Bajaj Energy Private Limited Vs ACIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) decided two appeals filed by the assessee for Assessment Years 2018-19 and 2020-21 against separate orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, arising from assessments framed under Sections 143(3) read with 144B of the Income-tax Act, 1961.
For Assessment Year 2018-19, the principal issue concerned deduction under Section 80IA. The assessee, engaged in power generation through thermal power undertakings, claimed deduction under Section 80IA in respect of profits derived from its eligible power generation units. The Assessing Officer observed that the assessee had business income of ₹9,17,63,620 and Short Term Capital Gain of ₹3,22,31,811 from redemption of mutual fund units. Holding that deduction under Section 80IA could be allowed only against business income and not against capital gains, the Assessing Officer restricted the deduction to the business income component. The assessment also included disallowance of ₹35,725 representing interest and damages under the Employees’ Provident Fund Act and an addition of ₹4,22,211 relating to provision for sick leave written back. The CIT(A) substantially affirmed the assessment.
Before the Tribunal, the assessee submitted that it had never claimed the Short Term Capital Gain as profit derived from the eligible undertaking. It contended that the eligible profits of the power generation units had been independently computed and certified in Form No. 10CCB at ₹76,29,43,289, while the Gross Total Income was ₹12,39,95,431. Since the eligible profits exceeded the Gross Total Income, the deduction had already been restricted by the assessee to the Gross Total Income in accordance with Section 80A(2). The dispute, according to the assessee, related only to the extent of deduction allowable after determination of eligible profits.
