Case Law Details
Gail (India) Ltd. Vs DCIT-LTU (ITAT Delhi)
The issue under consideration is whether the deduction claimed u/s 80HH, 80I and 80IA for production, processing, transmission and distribution of various gases is justified in law?
ITAT states that, the CIT(A) accepted that benefit of deduction under Section 80I/ 80IA of the Act is admissible on Lean gas manufactured/ produced, but held that such deduction is admissible at the stage of two LPG plants at Vijaipur and Vaghodia. The CIT(A) held that activities undertaken by the assessee at its customer terminals did not constitute “manufacture or production of any article or thing” so as to be eligible for deduction under Section 80I/ 80IA of the Act. As a consequence of the aforesaid, the assessee has been denied deduction in respect of profits derived from supply of processed natural gas at various customer terminals, which are not routed through LPG plant. Moreover, since deduction is admissible for specified years, as a consequence of the order of the CIT(A), deduction in respect of profits derived from processed Lean Gas shall be considered from the year of setting up of the LPG Plant and not the relevant customer terminal at which such processed Lean Gas is supplied to the customer. Extensive processing activities undertaken by the assessee at the customer terminals to make lean gas and natural gas marketable and fit for use, clearly constitute “manufacture”. The contention of the assessee is that the claim of deduction made by the assessee under section 80I/80IA/ 80HH are genuine as the similar claims have been allowed in the earlier years by the revenue. Deduction allowed in earlier years cannot be denied in subsequent years. Since deduction under section 80IA of the Act in respect to profit derived from eligible units has been allowed by Revenue till assessment year 1995-96, the same cannot be denied subsequently. The Ld. AR made reference to the decision of the CIT(A) in assessee’s own case for the assessment year 1994-95. Therefore, the CIT(A) has not taken into account the revenue’s stand in the earlier years and deviated from the same without any substantial reasons or evidence on record. Thus, the claim of deduction made by the assessee under section 80I/80IA/ 80HH are genuine in this year as well. Accordingly, the assessee’s appeal are allowed.
FULL TEXT OF THE ITAT JUDGEMENT
These two appeals are filed by the assessee and Revenue against the order of the Commissioner of Income Tax [Appeals]-IX, New Delhi dated 31.05.2013 for Assessment Years 1996-97.
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