MERITS. HE BROUGHT OUR ATTENTION TO THE SAID ORDER OF THE TRIBUNAL ON QUANTUM APPEAL FOR T HE AY 2002 - 2003 VIDE ITA NO.3802/MUM /2006 DATED 30.5.2014 AND MENTIONED THAT THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE RELYING ON TH E OTHER ITATS ORDER FOR THE AY 2000 - 01 AND 2001 - 02 . IN THIS REGARD H E READ OUT THE RELEVANT PARAS 36 TO 44 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) DATED 30.5.2016 AND PRAYED THAT THE PENALTY IS NOT SUSTAINABLE WHEN THE RELATABLE ADDITIONS ARE DELETED BY THE TRIBUNAL. THUS HE PRAYED FOR DELETING THE PENALTY LEVIED U/S 271(1)(C) ON THIS ADDITION. 5. ON THE OTHER HAND LD DR RELIED ON THE ORDER OF THE AO. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORDER OF THE TRIBUNAL (SUPRA) DATED 30.5.2014. ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL WE FIND THE ISSUE WAS ADJUDICATED BY THE TRIBUNAL IN FAVOUR OF THE AS SESSEE ON MERITS VIDE PARAS 36 TO 44 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) AND DEL ETED THE ADDITION . CONSIDERING THE IMPORTANCE OF THE SAID PARAS 36 TO 44 THE SAME ARE EXTRACTED WHICH READ AS UNDER: 36. GROUND NO.10 11 AND 12 READ AS UNDER: 10. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN HOLDING THAT EXPENDITURE ON REPAIRS AND MAINTENANCE OF PLANT AND MACHINERY BUILDING AND OTHER ASSETS TO THE TUNE OF RS. 65 01 751/ - ARE CAPITAL EXPENDITURE. 37 .. 38 ... 39 40 .. 41 42.. 43. BEFORE US IT HAS BEEN SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2000 01 AND 2001 02 IN ITA NO.8243/MUM./ 2004 ETC. ORDER DATED 31 ST JANUARY 2007. THE RELEVANT OBSERVATIONS AND FINDINGS OF THE TRIBUNAL IN THIS REGARD ARE AS UNDER: 7. THE NEXT DISPUTE RELATES TO THE DISALLOWANCE OF EXPENDITURE IN RESPECT OF NEW BANGALORE OFFICE TAKEN ON LEASE. THE AMOUNT SO SPENT FOR A.Y. 2000 01 IS ` 36 68 591 AND FOR A.Y. 2001 02 IS ` 4 29 052. WE HAVE HEARD BOTH THE SIDES AND HAVE GONE THROUGH THE RE CORD. THE ASSESSEE HAD TAKEN OFFICE ON LEASE AND TO MAKE IT FIT FOR USE THE AFORESAID EXPENSES WERE INCURRED ON PLASTERING POLISHING FALSE CEILING ELECTRICAL FITTINGS FRESH CARPETS ETC. THESE EXPENSES WERE INCURRED ON THE ASSETS NOT OWNED BY THE ASSESS EE. THE EXPENDITURE IN QUESTION IS TO GIVE 4 A BETTER LOOK TO THE OFFICE PREMISES AND DOES NOT RESULT IN ACQUISITION OF ANY ASSET OF ENDURING NATURE. HENCE THE EXPENDITURE SO INCURRED IS DIRECTED TO BE ALLOWED AS REVENUE EXPENDITURE. WE MAY ALSO MENTION THA T DEPRECIATION IF ANY GRANTED BY THE DEPARTMENT CONSIDERING THE SAID EXPENDITURE AS CAPITAL EXPENDITURE BE WITHDRAWN. 44. IN VIEW OF THE AFORESAID FINDINGS OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2000 01 AND 2001 02 WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND ALLOW THE GROUND NO.13 RAISED BY THE ASSESSEE. 