In High Court of Judicature at Madras Dated: 26.08.2014 Coram Honourable Mr.JUSTICE R.SUDHAKAR and Honourable Mr.JUSTICE G.M.AKBAR ALI Tax Case (Appeal) No.389 of 2014 Commissioner of Income Tax Trichy. Appellant Vs. CETHAR LIMITED No.4, Dindigul Road, Trichy - 620 001 Respondent APPEAL under Section 260A of Income Tax Act against order dated 21.11.2013 made in I.T.A.No.1052/Mds/2013 on file of Income Tax Appellate Tribunal, Madras 'A' Bench. For Appellant : Mr.J.Narayanasamy Standing counsel for Income Tax For Respondent: Mr.M.P.Senthil Kumar JUDGMENT (Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by Revenue as against order of Income Tax Appellate Tribunal raising following substantial question of law: 2 Whether on facts and in circumstances of case, Tribunal was right in holding that assessee is entitled to claim of deduction under Section 80IB in respect of income relatable to power generated by Wind Mill that was consumed by assessee by treating said income as income derived fromthe eligible undertaking?" 2. assessee company is manufacturer of Boilers and in business of generation of electricity through wind mills. assessee filed its return of income for assessment year 2005-06 declaring total income of Rs.39,69,73,114/-. In re-assessment proceedings, Assessing Officer held that assessee had claimed benefit of deduction under Section 80IA on amount of Rs.38,79,459/-, whereas assesee was eligible for deduction under Section 80IA only on actual sale of power to Tamil Nadu Electricity Board, ie., 13,36,848/- and disallowed remaining amount. As against said order, assessee filed appeal before Commissioner of Income Tax (Appeals), who concurred with decision of Assessing Officer, dismissed appeal. Aggrieved by same, assessee filed further appeal before Income Tax Appellate Tribunal. Tribunal agreed with contentions of assessee allowed appeal holding that assessee was deriving income from generation of electricity. Tribunal also held that assessee instead of getting cash benefit, was getting credit for units supplied to Government agency and thus it cannot be said that income earned by assessee by supplying units to TNEB falls within meaning of term 'attributable to'. 3 Aggrieved by order of Tribunal, present Tax Case (Appeal) has been filed by Revenue. 3. Mr.M.P.Senthilkumar, learned counsel takes notice for respondent/assessee. Both learned standing counsel appearing for Revenue and learned counsel appearing for assessee fairly submits that issue involved in this appeal is covered by decision of this Court reported in (2011) 338 ITR 643 (Mad) (Tamilnadu Petro Products Ltd. V. Assistant Commissioner of Income Tax), wherein this Court, following decision of this Court dated 07.06.2010 made in T.C.(A)Nos.68 to 70 of 2010 (CIT V. Thiagrarajar Mills Ltd.) held in favour of assessee, thereby allowed appeal. 4. In T.C.(A)Nos.68 to 70 of 2010 (CIT V. Thiagrarajar Mills Ltd.), this Court, by order dated 07.06.2010, held as follows: "8. contention that only whatever power generated from sale to outsider or electricity board, and profit or gain derived by such sale alone can be taken as profits or gains derived by assessee as mentioned in section 80-IA(1) of Income-tax Act has been rejected by Tribunal in order impugned. In our con-sidered view, Tribunal was well justified in having rejected such stand of appellant. Having referred to section 80-IA(1) of Income-tax Act, we are also convinced that what is all to be satisfied in order to be eligible for deduction as provided under sub-section (1) of section 80-IA, 4 assessee should have set up undertaking or enterprise and from and out of such undertaking or enterprise set up, any profit or gain is derived, falling under sub- section covered by sub-section (4) of section 80-IA of Income-tax Act, such profit or gain derived by assessee can be deducted in its entirety for period of 10 years starting from date of functioning of set up. contention that profit or gain can be claimed by assessee only if such profit or gain is derived by sale of its product or power generated to outsider cannot be manner in which provisions contained in section 80-IA(1) can be interpreted. expression 'derived' used in said section 80- IA(1) in beginning as well as in last part of sub-section (4) makes it abundantly clear that such profit or gain could be obtained by one's own consumption of outcome of any such undertaking or business enterprise as referred to in sub-section (4) of section 80-IA. dictionary mean-ing of expression 'derive' in New Oxford Dictionary of English states 'obtaining something from specified source'. In sec-tion 80-IA(1) also no restriction has been imposed as regards deriving of profit or gain in order to state that such profit or gain derived only through outside source alone would make eligible for benefits provided in said section. 9. Therefore, there is no difficulty in holding that captive consumption of power generated by assessee from its own power plant would enable respondent-assessee to derive profits and gains by working out cost of such consumption of power inasmuch as assessee is able to save to that extent which would certainly be covered by section 80-IA(1). When such will be outcome out of own consumption of power 5 generated and gained by assessee by setting up its own power plant, we do not find any lack of merit in claim of respondent-assessee when it claimed by relying upon section 80- IA(1) of Income-tax Act by way of deduction of value of such units of power consumed by its own plant by way of profits and gains for relevant assessment years." 5. Accordingly, following above-said decisions of this Court reported in (2011) 338 ITR 643 (Mad) (Tamilnadu Petro Products Ltd. V. Assistant Commissioner of Income Tax) and order dated 07.06.2010 made in T.C.(A)Nos.68 to 70 of 2010 (CIT V. Thiagrarajar Mills Ltd.), questions of law are answered in favour of assessee and against Revenue. This Tax Case (Appeal) stands dismissed. No costs. Index :Yes/No (R.S.,J) (G.M.A.,J) Internet: Yes/No 26.08.2014 sl To 1. Income Tax Appellate Tribunal, Madras 'A' Bench. 2. Commissioner of Income Tax (Appeals), Tiruchirapalli. 3. Deputy Commissioner of Income Tax, Company Circle I, Trichy. 6 R.SUDHAKAR,J. AND G.M.AKBAR ALI,J. sl T.C.(A) No.389 of 2014 26.08.2014 Commissioner of Income-tax, Trichy v. Cethar Limited