TMI Blog2018 (2) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... hese appeals are being decided by a common order for the sake of convenience. 2. It was a common stand of the parties before the Bench that the sole issue raised in the appeals is identical, accordingly, the arguments advanced in ITA No. 1204/CHD/2016 would address the issues raised in ITA No. 1205/CHD/2016 as facts circumstances and position of law on the issue therein continues to remain the same. Accordingly, the issue agitated by the Revenue vide Ground Nos. 1 2 from ITA No. 1204/CHD/2016 is reproduced hereunder: 1. In the facts and circumstances of the case, Ld. CIT(A) has erred in deleting the addition of ₹ 53,56 crores made on account of subsidy payable by the Govt. 2. It is prayed that the order of Ld. CIT(A) be set aside and that of the AO restored. 3. The ld. CIT DR relied upon the assessment order. The Authorised Representative of the assessee relying upon the impugned order submitted that the point at issue is fully covered in favour of the assessee by virtue of the order of the ITAT in 2008-09 assessment year wherein vide its order dated 02/08/2017 in ITA Nos. 816 817/Chd/2016 the Department's appeals on identical facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT vs. Jagatjit Industries Limited (2011) 339 ITR 382 (Del.) is applicable being on identical facts as in the case of the appellant. I have perused the aforesaid judgements. It is not the case of the AO that the appellant has followed a different accounting system in the year under consideration or that there is deviation in the treatment of entries under the impugned heads. In the case of the assessee decided by the Hon'ble Punjab High Court (now Punjab and Haryana) the assessee was running two businesses and it had not maintained books of accounts for a particular business in which loss was incurred. In the case of the present appellant, all the books of accounts are duly maintained and produced before the AO. The Hon'ble Delhi High Court observed as under:- 16. The present factual matrix............The said accounting system has been followed for a number of years and there is no proof that there has been any material change in the activities of the assessee as compared to the earlier years. Nothing has been brought on record to show that there has been distortion of profit or books of account did not reflect the correct picture. In the absence of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the number of units varies. In the year under consideration the appellant Board initially claimed tariff compensation for 7364.00 MUs on the basis of its projections. However, on 14/06/05, the PSERC in its Tariff Order of Financial Year of 2005-06 approved compensation for 7000.00 MUs which the appellant duly incorporated in its accounts. The financial statements for financial year 2005-06 were signed on 11/09/2006. Later on, during the financial year 2007-08, the Regulator finally approved the subsidy for financial year 2005-06 for 7317 MUs. Therefore, in accordance with the AS-4, tariff compensation for additional 317 MUs pertaining to financial year 2005-06 was realized and accounted for by the appellant during the financial year 2007-08 relevant to the assessment year 2008-09. This fact is evident from the record and it has not been questioned by the AO at any stage. Similar is the position in respect of the figures of revenue expenses understated, revenue income overstated and revenue expenditure overstated. As per contentions of the appellant, full and appropriate effect of the impugned expenses/income has been duly incorporated in the books of account as per its past ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see for the assessment year 2005-06 by the Hon'ble Tribunal . 32. Before us, the Ld. DR argued that the mixed accounting policy of the assessee cannot be accepted and the subsidy has to be rightly taxed in the year it is accrued. 33. Ld. AR submitted that the subsidy is received from the State Govt.for providing free electricity to agricultural consumers and schedule castes. The procedure is that estimates are drawn in which the tentative amount of subsidy is worked out on the basis of estimated supply and rates in force as determined by the Regulatory Authority. The tentative amount so determined by the Board is subject to scrutiny by the Punjab State Electricity Regulatory Authority Commission and the estimates are revised on the basis of rates determined on the basis of report of the Regulatory Authority. In the middle of the year the figures as to supply and rates are revised and the claim is lodged accordingly. Normally, the effect to the revised estimates is given by the Authority after the close of the accounting period and the effect as to the same is given in the year in which the amount is communicated by the Regulatory Authority. The figure intimated is eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the figure of subsidy payable for the assessment year under appeal was determined at Rs.,2578.13 crores against the figure of 2848.04 crores. 36. The above figures are indicative of the true state of affairs and it will be appreciated that that the amount of subsidy receivable cannot be determined till the final truing up is made. 37. Based on the facts placed before us and having gone through the system of receipt of subsidy, keeping the entire gamut of facts and law we are of the considered opinion that the impugned addition was not called for and is, therefore, deleted, when effectively the assessed income would not undergo any change. Similar view was also taken in the case of the assessee for the AY 2005-06 by this Tribunal and hence no interference is called for in the order of the Ld. CIT(A). 38. In the result, ground raised by the Revenue is dismissed. 4.2. In the absence of any infirmity either on facts or law respectfully following the precedent available in assessee's own case the Departmental appeals are dismissed. The said order was pronounced on the date of hearing itself. 5. In the result, the appeals are dismissed. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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