7. THUS THE ASSESSEE GOT RELIEF ON THE ISSUE IN THE QUANTUM APPEALS FOR THE AY 2002 - 03. THEREFORE THIS BEING THE PENALTY RELEVANT TO THE SAID ISSUE THE LEVY OF PENALTY IS NOT SUSTAINABLE. ACCORDINGLY THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERE NCE. ACCORDI NGLY GROUND NO. 2(I) RAISED BY THE REVENUE IS DISMISSED. 8. GROUND NO. 2 (II) RELATES TO THE DISALLOWANCE U/S 14A OF THE ACT. IN THE REGARD LD COUNSEL BROUGHT OUR ATTENTION TO THE SAID ORDER OF THE TRIBUNAL ON MERITS DATED 30.5.2014 (SUPR A) AND MENTIONED THAT THE ISSUE WAS ADJUDICATED BY THE ITAT VIDE PARAS 50 TO 55 OF THE SAID ORDER OF THE TRIBUNAL WHEREIN THE ITAT HAS REMANDED THE MATTER TO THE FILE OF THE AO. HE SUBMITTED FOR REMANDING THIS PART OF THE PENALTY ISSUE TO THE FILE OF THE AO FOR FRESH CONSIDERATION. AFTER HEARING BOTH THE PARTIES AND PERUSING THE SAID PARAGRAPHS OF THE ORDER OF THE TRIBUNAL WE REMAND THIS PART OF THE GROUND TO THE FILE OF AO FOR FRESH CONSIDERATION. ACCORDINGLY GROUND NO.2 (II) RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 9 . GROUND NO. 2(III) RELATES TO THE DISALLOWAN CE U/S 80IA A ND 80JJA OF THE ACT ON POWER UNIT NO.1 2 TO 5 AND 6A. IN THIS REGARD LD COUNSEL BROUGHT OUR ATTENTION TO THE SAID ORDER OF THE TRIBUNAL (SUPRA) AND MENTIONED THAT THE TRIBUNAL HAS DECIDED THE ISSUES VIDE PARAS 3 - 9 (UNIT NOS.2 TO 5); 11 - 23 (UNIT NO.6A) AND PARAS 71 & 72 IN RESPECT OF CLAIM U/S 80JJA ON POWER UNIT NO.6A IN FAVOUR OF THE ASSESSEE . T HEREFORE THE PENALTY LEVIED IS UNSUSTAINABLE . LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AS WELL AS THE ORDER OF THE ITAT ON QUANTUM APPEALS. 10 . ON THE OTHER HAND LD DR RELIED ON THE ORDER OF THE AO. 5 11 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES A S WELL AS THE CITED ORDER OF THE TRIBUNAL (SUPRA) ON MERITS DATED 30.5.2014. ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL WE FIND THE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE VIDE THE SAID ORDER OF THE TRIBUNAL DATED 30.5.2014 (SUPRA). IN T HIS REGARD WE FIND PARAS 8 9 23 OF THE SAID ORDER OF THE TRIBUNAL ARE RELEVANT. CONSIDERING THE IMPORTANCE OF THE SAID PARAS AS WELL AS FOR THE SAKE OF COMPLETENESS OF THIS ORDER WE FIND IT RELEVANT TO REPRODUCE THE SAID PARAS AND THEREFORE THEY ARE EXTRACTED WHICH READ AS UNDER: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE TRIBUNAL DECISIONS OF EARLIER YEARS. AS REGARDS THE CLAIM OF DEDUCTION FOR UNITS NO.2 3 4 AND 5 ARE CONCERNED WE FIND THAT THE SAME IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASE RIGHT FROM THE ASSESSMENT YEAR 1997 98 TO 2001 02 RESPECTIVELY. IN THIS YEAR THE CLAIM FOR DEDUCTION IS MAINLY WITH REGARD TO UNIT NO.3 4 AND 5 WHICH H AS ALREADY BEEN CONSIDERED BY THE TRIBUNAL ON SIMILAR SET OF FACTS AND SIMILAR REASONS GIVEN BY THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS) IN THE EARLIER YEARS. FOR THE SAKE OF READY REFERENCE THE RELEVANT FINDINGS OF THE TRIBUNAL WHICH IN TURN IS BASED ON THE EARLIER ORDER