Kerala HC allows Deduction u/s 80-IA to Kannan Devan Plantations

Kanan Devan Hills Plantations Company Pvt. Ltd. Vs ACIT (Kerala High Court)

The appellant-assessee is a private limited company, engaged in the business of “growing, manufacturing, and selling tea and other produce.” It is also engaged in the business of distributing electricity taken from the State-owned Kerala State Electricity Board.

2. The assessee’s predecessor, Tata Tea Limited, had not only owned the plantation business but also generated hydel power from the pre-independence days. Post-independence, when the State took over the power generation, the company was allowed to buy electric power from the Government in bulk, use it for its own purpose, and distribute the balance power to the residents of Munnar hill-station. So the predecessor company had an elaborate network of transmission lines.

3. Formed in March, 2005, the assessee company took over the power distribution network as well as the tea plantations.

4. For the assessment year 2008-09, the assessee filed its return of income declaring a total income of Rs.2,45,83,170/-. Later, it filed a revised return declaring an income of Rs.1,49,74,810/-. But the assessing officer selected the assessee company for scrutiny and determined the total income at Rs.6,09,20,556/-, through Annexure A proceedings, after making certain disallowances.

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