ITAT MUMBAI BENCH ‘I’
Essar Power Ltd.
versus
Additional Commissioner of Income-tax
IT Appeal Nos. 5318 & 5725 (Mum.) of 2007
[ASSESSMENT YEAR 2003-04]
Date of Pronouncement – 9.11.2012
ORDER
Dinesh Kumar Agarwal, Judicial Member
These cross appeals by the assessee and the Revenue are directed against the order dtd. 22-6-2007 passed by the ld. CIT(A) – V, Mumbai for the A.Y. 2003-04. Both these appeals are disposed of by this common order for the sake of convenience.
2. Briefly stated facts of the case are that the A.O. observed that the assessee is an infrastructure company which is notified by the Government of India, Ministry of Finance vide their Notification dated 11-3-2004 as claimed by the assessee. The company is in the business of generation and sale of electricity having its 515 MW combined cycle power plant at Hazira, Surat. The company filed return declaring a loss for the year at Rs. 55,39,83,223/- and the book profit u/s 115JB at Rs. 64,79,83,219/-. However, the assessment was completed at a total loss of Rs. 24,76,00,058/- under the normal provisions of the Income Tax Act, 1961 (the Act) and at a book profit of Rs. 76,12,67,288/- u/s 115JB of the Act vide order dtd. 31-01-2006 passed u/s 143(3) of the Act. On appeal, the ld. CIT(A) partly allowed the appeal.
3. Being aggrieved by the order of the ld. CIT(A) the assessee and Revenue both are in appeal before us.
ITA No. 5318/Mum/2007 (By assessee)
4. Ground No. 1 reads as under:-
“1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in not directing to allow the deduction u/s 80IA on the net interest income viz (a) Interest on employee loans & advances, (b) Interest on margin money and (c) Interest income on dues towards Income Tax refund adjustment from Essar Project Ltd.”
5. Brief facts of the above issue are that the A.O. observed that the assessee has declared income of Rs. 1,48,58,920/- under the head ‘interest income’. From the break-up of the same, the A.O. observed that the following items of interest income required to be assessed as income from other sources as the same do not relate to assessee’s power business:-