OF THE TRIBUNAL IS REPRODUCED HEREIN BELOW: 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND THAT THE ISSUE HAS BEEN ELABORATELY DISCUSSED IN PARA 6 OF THE TRIBUNAL ORDER FOR THE ASSESSMENT YEAR 1999 2000 WHI CH FOR THE SAKE OF COMPLETENESS IS REPRODUCED BELOW: 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION AND HAVE GONE THROUGH RECORDS INCLUDING THE VOLUMINOUS PAPER BOOK FILED BY THE ASSESSEE. THE ASSESSEE ALTHOUGH ENGAGED IN THE MANUFACTURE AND SALE OF PAPER AND PAPERBOARDS MULTI LAYER BOARDS ETC. WAS ALSO INTO THE BUSINESS OF POWER GENERATION RIGHT FROM THE ASSESSMENT YEAR 1996 97. THE FINDINGS IN THE IMPUGNED ORDER ARE CLEARLY UNASSAILABLE. THE ASSESSEE HAS FROM TIME TO TIME RIGHT FROM THE ASSESSMENT YEAR 1996 97 SET UP FOUR SUCH UNITS TO FACILITATE I TS POWER REQUIREMENT IN THE PAPER PLANT AT DANDELI IN KARNATAKA STATE. THE ASSESSEE AS THE RECORDS SHOW MADE SUBSTANTIAL CAPITAL OUTLAYS FOR THIS P0URPOSE. THIS ONLY CONFIRMS THAT ASSESSEE WAS IN THE BUSINESS OF GENERATION OF POWER. HNOW THE QUESTION IS WHETHER THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA OF THE ACT COULD BE DENIED MERELY O NTHE GROUND THAT THESE D.G. UNITS WERE CATERING TO THE CAPTIVE POWER REQUIREMENT. AS THE ASSESSING OFFICER PUT IT IF THE ASSESSEE HAS NOT REALIZED ANY REVENUE BY SELLING THE POWER TO OUTSIDERS CAN THE ASSESSEE BE HELD TO BE ENTITLED FOR DEDUCTION UNDER SECTION 80IA OF THE ACT? THE ASSESSING OFFICER WAS OF THE VIEW THAT IT IS ONLY AN INTER DIVISION TRANSFER AND THERE WAS NO REVENUE REALIZED BY IT AND CONSEQUENT LY THERE WAS NO DERIVATION OF PROFIT OR INCOME IN THE BUSINESS OF INDUSTRIAL UNDERTAKING. THE QUESTIONS RAISED BY THE ASSESSING OFFICER HAVE ALL BEEN ANSWERED BY THE SUPREME COURT IN THE CASE OF ORIENT PAPER MILLS LTD. 176 ITR 110. THIS DECISION OF THE SU PREME COURT DOES NOT BRING OUT THE FACTS. IT HAS ONLY AFFIRMED THE DECISION OF THE CALCUTTA HIGH COURT IN CIT V/S ORIENT PAPER MILLS LTD. 94 ITR 73. THE FACTS COULD ONLY BE FOUND IN THE JUDGMENT OF THE CALCUTTA HIGH COURT. THE ASSESSEE IN THAT CASE OWNED A PAPER MILL. IT SET UP A PLAT FOR THE MANUFACTURE OF CAUSTIC SODA AN ESSENTIAL CHEMICAL FOR USE IN THE PROCESS OF MANUFACTURE OF PAPER. THE ASSESSEE OBTAINED A SEPARATE LICENSE FOR THE MANUFACTURE OF CAUSTIC SODA AND THE PLANT WAS HOUSED IN A SEPARATE BU ILDING. THE INCOME TAX OFFICERS IN THAT CASE HELD THAT THE CAUSTIC SODA PLANT WAS ANCILLARY TO THE MAIN MANUFACTURING UNIT AND NO PART OF CAUSTIC SOLD WAS SOLD TO ANY OUTSIDER AND THEREFORE NO RELIEF COULD BE CLAIMED BY THE ASSESSEE UNDER SECTION 15C OF THE 1922 ACT. THE MATERIAL PRODUCED IN THE PLANT WAS USED FOR CAPTIVE CONSUMPTION. BEFORE THE TRIBUNAL IT WAS CONTENDED BY THE REVENUE THAT THE LANGUAGE USED IN SECTION 15C WAS PROFIT AND GAIN DERIVED FROM AN INDUSTRIAL UNDERTAKING. UNLESS THE PROFITS A ROSE BY THE SALE OF THE PRODUCT OF