VEDANTA LIMITED Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner is a Public Limited Company, engaged in the manufacture and sale of non-ferrous metals and telephone cables. It is an income tax assessee for long. A return of income was filed in respect of Assessment Year (A.Y.) 2007-08, wherein the petitioner claimed various deductions under Chapter VI-A and Section 10B of the Income Tax Act, 1961 (in short 'Act').

(2.) An intimation under Section 143(1) was issued on 28.03.2008 and the assessment was thereafter selected for scrutiny. Notice in terms of Section 143(2) was issued on 18.07.2008 posting the matter for hearing on 06.08.2008. In the course of assessment proceedings, the Assessing Officer, since the petitioner was covered by the provisions relating to Transfer Pricing in terms of Chapter X of the Act, forwarded a draft assessment order to the petitioner under cover of forwarding letter dated 30.12.2010. The Authority, had, in the draft order of assessment, rejected the claims of the petitioner under Sections 80IA, 80IB and 10B of the Act.

(3.) (i) The reasoning set forth as far as rejection under Section 80IA was concerned is that the power generated by the Power Plant set up by the petitioner is utilised captively and not by way of sale to third parties and as such cannot be treated as profit derived, as contemplated in terms of Section 80IA.