IMPORTANT POINT
The court established that profits from captive consumption of electricity generated by an assessee's own power plant are eligible for deductions under Section 80-IA of the Income Tax Act, 1961.

JUDGMENT :

Per Dr. Pushpendra Singh Bhati, J:

1. The instant Income Tax Appeals have been preferred under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘Act of 1961’), claiming the following reliefs:

Income Tax Appeal No.1/2012 by Appellant (Assessee):

“(i) Allow the instant appeal and set aside or quash the impugned order of the ITAT dated 19.08.2001 in so far as it is against the appellant.

(ii) Decide the substantial questions of law in favour of the appellant and against the revenue.

(iii) Reframe suitable questions of law, if it is considered necessary, to do justice to the appellant.

Any other appropriate relief, as may be considered just and proper, including awarding of the costs may be granted in favour of the appellant.”

Income Tax Appeal No.13/2012 by Appellant (Revenue):

“It is, therefore, prayed that this appeal may kindly be allowed. By an appropriate order or direction the impugned order dated 19.08.20 passed by the learned tribunal and order of learned CIT passed under revisional jurisdiction may kindly be held to be sustained.

Any other order which may be considered just and proper in the facts and circumstances of the case may kindly be passed in favour of the appellant. Cost of the appeal be awarded in favour of the appellant.”

Income Tax Appeal No.88/2014 by Appellant (Revenue):

“It is, therefore, prayed that this appeal may kindly be allowed. By an appropriate order or direction the impugned order dated 29.11.2013 passed by the Tribunal may kindly be set aside and the order of AO may kindly be restored and upheld.

Any other order which may be considered just and proper in the facts and circumstances of the case may kindly be passed in favour of the appellant. Cost of the appeal be awarded in favour of the appellant.”

2. The present appeals were admitted on the following substantial question(s) of law:

Appeal No.1/2012 (Assessee), vide order dated 13.01.2012:

“(i) Whether Tribunal was justified in upholding that Commissioner of Income Tax was justified in invoking the powers under Section 263 of the Act because the order passed by the A.O. was in his opinion not only erroneous but prejudicial to the interest of Revenue within the meaning of Section 263 of the Act?”

Appeal No.13/2012 (Revenue), vide order dated 14.01.2013:

“Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee company is eligible for deduction u/s 80IA of the Income Tax Act, 1961 despite there being no real income from Captive Power Plant, Debari and no profit therefrom having been included in the gross total income?”

Appeal No.88/2014 (Revenue), vide order dated 22.01.2015:

“Whether on the facts and in the circumstances of the case, the Tribunal has been justified in holding that the assessee company is eligible for deduction u/s 80IA of the Income Tax Act, 1961 despite there being no real income from Captive Power Plant, Debari and no profit therefrom having been included in the gross total income?”

3. Since all the instant petitions involve a common controversy, though with marginal variation in the contextual facts, therefore, for the purposes of the present analogous adjudication, the facts and pleadings, looking into the relevance for the present adjudication, are being taken from the above-numbered D.B. Income Tax Appeal No.88/2014 (CIT, Udaipur Vs. M/s. Hindustan Zinc Ltd.), while treating the same as a lead case; rival submissions of the parties and the observations of the Court, in the present judgment, would also be based, particularly, on the factual matrix of the lead case.

4. Brief facts of the case are that the assessee company derives income from manufacturing of zinc, lead and its by-products. The original return was filed on 29.10.2004 declaring total income of Rs. 7,04,09,07,690/- which was subsequently revised to Rs.6,92,16,28,570/-. The assessment was completed on 22.12.2006 under Section 143(3) of the Act of 1961 on total income of Rs. 7,33,72,00,910/- wh