THE NEW PLANT NO PROFIT COULD BE SAID TO HAVE BEEN DERIVED. THE ARGUMENT WAS THAT PROFIT SHOULD BE DIRECTLY DERIVED AND NOT INDIRECTLY OR DEEMED TO BE DERIVED. THE TRIBUNAL DID NOT ACCEPT THESE SUBMISSIONS OF THE REVENUE AND PROCEEDED TO GRANT THE RELIEF. THE HON'BLE CALCUTTA HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL AND THE APEX COURT HAS DISMISSED THE APPEAL OF THE REVENUE BY TAKING SUPPORT FROM ITS OWN DECISION IN TEXTILE MACHINERY CORPORATION LTD. V/S CIT 107 IT R 195 AND CIT V/S INDIAN ALUMINIUM COMPANY LTD. V/S CIT 107 ITR 195 AND CIT V/S INDIAN ALUMINIUM COMPANY LTD. 108 ITR 367. THEREFORE THE STAND OF THE ASSESSING OFFICER CANNOT BE ACCEPTED. AGAIN THE CALCUTTA HIGH COURT WAS FACED WITH THE SAME SET OF FACT S IN THE CASE OF CIT V/S HINDUSTAN MOTORS LTD. 127 ITR 210. THE ASSESSEE IN THAT CASE WAS 6 ENGAGED INT EH MANUFACTURING OF MOTOR CARS. IT ESTABLISHED CERTAIN ANCILLARY UNITS. THE ASSESSING OFFICER REPEATED HIS FINDINGS ON THE SAME LINE AS HE DID IN THE CAS E OF ORIENT PAPER MILLS LTD. (SUPRA) AND DENIED THE RELIEF UNDER SECTION 80E OF THE 1961 ACT. THE CALCUTTA HIGH COURT HELD THAT ASSESSEE IS ENTITLED TO SUCH RELIEF IRRESPECTIVE OF WHETHER THE ANCILLARIES MANUFACTURED WERE SOLD BY THE ASSESSEE TO OUTSIDERS OR WERE USED BY ITS FOR ITS OWN MANUFACTURER OF CARS. SIMILARLY THE BOMBAY HIGH COURT IN CIT V/S SAHNEY STEEL AND PRESS WORKS LTD. 117 ITR 354 THE ASSESSING OFFICER DENIED SIMILAR CLAIM UNDER SECTION 80J OF THE ACT ON THE GROUND THAT THE NEW UNIT WAS MA NUFACTURING ARTICLES TO BE USED AS RAW MATERIAL FOR THE EXISTING BUSINESS OF THE ASSESSEE. THE BOMBAY HIGH COURT HELD THAT THE NEW UNIT MANUFACTURED ARTICLES USED IN THE EXISTING BUSINESS OF THE ASSESSEE WAS NOT RELEVANT AND THE ASSESSEE WAS HELD TO BE ENT ITLED FOR RELIED UNDER SECTION 80J OF THE ACT. IN THE LIGHT OF THESE DECISIONS WE ARE OF THE OPINION THAT THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ONLY ON THE GROUND THAT THE DG SET MANUFACTURED THE POWER ONLY FOR THE CAPTIVE CONSUMPTION OF THE ASSESSEE . IT MAY BE STATED THAT THE TRIBUNAL IN THE ASSESSMENT YEAR 1997 98 AND 1998 99 HAS ALREADY GRANTED RELIEF IN RESPECT OF UNIT NO.I AND II WHICH WERE ESTABLISHED FOR THE PURPOSE CAPTIVE CONSUMPTION. MOREOVER THE PROVISION OF SECTION 80IA(8) ITSELF SAYS THA T WHERE ANY GOODS OR SERVICES OF THE ELIGIBLE BUSINESS ARE TRANSFERRED TO ANY OTHER BUSINESS CARRIED ON BY THE ASSESSEE AND THE CONSIDERATION IF ANY FOR SUCH TRANSFER IS RECORDED IN THE ACCOUNTS OF THE ELIGIBLE BUSINESS DOES NOT CORRESPOND TO THE MARKET VALUE OF SUCH GOODS OR SERVICES AS ON THE PROFIT AND GAIN FOR SUCH TRANSFERRED BUSINESS SHALL BE COMPUTED AS IF THE TRANSFER HAS BEEN MADE AT MARKET VALUE AS ON THAT DATE. IN OTHER WORDS THE PROVISIONS OF SECTION 80IA THEMSELVES PROVIDE AN ANSWER AND GIVE A SOLUTION WHERE THERE IS A CAPTIVE CONSUMPTION FO THE FINISHED GOODS OF THE ELIGIBLE UNITS. IN THE LIGHT OF THESE DISCUSSION THE ORDER OF THE LEARNED CIT(A) GRANTING 80IA RELIEF IN RESPECT OF DG UNITS I II III AND IV CANNOT BE FOUND FAULT WITH. THE OT HER CONSIDERATION THAT THE ASSESSEE HAS NOT OPERATED THESE UNITS BY ITSELF BUT GOT THEM OPERATED THROUGH OUTSIDERS AND THEREFORE THE ASSESSEE IS NOT ENTITLED FOR 80IA RELIEF IN OUR VIEW IS NOT A RIGHT APPROACH. SUCH CONSIDERATION IN OUR OPINION IS NOT A RELEVANT CONSIDERATION. KEEPING IN VIEW THE PURPOSE AND INTENT OF RELIEF UNDER SECTION 80IA SUCH CONSIDERATION IN OUR OPINION IS NOT GERMANE FROM THE PROVISION OF SECTION 80IA OF THE ACT. IN THE LIGHT OF THE ABOVE DISALLOWING THE ASSESSEES CLAIM FOR D EDUCTION UNDER SECTION 80IA ON THE GROUND MADE OUT BY THE REVENUE CANNOT STAND. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 9. THUS THERE BEING NO DEVIATION OF FACTS AND MATERIAL ON RECORD WE THEREFORE RESPECTFULLY FOLLOWING THE EARLIER YEARS PRECED ENCE HOLD THAT THE CLAIM FOR DEDUCTION UNDER SECTION 80IA WITH RESPECT TO POWER UNITS NO.2 3 4 AND 5 WILL CONTINUE TO BE ALLOWABLE AS DEDUCTION. THUS GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 23. FROM THE AFORESAID DECISIONS IT CAN BE INFERRED THAT THE GENERATION / PRODUCTION OF STEAM IS ALSO A FORM OF POWER AND THE UNIT 6 WHICH IS AN UNDERTAKING SET UP FOR GENERATION OF STEAM FOR ITS MANUFACTURING PROCESS CAN BE SAID TO BE FOR GENERATION OF POWER. THE BASIS ON WHICH THE LEARNED COMMISSIONER (A PPEALS) HAS TRIED TO DISTINGUISH THE DECISION OF SIAL SBEC BIO ENERGY LTD. (SUPRA) IS VERY SUPERFICIAL. WHAT NEEDS TO BE SEEN IS WHETHER GENERATION OF STEAM CAN BE SAID TO BE GENERATION OF POWER OR NOT THEN THE FINDING AND THE CONCLUSION DRAWN BY THE TR IBUNAL IN THE AFORESAID DECISION AFTER REFERRING TO THE CATENA OF DECISIONS AND VARIOUS OTHER PROVISIONS CLEARLY CLINCHES THE POINT. NOW COMING TO THE OTHER OBSERVATION OF THE LEARNED COMMISSIONER (APPEALS) THAT THE ASSESSEE HAS NOT UNDERTAKEN THE GENERATI ON OF POWER IN THIS YEAR ALSO WE FIND THAT THE SAME IS INCORRECT ON FACTS BECAUSE THE ASSESSEE HAS ALREADY FILED A CERTIFICATE FROM THE KARNATAKA STATE BOILER INSPECTION DEPARTMENT THAT THE ASSESSEE HAS GENERATED STEAM DURING THE PERIOD FROM 3 RD MAY 2001 TO 6 TH MAY 2002 WHICH MOSTLY FALLS IN THIS YEAR ONLY AND THE RATE OF QUANTITY GENERATED HAS ALSO BEEN MENTIONED. THIS GENERATION OF STEAM HAS BEEN EVALUATED AT A REALISABLE MARKET VALUE BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND THE ASSESSEE HAS ALSO DEBI TED EXPENDITURE INCURRED FOR THE GENERATION OF POWER. THUS ON THESE FACTS ITSELF IT CANNOT BE HELD THAT THE ASSESSEE HAS NOT UNDERTAKEN THE GENERATION OF POWER IN THIS YEAR. THE SECTION PROVIDES THAT THE ASSESSEE MUST BEGIN TO GENERATE POWER DURING THE P ERIOD DEFINED UNDER THE STATUE AND THE IMPUGNED ASSESSMENT YEAR DEFINITELY FALLS WITHIN THAT PERIOD. LASTLY INSOFAR AS THE OBSERVATION AND THE CONCLUSION OF THE ASSESSING OFFICER WHICH ARE BASED ON SIMILAR REASONS AS GIVEN FOR UNIT 1 TO 5 THE SAME IS AL SO NOT SUSTAINABLE AS THE TRIBUNAL HAS ALREADY DECIDED THE ISSUE ON THESE REASONING IN FAVOUR OF THE ASSESSEE. THUS WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) ON THIS SCORE AND HOLD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA WITH REGARD TO UNIT 6 ALSO AS A STANDALONE POWER GENERATING UNDERTAKING. GROUND NO.5 RAISED BY THE ASSESSEE IS THUS TREATED AS ALLOWED. 7 12 . THUS THE ASSESSEE GOT RELIEF IN THE QUANTUM APPEALS FOR THE AY 2002 - 03 AND THE ASSE SSEE IS ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT . THEREFORE THIS BEING THE PENALTY RELEVANT TO THE SAID QUANTUM APPEAL THE LEVY OF PENALTY IS NOT SUSTAINABLE. ACCORDINGLY THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY GROUND NO. 2(III) RAISED BY THE REVENUE IS DISMISSED. 13 . IN CONNECTION WITH GROUND NO.2 (IV) WHICH RELATES TO THE DISALLOWANCE U/S 80JJA OF THE ACT IT IS THE FINDING OF THE ITAT THAT THIS BEING THE ALTERNATIVE CLAIM OF THE ASSESSEE THE ADJUDICATION OF THIS GROUND IS MERELY AN ACADEMIC EXERCISE. THEREFORE THE SAME IS DISMISSED AS INFRUCTUOUS. ACCORDINGLY GROUND NO.2(IV) RAISED BY THE REVENUE IS DIS MISSED AS ACADEMIC. 14 . CONSIDERING THE ABOVE WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IN DELETING THE PENALTY BY HOLDING THAT THE CLAIM OF THE ASSESSEE IS A BONA FIDE IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE . ACCORDINGLY ALL THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 15 . IN THE RESULT APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ITA NO.911/M/2013 (AY 2003 - 2004) ITA NO.910/M/2013 (AY 2004 - 2005) ITA NO.994/M/2013 (AY 2005 - 2006) 16 . THESE THREE APPEALS ARE FILED BY THE REVENUE AGAINST THE DIFFERENT ORDERS OF THE CIT (A) - 2 MUMBAI. ALL THE GROUNDS RAISED BY THE REVENUE IN ALL THE PRESENT APPEALS ARE IDENTICAL TO THAT OF THE ONES RAISED BY THE REVENUE FOR THE AY 2002 - 2003 VIDE ITA NO.5 706/M/2008 WHICH IS ADJUDICATED AND DECIDED BY US IN THE ABOVE MENTIONED PARAGRAPHS OF THIS ORDER. SINCE THE ISSUES RAISED IN INSTANT APPEALS ARE IDENTICAL TO THAT OF THE ONES DECIDED BY US THEREFORE OUR DECISION FOR THE AY 2002 - 2003 SQUARELY APPLIES TO THE INSTANT APPEALS TOO. ACCORDINGLY ALL THE GROUNDS RAISED BY THE REVENUE IN ALL THE THREE APPEALS ARE DISMISSED AND ORDER OF THE CIT (A) IS CONFIRMED. 8 17 . IN THE RESULT 3 APPEALS FILED BY THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 18 . CONCLUSIVELY ALL THE 4 APPEALS FILED BY THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED IN THE OPEN COURT ON 1 4 T H NOVEMBER 2014. S D / - S D / - (D. MANMOHAN ) (D. KARUNAKARA RAO ) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; 14/11/2014 . . ./ OKK SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI