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TMI Blog2024 (2) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and revenue in these bunch of appeals are as under:- ASSESSMENT YEAR 2015-16 ITA NO. 500/JPR/2023(ASSESSEE) 1. That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in not considering the assessment order u/s 143(3) r.w.s. 144C as invalid and void ab initio which is liable to be quashed since not passed in accordance with the provisions of Section 144B(1)(xvi)(b) of the Act. 2. That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in rejecting the appellant's claim of allowing reliability charge of Rs. 1.5/unit in computing Transfer Price of Power for the purpose of Deduction u/s 80-IA in respect to its eligible power undertakings. 3. That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in confirming the disallowance made by the A.O. on account of claim of Education Cess of Rs. 3, 06, 59, 279/-. 4. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in rejecting the claim of Deduction u/s 80-IA while computing book profit u/s 115JB of the Act mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance made by the A.O. on account of claim of Education Cess of Rs. 3, 68, 58, 639/- 4. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in rejecting the claim of Deduction u/s 80-IA while computing book profit u/s 115JB of the Act. 5. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in law in not considering incentives amounting to Rs. 6, 20, 91, 72, 703/- granted to the appellant as capital receipt which are not exigible to tax while computing total income under normal provisions of the Act. 6. That the appellant craves leave to add, to amend, modify, rescind, supplement or alter any of the Grounds stated here-in-above, either before or at the time of hearing of this appeal. ITA NO. 490/JPR/23 (REVENUE) 1. Whether on the facts and circumstances of the case, the learned CIT(A), NFAC, Delhi was justified in allowing the appeal of the assessee by deleting the disallowance of Rs. 3, 89, 10, 26, 211/- on account of deduction u/s 80IA in respect of captive power plant. 2. Whether on the facts and circumstances of the case, the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment made to the transporter to the tune of Rs. 1, 00, 00, 000/-. 6. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in law in not considering incentives amounting to Rs. 278, 74, 31, 998/- granted to the appellant as capital receipt which are not exigible to tax while computing total income under normal provisions of the Act and under the provisions of Sec. 115JB of the Act. 7. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in rejecting the claim of Deduction u/s 80-IA and 80-IC while computing book profit u/s 115JB of the Act. 8. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in law in not excluding notional income while computing Book Profit u/s 115JB of the Act. 9. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in law in not deleting the excess interest charged u/s 234C of the Act. 10. That the appellant craves leave to add, to amend, modify, rescind, supplement or alter any of the Grounds stated here-in-above, either befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT(Appeals) erred in restricting the claim of deduction u/s 80-IA on account of Solid Waste Management System upto the amount as claimed in the return of income inspite of the fact that Ld. CIT(Appeals) confirmed that assessee is eligible for higher deduction u/s 80-IA of the Act. 5. That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in confirming the disallowance made by the A.O. on account of claim of Education Cess of Rs. 13, 91, 57, 647/- 6. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in confirming the addition made by the A.O. on account of unexplained investments u/s 69B to the tune of Rs. 15, 88, 040/- by considering it as bogus purchases. 7. That on the facts and in the circumstances of the case, the Ld. CIT (Appeals), was not justified and erred in law in not considering incentives amounting to Rs. 3, 39, 74, 28, 174/- granted to the appellant as capital receipt which are not exigible to tax while computing total income under normal provisions of the Act and under the provisions of Sec. 115JB of the Act. 8. That on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Stock valuation ii. Income/Capital Gain on sale of land or building iii. Outward Foreign Remittance iv. Depreciation Claim v. Sales Turnover Mismatch vi. Other Deduction claimed vii. Refund Claim viii. Payment to related persons mismatch ix. Deduction under Chapter VI-A x. Deduction for scientific research xi. Other income not credited to P & L a/c xii. Mismatch in Income/Capital Gain on sale of land or building xiii. Loans/advance to related persons Consequently, a notice u/s. 143(2) of the Act was issued on 08.04.2016 electronically and served upon assessee through email. Further notice u/s. 142(1) of the Act dated 05.02.2021 dated 01.03.2021 was also issued and duly served upon the assessee. In response the assessee submitted compliance / explanation electronically through e-proceedings facility as raised from time to time. The ld. AO noted in his order that assessee's reply has been persuaded and considered on relevant points having detailed explanation. 3.1 Having perused the information obtained and based on the details made available supported by the accompanied documents in support of the return of income filed by the assessee the draft assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , rather than a payment made in order to earn profits, so as to be a deductible expenditure. In the light of the aforesaid reasons, he holds that education cess is not an allowable deduction under section 37(1), r.w.s. 40(a)(ii) of the Act and therefore, the amount of Rs. 3, 06, 59, 279/- claimed by the assessee as allowable deduction disallowed and added back to the income of the assessee. 3.3 During the scrutiny proceedings, the case was referred to the TPO for determination of Arm's Length price with reference to all international transactions / domestic transaction undertaken by the assessee during A.Y 2015-16. In response, the order u/s 92CA (3) of Income Tax Act, 1961 was passed in which adjustment of Rs. 4, 72, 73, 88, 814/- has been proposed by the TPO for AY 2015-16. After considering the disallowance amounting to Rs. 74, 12, 45, 441/- already made by the assessee on the issue, balance amount of Rs. 3, 98, 61, 43, 373/- added with reference to the TP adjustments. The adjustment so made are as under: a) Reduction in claim u/s 80-IA on power undertakings for an amount of Rs. 2, 70, 66, 00, 914/-. b) Reduction in claim u/s 80-IA on Solid Waste Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and revised the PSM to 64 % as against the PSM of 79.73 % adopted by the assessee on the basis of the FAR analysis adopted by the department in A. Y. 2013-14. TPO for the year under consideration carried out independent FAR analysis to arrive at 64 % rate. Further, TPO rejected the element of freight on clinker handling from the market value. Thus, on this issue adjustment of Rs. 90, 55, 18, 397/- on account of transfer price of solid waste was made in the assessment order. The ld. CIT (A) after considering the arguments of the assessee has deleted the said addition. The crux of the finding recorded by the ld. CIT (A) on this issue is reiterated here in below : "9.10 I am of the view that there is no reason for TPO to recalculate the PSM workings for the year under consideration when the said exercise has already been carried out by the department in AY 2013 - 14 and duly accepted by the appellant in earlier year, thereby resulting in finality of the proceedings. Revision of the said split by the TPO during the year under consideration on arbitrary basis without giving any justifiable reason for the same or pointing out any deficiency in the split made by the appellant wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nearest railway station) and rail freight from rail head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply the Transaction Net Margin Method by applying the margin earned by the comparable companies. On this issue after considering the finding of the TPO and that of the assessee the ld. CIT (A) has decided this issue by observing as under : "11.12 Being identical facts, the issue needs to be decided on the basis of AY 2014-15. As the methodology based on the value addition i.e. savings on account of Rail freight and handling expense of Rail System of the appellant has already been upheld by this office in AY 2014-15, I find no reason to deviate from the same. 11.13 However, while adjudicating this issue in AY 2014-15, it was held that the entire profit cannot be attributed to Rail System and therefore certain portion of the profits needs to be attributed to the Cement Manufacturing Unit (CMU) based on functions, assets a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of the assessee. The relevant finding of the ld. CIT (A) on this issue reads as under: 15.20. In view of overall discussion made above, it is concluded that section 115JB is a self-contained code and while computing Book Profit, the amounts to be deducted and to be added to the net profits has already been stated in Explanation to section 115JB(2). No further deductions or additions can be made to the book profit apart from those already provided therein. Thus, respectfully following the aforesaid decisions, it is held that deductions under section 80-IA etc. cannot be allowed to be reduced while computing book profit under section 115JB. This ground of the appellant is therefore dismissed. 5. The above findings of the ld. CIT (A) confronted before this tribunal by the revenue as well as by the assessee as both feel that the ld. CIT (A) has not approved to their respective contention. So, first we are taking up the appeal of the assessee which is registered as ITA No. 500/JPR/2023. 6. Ground No. 1 relates to rejecting the impugned assessment order u/s 143(3) r.w.s. 144C passed by Ld. AO as invalid and void ab initio since it was not passed in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it pertains to Haryana Electricity Regulator authority and not to Rajasthan Electricity Regulatory authority and hence not applicable to the case of assessee. Secondly the terms and conditions are different in this case from the case of assessee. Assessee is not supplying power to third party on 24 hour basis. Thus the submissions of the assessee in this regard are not acceptable" 10. Thus, we note that the issue which was raised before the ld. CIT (A), was rejected on the contention that the reliability charge does not pertain to Rajasthan Electricity Regulatory Authority and is therefore not applicable to the case of the assessee. 11. The ld. AR of the assessee on this issue argued that the assessee has set up captive power plants (CPP) which requires huge capital outflow and were set up with the primary objective of supplying long term uninterrupted power supply to the cement manufacturing units (CMUs) of the assessee. The ld. AR further submitted that the cement industry being a continuous process industry requires uninterrupted power supply on 24-hour basis which is provided by the CPP of the assessee. The CPP being set up exclusively for the CMUs carries a risk of having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r supply. Based on above, for the year under appeal, Grid rate being Rs. 6.98/unit, reliability charge @ 15% of grid rate shall be Rs. 1.05/unit for AY 2015-16. However in the aforesaid decision in Appellant's own case for AY 2014-15, the fact of exclusive capex by the Power Undertaking and application of arms' length principles enshrined in Sec. 92F(ii) (and made applicable to Undertakings claiming tax holiday under section 80IA vide clause (iii) to the Explanation below Sec. 80A(6) & Sec. 80IA(8)) were not urged. Hence considering these additional submissions and following arms' length principles, it is humbly prayed that Reliability Charge, at-least @ Rs. 1.50 per unit or mark up of 15% for each of the two distinct benefits be kindly allowed. 12. The ld. AR of the assessee also drew our attention to Para 8 & 8.1 of this co-ordinate bench in assessee's own case for AY 2014-15 where relevant extracts of HERC & UERC orders fixing reliability charge have been quoted. He further pointed out that in such cases consumers are exempted from load shedding during scheduled or unscheduled power cuts and during restricted hours. However, no exemption is provided for load shed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 2.50 per unit originally proposed to Rs. 1.50 per unit. The ld. AR of the assessee strongly placed reliance on above fact that the charge proposed by Discoms with HERC was Rs. 2.50 on arm's length principles and thereafter in the interest of general public, post discussions it has been agreed to reduce to Rs. 1.50 per unit. Thus Rs. 1.50 per unit charge is also the minimum chargeable rate for uninterrupted power supply and the assessee is claiming the said minimum charge only covering both uninterrupted power supply and exclusivity. 16. We note that the issue has already been decided on principles in favour of the appellant in earlier year (i.e. in AY 201415) wherein it has been held that the reliability charge shall form part of the transfer price of power. We further, from the facts of the assessee's case as stated above, where there is both exclusivity (resulting in huge capex for single user) advantage and uninterrupted power supply, we on facts, agree with the assessee's claim that Rs. 1.50/unit is the minimum reliability surcharge at arm's length principles. As regards the contention of the ld. CIT (A) that the said rate of reliability cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d contention of the assessee was not considered by the ld. AO. 23. The assessee has challenged the action of the ld. AO before the ld. CIT (A) who has decided the issue against the assessee stating that section 115JB is self-contained code and while computing book profit, the amounts to be deducted and to be added to the net profit has already been stated in Explanation to section 115JB (2). No further deductions or additions can be made to the book profit apart from those already provided therein. 24. In support of the grounds so raised by the assessee the ld. AR of the assessee has made the following key submissions: - (a) CIT (A) vide it's order dated 08-06-2023 has decided the issue against the assessee by relying on the decision of various High Courts. The decision of Hon'ble High Courts as relied upon by the CIT (A) deals with the issue of constitutional validity of Section 115JB in relation to the companies availing Deduction under Chapter VIA. The Appellant is not challenging the applicability or constitutional validity of Section 115JB. On the contrary, Appellant is praying to give full effect to the provisions of Sec. 115JB. (b) Sec. 115JB (5) states that - "Save ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the same has been considered in the spirit of the law as interpreted by the High Court. 26. The ld. AR of the assessee submitted that the case of Safeflex International (supra) was that there was a unit eligible for exemption u/s 10AA which is an SEZ unit. For SEZ unit u/s 10AA, there is already an amendment made vide Finance Act, 2011 w.e.f. 01-04-2012 which inserted a sunset clause vide proviso to subsection (6) so that w.e.f. 01-04-2012, any entrepreneur carrying business in an SEZ unit would be liable to pay MAT on profits arising from development of SEZ. The case of the assessee is that it does not have any unit in SEZ. Hence the above sub-section (6) is not applicable to assessee. So, reliance on the decision in Safeflex International (supra) on the presumption that assessee has SEZ unit, was not correct in the facts of the case on hand. 27. The facts of the case of the assessee falls within the provision of section 115JB (5) and the reasoning given considering the vide amended provision of section 115JB(6) is not correct in that year. 28. The assessee is entitled to tax holiday within the provision of 80IA of the Act. This entitlement to that deduction is not dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to motivate or incentivise on account of furtherance of larger national objectives of industrialization of backward area, augmentation of power generation, elimination of health hazards etc. Such exemptions/ financial motivations factor provided by way of deduction from the income of the said eligible undertakings provided by the statute vide specific provisions cannot be taken away by generic provisions of section 115JB and whereas the interest of the specifically safeguarded by provision of section 115JB(5). If the intention of the Legislature was to the contrary, there would have been specific denial on the same lines as provided in the provision of section 115JB(6) wherein the exempt income unit were specifically denied the benefit of income generated from the SEZ unit and the unit of the assessee is not SEZ unit. 33. Chapter XII-B of the Income Tax Act, 1961 deals with special provisions relating to certain companies. Section 115JB therein contains special provisions for Minimum Alternate Tax by companies. Chapter XII-BA of the Income Tax Act, 1961 deals with special provisions relating to certain non-corporate assesses. Section 115JC therein contains special provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook profit u/s 115 JB of the Act. This issue has been decided by the coordinate bench in assessee's own case for A Y 2014-15 in assessee's own case wherein Bench relying on the order of Safeflex International (Supra) held as under :- - "18. The sub-section (5) to section 115JB has been subject matter of interpretation by the courts and it would be relevant to refer to these decisions which have been brought to our notice during the course of arguments by the ld. AR. In case of CIT vs Metal & Chromium Plater (P) Ltd (supra), the issue for consideration before the Hon'ble Madras High Court was whether claim under section 54EC for computing capital gains can be allowed while computing book profit as per section 115JB of the Act. In that context, the Hon'ble High court has held that section 115JB is a self-contained code of assessment and the levy of tax is on book profits after effecting various adjustments as set out in terms of explanation thereto. It was further held that provisions of sub-section (5) of section 115JB open the assessment to the application of all other provisions contained in the Income Tax Act except specifically barred by that section itself. It was accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 115JB. Like Sec. 80IB(10) exclude the income from housing project for taxation purpose under normal provisions of the Act. Thus, it will not be taxable u/s 115JB. (b) Dealing with the matter, sub-section (5) which says that save as otherwise provided in this section. Similar provision was incorporated in sub sec (4) of sec 115JA which is the predecessor of sec 115JB. But absent in section 115J which preceded sec 115JA. This peculiar provision raised a controversy as to the legal implication of insertion of sub-sec (5) and sub-sec (4) in sec 115JB and 115JA respectively. This legal issue has been considered by Mumbai Bench of the Tribunal in the case of ITO v. Frigsales (India) Ltd. [2005] 4 SOT 376 (Mum). The issue related to capital gains arising on a depreciable asset which is exempt u/s 50 of the Act. Taking notice of sub-sec (4) of sec 115JA which provisions, as stated above, was not available in sec 115J, the tribunal held that the exempt income under sec 50 would remain exempted as per provisions of sub-sec (4) of sec 115JA and therefore, capital gain arising to an assessee u/s 50 on a depreciable asset is liable to be excluded from calculation of deemed profits u/s 115JA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness. AO allowed setting off loss incurred in one unit against profit of other two units which were as per the judicial pronouncements. It was held that Commissioner taking a different view and branding the order of the AO erroneous and prejudicial to the interest of the revenue was not justified. (g) In the instant case assessee was undisputedly entitled for deduction u/s. 80IB(10) in respect of housing profit. Accordingly, AO while framing scrutiny assessment order allowed the same out of normal income as well as while computing book profit. However, according to the Ld. CIT, the assessee is liable to pay the MAT on the profit earned u/s. 80IB (10). In terms of the decision of Supreme Court in case of Max India Ltd. (supra) whenever two views are possible and the AO has taken one view, with which the CIT does not agree, it cannot be treated as an erroneous order, prejudicial to the interests of the Revenue. (h) ITAT Mumbai Bench in case of Frigsales (India) Ltd., (supra) held that a receipt which is not in the nature of income cannot be taxed as income u/s. 115JA. The head notes of the case reads as under:- "Section 115JA, read with section 50, of the Income-tax Act, 1961 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to be allowed even while computing Book Profit u/s 115JB of the Act. 39. Hon'ble Madras High Court in the case of CIT vs Metal Chromium Plater (P) Limited (2016) 97 CCH 80 (Mad) while dealing with the issue of allowability of exemption u/s 54EC in computing Book Profit u/s 115JB, it has been held that levy of tax u/s 115JB is on the book profits after effecting various upward and downward adjustments as set out in Explanation 1 to Sec 115JB (2). The provisions of sub-section (5) of Sec 115JB open the assessment to the application of all other provisions contained in the Income Tax Act except if specifically barred by that section itself. Accordingly, it has been held that the adjusted book profits would be further eligible to the benefits set out in the other provisions of the Act, including section 54EC. Revenue appeal filed against the decision of Hon'ble High Court has since been dismissed by the Hon'ble Apex Court in Civil Appeal No. 9620 of 2018 dated 17-09-2018. 40. Further Hon'ble Karnataka High Court in the case of Best Trading and Agencies Ltd vs DCIT (2020) 428 ITR 52 (Kar) has held that as per sub-section (5) of Sec 115JB, the application of other provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec 115JB, principles laid down in the decisions of Hon'ble Karnataka High Court in Best Trading (supra) and Hon'ble Madras High Court in Metal Chromium (supra) (where departmental SLP has been rejected by Hon'ble Supreme Court), are squarely applicable. 45. Hon'ble High Court in the case of CIT-III, Chennai Vs. Metal & Chromium Plater Private Limited reported at 76 taxmann.com 229 (Madras) has held that "6. The allowance or otherwise of the claim under Section 54AC has to be seen in the context of the provisions of Section 115JB which is a self contained code of assessment. The levy of tax is on the 'book profits' after effecting various upward and downward adjustments as set out in terms of the Explanation thereto. The provisions of subsection (5) of s. 115JB open the assessment to the application of all other provisions contained in the Income tax Act except if specifically barred by that section itself. S. 115JB (5) reads as follows: '(5) Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section.' 7. Thus, the adjusted book profits would be further eligible to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmaceuticals Industries Ltd vs ACIT in ITA No. 1462 & 1463/Ahd/2018 dated 24-08-2022 wherein it has been held that amount of remuneration not allowed as deduction in the hands of the Partnership firm cannot be subject to tax in the hands of the partner. Thus, once the receipt is not taxable then the same cannot be made subject to tax under the provisions of MAT while computing book profit u/s 115JB of the Act. Similarly, in ACIT vs JSW Steel Ltd (2020) 180 ITD 505 (Mum), while dealing with the issue of taxability of sales tax subsidy has held that when a particular receipt is exempt from tax under the Income Tax Law, then the same cannot be considered for computing Book Profit u/s 115JB of the Act. In the appellant's own case the above issue has been decided by the Hon'ble jurisdictional Rajasthan High Court for Assessment years prior to insertion of section 2 (24) (xviii) of the Act, which has held that capital receipt which is not liable to tax cannot be subjected to MAT and hence are required to be excluded while computing Book profit u/s 115JB of the Act. 48. Coming to decisions relied up on by the Ld. CIT(Appeals) while deciding the issue against the assessee in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome and 18.5% of the said book profit will be the tax payable by the corporate assessee on such total income. Because of the non-obstante clause, this provision of sub-section (1) for levy of tax on book profit, overrides other provisions of the Act where under tax can be levied only on its total income. The non-obstante clause has overriding effect for sub-section (1) of Sec 115JB and not entire Section 115JB. 52. When two views are possible in a statutory tax provision, the one in favour of the assessee be adopted. This ensures that if there is ambiguity or multiple interpretations, the interpretation that benefits the taxpayer should be preferred. Accordingly, in the background of the afore said discussion, and binding precedents cited, we are of the considered opinion that the order of the ld. CIT (A) is not sustainable. 53. The LD DR could not show us any decision of equal binding strength contrary to the above high court decisions. 54. The question that raises as there are conflicting decisions before us why the issue not referred to special bench, as it is judicial principle that when two conflicting decisions of same strength of co-ordinate benches matter should be refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial. 59. We have heard the rival contention of both the parties. We note that this issue was not raised before the Assessing Officer during the course of assessment proceedings or before the Ld. CIT(A). It is noted that the leasehold rights have been capitalized in the books under the head 'leasehold land'. The aforesaid audited accounts were also submitted before the Assessing officer during the course of assessment proceeding, hence the claim of depreciation on expenditure incurred in respect to acquisition of leasehold rights on land is purely a legal issue for which the relevant facts are already available on record before the authorities. Respectfully following the decisions of Apex Court, we admit the aforesaid question of law on merits raised by the assessee in respect to allowability of depreciation on expenditure incurred in respect to leasehold rights on land. 60. Now, coming to the issue on merits, the bench noted that this issue has already been adjudicated and decided in favour of assessee vide order dated 07.08.2023 in ITA No. 152/JP/2023 for AY 2014-15. The relevant findings of the bench in that year is reproduced hereunder : "21.5 On going through the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, being a pure question of law is also admitted on merits as per our discussion made while admitting additional ground no. 1 of the assessee's appeal. 64. The ld. A/R of the assessee submitted that as per provisions of section 201(1A) of the Act, tax deducted by the deductor must be deposited to Government within a specified period and noncompliance of the same results in levy of interest to be paid to the credit of Central Government. The ld. AR submitted that only such expenditure can be disallowed under section 37 which is offensive or prohibited by law. Interest on delay in deposit of TDS being compensatory in nature, and not penal in nature and hence not required to be disallowed under section 37(1) of the IT Act. The Ld. AR of the assessee also submitted that the said issue is covered in favour of the assessee by decision of Hon'ble Jaipur Tribunal in appellant's own case for AY 2014-15 vide order dated 07-08-2023 (ITA 152/JP/2023). 65. On the other hand, the ld. D/R did not raise any objection on admissibility of additional ground. Further, on merits as well, the ld. DR did not controvert to the contention of the assessee and not brought on record any contrary decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IT Act. The assessee in the return of income had claimed deduction under section 80-IA amounting to Rs. 4, 36, 34, 31, 241/- on the power generated by the eligible units. The power generated by these units, was also captively consumed by the cement manufacturing units (CMUs) of the assessee. Along with the Return of Income, the assessee had also submitted a report in Form 10CCB together with Audited Balance Sheet and Profit & Loss Account. For computing the profitability of units captively consumed by CMU, in terms of provisions of Sec. 80IA(8) and Sec. 80A(6), transfer price at market value or Arm's Length Price was computed based on annual average rate of power sold by the State Electricity Board ('Grid/SEB') during the year to the nearby manufacturing units of independent assessees in the State of Rajasthan @ Rs. 6.98 per unit by applying Comparable Uncontrolled Price ('CUP') Method. The TPO, vide order u/s 92CA(3) dated 30.01.2021 rejected the transfer price adopted by the respondent and made an adjustment of Rs. 2, 70, 66, 00, 914/- by adopting transfer price of power at Rs. 3.88 per unit computed on account of transfer of power by adopting the rate at wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for earlier year would equally apply for the year under consideration post amendment brought under section 80IA(8) of the Act. 30.10. Considering that TPO has disputed the Grid rate not to be the market value in terms of provisions of Section 80A(6) of the Act, we would like to state here that that unlike Section 80IA(8), the word "OR" is missing in provisions of Section 80A(6) of the Act. It is noted that as per provisions of Section 80A(6), if any goods or services whether sold or acquired falls within the category specified domestic transactions of Section 92BA then in such case it is mandatory to adopt market value as per clause (iii) of the aforesaid section i.e. as per Section 92F of the Act. Since, it has already been held that the Grid rate represents market value for the purpose of Section 92F of the Act, it can be concluded that the same represents arm's length price for the purpose of Section 80A(6) of the Act. 30.11. The ld. D/R in his submissions relied strongly on the order of TPO and the method adopted by TPO for determining market rate of power. According to ld. D/R, TPO has adopted the rate of power at which Distribution companies purchase power from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of power by the Cement manufacturing unit due to various factors. Power undertaking provides power on long term supply basis unlike power sold to 3rd parties which are for a short term period. There is no long term commitment available to 3rd parties from Power units unlike available to CMU. This assured long term supply of committed power by the Power unit to the Cement Unit cannot be compared with power sold to 3rd parties where there are no such commitments. Secondly, Power sold to 3rd parties represent distress sale of excess power generated and not utilised by the CMU. Since Power cannot be stored, it has to be compulsorily sold at whatever price is available and hence such sale price cannot represent market price. Thirdly, rate at which power is sold to 3rd parties will not be available to all the customers in the market since this sale rate does not cover various cost factors like transmission bottlenecks for scheduling of open access, transmission losses, and regulatory charges which are all on buyers account and not on the Power undertaking. Therefore, the sale price charged is subdued and does not represent the full landed cost of power to the ultimate consumer. 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Unit (CMU) of the assessee. The aforesaid computation is corroborated vide Form 10CCB filed along with the return of income. The TPO vide his order u/s 92CA(3) dated 31.01.2020 although accepted the method adopted by the assessee but rejected the benchmarking of the respondent and made an adjustment of Rs. 90, 55, 18, 397/- on account of transfer of solid waste by revising PSM (Profit Split Method) to 64% against the PSM of 79.73% adopted by the assessee on the basis of FAR analysis adopted by the Revenue in AY 2013- 14. TPO carried out independent FAR analysis to arrive at 64% rate and further the TPO rejected the element of freight on clinker handling from the market value. On appeal by the assessee, the ld. CIT (A) after upholding the transfer pricing methodology adopted by the respondent, adopted Profit Split Method (PSM) as adopted by Revenue in earlier as well as in subsequent years. Based on FAR analysis, split of 79.73% has been arrived for Solid Waste Management Facility instead of 100% as claimed by the assessee. Accordingly, the ld. CIT (A) deleted the disallowance proposed by TPO of Rs. 90, 55, 18, 397/- vide his Order dated 08.06.2023. 80. Now the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctional and replacement point of view. The process of making treated pond ash is unique and as Solid Waste manufacturing unit is doing this process of converting pond ash to treated pond ash, which is replacing clinker, the profit derived from this activity is to be attributed to this unit only. As per submission of the assessee filed during the course of TP proceeding as well information gathered from cement manufacturing association and searching databases, no information to the contrary was found. TPO could not find comparable cases. Thus, although the process appears to be one, for which there is not much knowledge in public domain and by and large unique in that sense, it does not give right to assessee to allocate entire profit to the unit. Had there been no cement manufacturing unit, there would have been no need for this solid waste management unit. Besides, neither this unit is supplying treated pond ash to any independent party, nor any independent party is supplying treated pond ash to non-eligible unit. Therefore CUP is not available in this case. However as discussed above based on the fact that maximum permissible amount of treated pond ash is 35% and minimum req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAR analysis done by the TPO is not justified. In the show cause letter dated 28.01.2020, all aspects of the FAR analysis done by the assessee has been examined and detailed comments have been given. After critical examination of the replies field by the assessee and details submitted it, has been observed that there are various assets of SWMS located at CMUs and a large number of functions have are also being done using the premises and resources of the CMUs. E.g. Hot air drier uses electricity, which is debited in the books of account of CMUs. Thus functions performed, asset employed as well as risk undertaken are shared between these units (SWMS and CMUs). It has also been clearly established that only client of SWMS is assessee company (i.e. its CMUs) and these CMUs are purchasing 'Treated Pond Ash' only form the SWMS and there is no transaction with independent party. In functional analysis, procurement functions are done solely by the SWMS and there is no role of CMUs. Hence no weights can be given to CMUs Discussed in detail in show cause dated 28.1.2020. It has been clearly observed that neither SWMS is supplying 'treated pond ash' to any independent party now CMUs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sharing of risk is justified. SWMS is subject to various business, legal social, statutory risks etc and brand is owned as a whole. Therefore allocation of 80% weight to SWMS is justified As already discussed in showcause dated 28.1.2020, The SWMS does not take any identity of its own. Any noncompliance will impact production of CMUs and overall brand value of assessee company. Actually brand is not owned by the SWMS but by the company and CMU using around 30-35% of treated pond ash, at least 30% risk is to be shred by CMUs. Thus 70:30 ratio is appropriate on this account. Assets are owned by the SWMS hence weights given by the assessee are correct. As regards weights given towards assets, the assessee has not given any specific reason but had made just a general submission. This issue has been discussed in detail in show cause dated 28.1.2020. As no specific details of change in assets at CMUs has been given by assessee, part of assets are consuming power debited in CMUs, allocation of weight of 30% to CMUs is appropriate. 84. Against the above contentions of TPO, the assessee contended the following before the Ld. CIT (A) - 3.0 Treated Solid waste used by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing Unit of the assessee at NIL value. 4.0 Cost Savings Approach is a recognized Method in Transfer Pricing & TPO has erred in stating that for determining the transfer price, functionally comparable products cannot be considered 4.1 The concept of adoption of savings approach to determine revenue has been recognized in various international TP literatures and has also been given recognition by the Indian Government. The respondent relies upon Para 1.139 to 1.143 and 9.126 to 9.131 of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (July 2017) ('OECD Guidelines') [Page no. 248-252 of CLPB] and Para B.1.10.14, B.1.10.15 and D.3.7.1 of United Nations Practical Manual on Transfer Pricing for Developing Countries, 2017 ('UN Manual') [Page no. of 240-244 of CLPB] wherein concept of location savings and its allocation among the MNE group has been recognised. 4.2 Further, reliance is placed on Para 1.109 of the OECD Guidelines [Pg No. 247 of CLPB] wherein it has been stated that uncontrolled transactions involving different product but having similar functionality may be considered as a comparable. Hence, assessee adopting trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OECD). However, the organization has been supporting efforts of tax administration in India to properly and effectively administer and implement Transfer Pricing Policy. A useful reference can always be made to OECD Guidelines, for the purposes of resolving dispute of transfer pricing in India, subject, however, to statutory regulations." 85. We also find that the above issue has been dealt by this Bench in AY 2014-15 vide order dated 7-8-2023 in ITA No. 142/JP/2023. The findings of co-ordinate Bench is reproduced herein below:- "34.1. We find that the ld. CIT (A) while dealing with the matter has considered the various aspects of the matter vigorously at great length and following the judicial precedents of Hon'ble Supreme Court and Hon'ble High Courts, partly allowed the claim of the assessee by observing in para 9.5 to 9.13 of his order as under : "9.5 The AR filed orders of TPO passed for subsequent AYs i.e. AY 2015- 16, AY 2016-17 and AY 2017-18. It was pointed out by the AR that in all these years, the TPO has accepted the approach adopted by the appellant, though with certain modifications. It is only the current assessment year i.e. AY 2014-15, that the TPO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rajar Mills Ltd. in Tax Case(Appeal) Nos. 68 to 70 of 2010 dated 07-06-2010, it was held that captive consumption of power generated by the assessee from its own power plant would enable the assessee to derive profit and gains by working out the cost of such consumption of power in as much as the assessee is able to save to that extent which would certainly be covered by Sec. 80IA (1). SLP filed against the aforesaid decision has since been dismissed by Apex Court in CIT vs. Thiagarajar Mills Ltd. (CC 27172719/2011) (SC) dated 21-02- 2011. Further, Hon. Bombay High Court in Hindustan Petroleum Corporation Ltd. vs. DCIT [(2010) 328 ITR 534 (Bom - HC)], has observed that the savings in consumption of Low Sulphur Heavy Stock (LSHS) as fuel due to the use of steam generated as a by-product in the generation of electricity is allowable for deduction u/s 80IA. Thus, aforesaid judgments show that courts have also 102 recognized the concept of savings approach based on which profitability of the undertaking was computed and accordingly the deduction u/s 80IA of the Act was claimed." "9.9 Based on an inquiry from NTPC made u/s 133(6) of the Act, the TPO has given a finding that pond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Cement Manufacturing Unit (CMU) based on functions, assets and risk analysis carried on by the two entities, i.e., SWMS & CMU. Thus, Profit Split Method seems to be the most appropriate method in the instant case and a profit share needs to be allocated to the CMU as well. Identical methodology has been applied by the TPO/AO in earlier year i.e., AY 2013 -14. For the year under consideration the appellant has claimed 100% profits of SWMS. However, TPO is of the view that entire profits cannot be attributable to SWMS and accordingly, attributed a part of the profits to SWMS and balance to CMU based on FAR analysis. Since in the preceding year, above split has been derived by department at 79.73%, there is no reason why the appellant should be granted 100% profits as attributable to SWMS in the current year. The above order of A.O. on this issue in A.Y. 2013-14 has attained finality since the appellant has not filed any appeal on this issue. This view gets support from the decision of Supreme Court in Radhasoami Satsang. vs. CIT [1992] 193 ITR 321 (SC) that the principle of consistency is applicable in tax matters." 9.13. In view of the above, applying the split of 79.73% in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout there being change in facts of the case and hence FAR done @64% by the TPO in current year is not correct. (c) Since solid waste management unit is responsible for doorstep delivery of clinker to the Cement unit, therefore entire savings on account of clinker including freight and handling expenses of such clinker at cement unit should be considered as transfer price of solid waste. Freight should therefore form part of benchmarking model. 88. Considering the above findings, we find no infirmity in the order of the ld. CIT(Appeals) and accordingly the order of the ld. CIT(Appeals) is upheld. The ground no. 2 of the Revenue is dismissed. 89. Ground No. 3 relates to allowing the appeal of the assessee by deleting the disallowance of Rs. 19, 34, 58, 626/- on account of deduction u/s 80IA on account of Water Treatment System. 90. The brief facts of the case are that the assessee has developed and is operating and maintaining a separate Water Treatment System ('WTS'), being RO Plant at Beawar and Ras for processing of raw water into purified drinking water. The said water treatment system is 'Infrastructure Facility' as defined in Explanation to section 80- IA(4)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been dealt by this Bench in AY 2014-15 vide order dated 07-8-2023 in ITA No. 142/JP/2023. The findings of this Bench is reproduced herein below :- "38. We have heard the rival submissions, perused the material on record and gone through the orders of the revenue authorities and the case laws cited before us. On perusal of the record, we noticed that similar claim of the assessee has been allowed by the AO for the preceding assessment years 2011-12 and 13-14 vide order dated 30.04.2012 and 16.12.2014 respectively. The AO adopted the rate of Rs. 2.50/ltr and Rs. 2.75/ltr for the assessment years 2011-12 and 2013-14 respectively determining the Fair Market Value of Water consumed captively, allowed the claim of the assessee. The method adopted by the appellant for determination of realizable market value of water was consistently accepted by the departmental authorities from assessment years 2011-12 to 2013-14. In this regard, reference may be made to the decision of ITAT Kolkata in the case of A T & S India (P) Ltd vs. DCIT (2018) 94 taxmann.com 16 Kol.Trib.) wherein it was held that when the department has been consistently accepting the assessee's method of bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the TPO has not substantiated that any of the above four conditions was applicable in this case. Therefore, I am of the view that the TPO was not justified in disregarding the TP Study carried out by the appellant. 10.6 The TPO has rejected the benchmarking analysis of appellant on the ground that bulk purchase cannot be compared with the retail purchase and quotations cannot be considered as basis for determining the price of articles produced for captive consumption. However, the appellant has shown relying upon Hon'ble Delhi High Court in PCIT vs. Toll Global Forwarding India Pvt Ltd. [(2016) 381 ITR 38 and Gujarat High Court in CIT vs. Adani Wilmar Ltd. (2014) 363 ITR 0338 that benchmarking on the basis of quotations received from third parties is a recognised method under Rule 10AB of the Income tax Rules, 1962. 10.7 It is observed that TPO has not questioned the genuineness of the quotation but has merely ignored the quotation in view of his opinion that bulk purchase cannot be equated with the retail purchases. Thus, the TPO has not doubted the genuineness of the quotation. As could be noted from the said quotations, purchase requirement is of 140 KL of water pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, Cost Plus Method mandates application of Gross Margin of comparable transactions whose reliable data are not available in public domain. For these reasons, I am of the view that benchmarking adopted by appellant cannot be brushed aside and thus CPM cannot be applied in the present case. 10.11 Most important observation in this issue is that AO has accepted the method adopted by appellant in earlier assessment years from AY 2011-12 to AY 2013-14. When year after year, department has not disputed the method adopted by appellant, rejecting the same in one particular year is not justified. As there is no change in the facts and circumstances of the case in the current year, in view principle of consistency laid down by Apex Court in Radhasoami Satsang vs. CIT [[1992] 193 ITR 321 (SC), the TPO's action in rejecting the benchmarking model of the appellant and proceeding to do a fresh analysis in current year is not found to be sustainable. 10.12 In view of the above discussion, I am of the considered view that the benchmarking analysis adopted by the appellant based on quotations received from Bisleri India Pvt Ltd. after making necessary adjustments on account of department& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as an arm's length price. In this view of the matter, the business model said to have been adopted by the assessee, in principle, meets the test of arm's length price determination under rule 10BA as well." The above decision of the Delhi Tribunal has since been upheld by the Hon'ble Delhi High Court in PCIT vs. Toll Global Forwarding India Pvt. Ltd. 381 ITR 38 (Del-HC)]. Similar view has also taken in ACIT vs. Adani Wilmar Ltd., 64 SOT 0122 (Ahd - Trib.) as affirmed by Hon'ble Gujarat High Court in CIT vs. Adani Wilmar Ltd., 363 ITR 0338 (Guj-HC). 39. We, therefore, considering the detailed findings of the ld. CIT (A) along with the judicial precedents of the Hon'ble Supreme Court, Hon'ble High Courts and the various benches of the Tribunal, find no infirmity in the order of the ld. CIT (A), accordingly the order of the ld. CIT (A) is upheld. The ground of the Revenue is dismissed." 97. The Ld. DR during the course of the hearing accepted that the issue is squarely covered in favour of the assessee by the above order of Tribunal in appellant's own case. 98. We have considered the stand taken by Revenue in the assessment and rival submissions before us. We have examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tability, the assessee has computed transfer price of services provided by RIFS to eligible/non-eligible units by applying the provisions of Sec. 80IA(8) r.w.s 92F of the Act i.e. at arm's length price of such services. Revenue, for the purpose of services provided by RIFS, was computed by considering savings on account of gross road freight & handling charges payable for transportation of goods by road to the rail head, Bangur Gram (i.e. nearest railway station) and rail freight from rail head to the final destination, determined as per the tariff notified by the Indian Railways. Further, the assessee has also applied PSM and allocated 15.47% of the profits to its Cement Manufacturing Unit ('CMU') based on an effective Functional, Assets and Risk ('FAR') analysis. TPO in the order u/s 92CA(3) dated 30.01.2020 rejected the model adopted by the assessee and made an adjustment of Rs. 18,05,65,450/- rejecting the Profit Split Method adopted by the appellant and applying Transactional Net Margin Method by applying the margin earned by the comparable companies. Aggrieved by the order of AO, assessee preferred appeal before ld. CIT(A), who after making detailed analysis on the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 66,86,27,656/- for rail system u/s 80-IA is allowed." However, for the assessment year under consideration, we find that the AO determined the ALP based on a fresh analysis even when there was no change in facts for AY 2014-15 as compared to earlier years. The AO without giving any cogent reasons rejected the benchmarking adopted by the appellant and undertaken fresh transfer pricing analysis. In support of assessee's claim, the ld. A/R placed reliance on the following judicial pronouncements :- - Radhasoami Satsang vs. CIT, 193 ITR 321 (SC) - CIT vs. Neo Poly Pack (P) Ltd, 112 Taxman 363 (Del.) - PCIT vs. Quest Investment Advisors Pvt. Ltd. - ITA No. 280 of 2016 dated 28.06.2018 (Bom.) - Racold Thermo Ltd vs. DCIT, 63 taxmann.com 215 (Pune-Trib.) - Vishay Components India P Ltd vs. Addl.CIT, 88 taxmann.com 427 (Pune-Trib.) The ld. CIT (Appeals) has discussed the matter at great length and following the OECD Transfer Pricing Guidelines and Practice Manual for Multinational Enterprises and Tax Administrations, partly allowed the claim of the assessee by observing in para 11.4 to 11.12 of his order, as under :- "11.4 The appellant has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the transfer pricing methods as laid down u/s 92C of the Act. The TPO simply rejected the method applied by the appellant i.e. PSM which is not correct. After having discussed the approach of the TPO, let me decide upon the correctness of the method applied by the appellant. 11.7 The basic issue that needs consideration is the adoption of cost savings approach to determine the arm's length price under transfer pricing regulations. As noted in earlier paragraphs, in view of OECD Guidelines and Practice Manual, the concept of cost savings and its allocation among group entities is a recognized and well accepted concept. The appellant has also applied split on the revenue derived by savings approach and allocated 15.17% of the profits to the cement manufacturing unit based on the Function, Assets and Risk analysis. Therefore, the inference drawn by TPO that such savings approach is not recognised under transfer pricing laws is not correct. It has been shown that before the railway sidings were set up, the appellant was using road for transportation of coal, clinker & other materials. The cost of road transportation being quite high, the appellant developed and installed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... savings model adopted by appellant has resulted in a margin of 9.92% on turnover. Hence the TPO's opinion that the Rail Infrastructure Facility System of the appellant has not resulted in any profit is not correct. It is also seen that the Indian Railways has a monopoly in operation of Railways in India and the tariff with respect to the same is determined in accordance with the applicable enactment of Railway regulations. The railway freight tariff is the charge for normal movement of goods without having created a specific infrastructure facility for a customer. If the Railway Authorities provides any such specific facility, it would not charge normal fares but would also charge some additional freight which is not covered in the tariff. Thus, the opinion of TPO in this regard is not correct. It has been pointed out by the appellant that neither the Indian Railways nor any third party would set up a Rail System for appellant's captive use nearby to appellant plant locations. Hence, the appellant has rightly identified revenue based on the value addition created by the Railway Infrastructure Facility System in the business of the appellant. 11.11 However, I do not agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the hearing contended the reasoning given in the assessment order but has not disputed that the issue is squarely covered in favour of the assessee by the above order of Tribunal in appellant's own case. 108. We have considered the stand taken by Revenue in the assessment and rival submissions before us. We have examined the order of relevant authorities from time to time and facts relevant in the context of Appellant's claim of tax holiday in this case. The appellant is eligible for tax holiday u/s 80IA in respect of its Rail System. Question is on quantum determination. Considering relevant facts & rival submissions and considering the above findings of ITAT in assessee's own case for AY 2014-15, we find no infirmity in the order of the ld. CIT(Appeals), accordingly the order of the ld. CIT(Appeals) is upheld. The ground no. 4 of the Revenue is dismissed. 109. Hence, departmental appeal filed for AY 2015-16 vide ITA No. 489/JPR/2023 is dismissed. For Assessment year 2016-17 110. The assessee filed its return of income for the year under consideration on 30.11.2016 disclosing total income of Rs. 65,38,39,820/- under the normal provisions of the Act and book profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 113. First, we take up the appeal of the assessee in ITA No. 496/JPR/2023. 114. Ground No. 1 relates to rejecting the impugned assessment order u/s 143(3) r.w.s. 144C passed by Ld. AO as invalid and void ab initio since it was not passed in accordance with the provisions of Section 144B(1)(xvi)(b) of the Act. 115. Before us, the ld. AR of the assessee has submitted that the said ground being technical in nature is not being pressed in the interest of substantive justice. Hence, the said ground is not being adjudicated. Ground No. 1 of appeal is therefore dismissed. 116. Ground No. 2 relates to rejecting allowability of Reliability charge of Rs. 1.50 per unit in computing Transfer Price of Power for the purpose of deduction u/s 80-IA of the Act. The said ground relates to non-consideration of component of reliability charge of Rs. 1.50 per unit which the power undertaking is eligible to charge for providing uninterrupted and quality power supply to the cement manufacturing units of the assessee. 117. Ground No. 2 in this appeal is same as Ground 2 of assessee's appeal for AY 2015-16 on allowability of Reliability charge of Rs. 1.50 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010) for expansion carried out at units in Ras and Kushkhera & for setting up new units at Suratgarh in the state of Rajasthan; under Bihar Industrial Incentive Policy 2011, on account of setting up of new unit at Aurangabad in the State of Bihar; under New Industrial Policy, 2003 read with Notification No. 50/2003 of Central Excise dated 10-06-2003 for setting up of new unit at Roorkee in the State of Uttrakhand and under UP Infrastructure & Industrial Investment Policy, 2012 on account of setting up of new unit at Bulandshahr in the State of Uttar Pradesh. The assessee claimed the above incentives as capital receipt in its return of income vide notes forming part of the computation of income. Ld. AO did not consider the entire claim aggregating to Rs. 6,20,91,72,703/- and hence in effect disallowed vide his impugned order u/s 143(3) dated 16.05.2021. 124. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) vide his order dated 08.06.2023 maintained the order passed by AO and held that claim cannot be allowed in view of amendment brought in by Finance Act, 2015 w.e.f 01-04-2016, wherein Sec 2(24) has been amended by in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Mum HC in Serum Institute of India Vs- UOI (WP No. 3735 of 2021 dtd. 4-12-23) is not applicable to the facts of the present case, as the constitutional validity of the amendment to section 2(24), amending the definition of 'income' has not been challenged by the Appellant. (d) Further, in the case of Serum (supra), the new unit was set up, claim was lodged and pertained to years, all after AY 2016-17, that is after the definition of income was amended. The said facts can be clearly distinguished in case of the appellant in respect of its incentives, which pertain to years before AY 201617 and to such incentives, without prejudice to other submissions, the aforesaid amendment has no application. (e) Mere inclusion of subsidy etc. in the definition of 'income', without corresponding inclusion under any of the 'heads of income', cannot be subjected to income tax Reliance is placed on the decisions of Hon'ble SC in Nalinikant Ambalal Mody -vs.- CIT [1966] 61 ITR 428 (SC) and Hon'ble Calcutta High Court in CIT -vs.- Justice R . M. Dutta (1989) 180 ITR 86 (Cal) (f) Subsidy, though added in the definition of income by way of deeming fiction, has not been included in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o one another and income which falls within one head cannot be assigned or taxed under another head. Section 28 is the charging section for the head Profits and Gains of business or Profession. On perusal of the said section, it can be seen that the section provides an exhaustive list of income which will be chargeable under the said head. Capital subsidy does not fall under any of the clauses of Section 28; hence it cannot be treated as business income. Section 56, which is the charging section for the head 'Income from other sources' covers income of every kind which is not chargeable to tax under any other heads of the income. It means that it is only when income is not chargeable under any other preceding heads, then the same can be brought within the purview of taxation under 'other sources'. However, if an income falls under a particular head, but if it cannot be brought to tax under that head for any reason like absence of computation provisions, than resort cannot be made to tax it under the head 'income from other sources'. 127. On the other hand, the ld. DR representing the revenue supported the order of the ld. CIT (A). The ld. DR stated that though the assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider the entire claim aggregating to Rs. 6,20,91,72,703/- and hence in effect disallowed vide his impugned order u/s 143(3) dated 16.05.2021. Before the ld. CIT (A) the assessee contended that * Claim lodged through notes to return of income should be considered by the ld.AO. * Subsidy received on account of carrying out expansion or setting up new unit is capital in nature. * Issue has been decided in favour of the assessee in earlier years. * Amendment in the definition of income u/s. 2(24)(xviii) without corresponding provisions under the charging heads of income cannot be taxed under the Act. * Legal fiction created u/s. 2(24)(xviii) cannot be extended further by importing further fiction u/s. 28. * Different treatment under Direct Tax Code, 2013 * Decision of the Mayur Uniquoters Ltd., Jaipur bench All these contentions though considered by the ld. CIT (A) but not found acceptable as the amendment made by the Finance Act, 2015 w.e.f. 01.04.016 by inserting new clause (xviii) to section 2 of the Act provide that Income shall include any "assistance" in the form of subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), amending the definition of 'income' has not been challenged by the assessee. Further, in the case of Serum (supra), the new unit was set up, claim was lodged and pertained to years, all after AY 2016-17, that is after the definition of income was amended. The said facts can be clearly distinguished in case of the appellant in respect of its incentives, which pertain to years before AY 2016-17 and to such incentives, without prejudice to other submissions, the aforesaid amendment has no application. Mere inclusion of subsidy etc. in the definition of 'income', without corresponding inclusion under any of the 'heads of income', cannot be subjected to income tax. Reliance was placed on the decisions of Hon'ble SC in Nalinikant Ambalal Mody -vs.- CIT [1966] 61 ITR 428 (SC) and Hon'ble Calcutta High Court in CIT -vs.- Justice R . M. Dutta (1989) 180 ITR 86 (Cal). Thus he has submitted that subsidy, though added in the definition of income by way of deeming fiction, has not been included in the charging section 28, unlike the erstwhile proposed Direct Tax Code, where it was proposed to be added also in the charging section 33. Without prejudice to the aforesaid submissions, claim of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, on the ground raised by the assessee after going through the records and arguments of both the parties noted as under : a) Under section 2(24) of the Act a capital receipt cannot be charged to income tax unless it is specifically included as income therein. b) The Finance Act 2015 introduced section 2(24)(xviii) wherein any form of subsidy was brought into definition of income. Such subsidy maybe in case or in kind. It also includes grant cash incentive duty drawback, waiver, construction or reimbursement of all kind. c) The exceptions are provided under clause (a) the subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43; or (b) the subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government, as the case may be; d) Therefore with effect from 1.4.2016 all such receipts are income. e) All prior decision of all courts holding it to be capital receipt are now no more good laws. f) Intention of this amendment is to be support the law w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the landscape introducing sub clause (xviii) to section 2(24) of the Act. This amendment defined any assistance in the form of subsidy, grant, cash incentive, duty drawback, waiver, concession reimbursement provided by the Central or State as income, hence taxable, unless used to determine the actual cost of an asset. This amendment sought to end disputes by making all subsidies taxable unless they fell under an exclusion category; 133. In the light of the above discussion, we do not find any merits in the grounds so raised by the assessee, ergo we dismiss the ground no. 5 raised by the assessee. 134. Ground No. 6 (Additional Ground) relates to allowability of the claim of depreciation @25% on expenditure incurred in respect to acquisition of leasehold rights on land u/s 32(1)(ii) being business or commercial right of similar nature. 135. We note that the facts of this issue are identical to Additional Ground No. 1 raised for AY 2015-16 in ITA No. 500/JPR/2023. Based on our detailed findings given in AY 2015-16, this additional ground is allowed. Hence, AO is directed to grant depreciation @25% on such leasehold rights acquired in accordance with section 32(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Appeal for AY 2015-16 on deduction u/s 80IA. The ld. A/R for the assessee submitted that for AY 2016-17, the facts are similar to the facts for AY 2015-16. In this year also the assessee has computed transfer price of water on the basis of quotation obtained from Bisleri International Pvt. Ltd. These grounds have been extensively dealt with in Gr. 3 of Departmental Appeal for AY 2015-16 in ITA No. 489/JPR/2023 and in the light of our findings recorded therein, we find no infirmity in the order of the ld. CIT (A), accordingly the order of the ld. CIT (A) is upheld. The ground no. 3 of the Revenue is dismissed. 144. Ground No. 4 relates to allowing the appeal of the assessee by deleting the disallowance of Rs. 10,78,49,923/- on account of deduction u/s 80IA of Rail system due to adjustment of Transfer Pricing. 145. Ground No. 4 in this appeal is same as Ground 4 of Departmental appeal for AY 2015-16 on deduction u/s 80IA. The ld. A/R submitted that for AY 2016-17, the facts are similar to the facts for AY 2015-16. In this year also the assessee has adopted transfer price of services provided by RIFS to eligible/non-eligible units by considering savin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 144C to file objections before the Dispute Resolution Panel, the AO passed final order under section 144C read with section 143(3) of the Act was on 12.08.2021 by making various disallowances/additions to the returned income of the assessee as under:- - Reduction in claim u/s 80-IA on power undertakings (Rs. 4,82,58,43,293/-) - Reduction in claim u/s 80-IA on Solid Waste Management System (Rs. 3,22,46,50,921/-) - Reduction in claim u/s 80-IA on Water Treatment System (Rs. 21,72,02,610/-) - Reduction in claim u/s 80-IA on Rail System (Rs. 4,70,31,231/-) - Disallowance of Education cess (Rs. 11,89,88,742/-) - Erroneous addition to total income w.r.t cash receipt by way of over invoicing of Rs. 1,00,00,000/- 148. Feeling dissatisfied with the order of the assessment, the assessee preferred an appeal before the Commissioner of Income Tax, (Appeals-44), Delhi. The ld. CIT (A) based on the contentions raised and considering the evidence and judicial decisions cited partly allowed the appeal of the assessee. 149. Both assessee and revenue are not satisfied with findings of the ld. CIT(A), preferred the present appeal before this tribunal. The issues and finding bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that during the year under consideration, the assessee company vide Form 10CCB has claimed deduction u/s 80-IA amounting to Rs. 7,53,09,76,895/- in respect to its Solid Waste Management System out of which Rs. 3,69,14,17,823/- pertains to claim w.r.t. solid waste being fly ash and Rs. 3,83,95,59,072/- pertains to claim of solid waste being pond ash. The assessee while filing of return of income had adopted a conservative approach and restricted the claim of deduction u/s 80-IA on solid waste management system (Fly Ash) to Rs. 1,01,85,41,499/- in the computation of total income based on the stand taken by TPO in earlier years. Balance claim of Rs. 2,67,28,76,324/- was made vide notes forming part of computation filed along with the return of income. 157. During the course of assessment proceedings u/s 143(3), the assessee company had also filed a modification petition on 13.04.2021 before A.O for revision in claim of deduction u/s 80-IA on eligible solid waste management system. Further, during the course of assessment proceedings, a letter before the ld. AO was also filed on 22.07.2021 for allowing the deduction u/s 80-IA based on claim filed in Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Form 10CCB. Aggrieved by the Order of A.O, the appellant filed rectification petition. It is informed that partial relief was granted by the AO vide rectification order u/s 154 r.w.s 143(3) dated 22.09.2021 where a claim of Rs. 1,01,85,41,499 was only allowed to the appellant. 9.3 The submission of the assessee before the ld. CIT(A)xxxxxx. xx 9.4 It is observed that the appellant while computing total income in its return of income made a claim of deduction u/s 80IA on Solid Waste Management System (Fly Ash) to Rs. 1018541499/- in the main computation of total income and the balance claim of Rs. 2672876324/- was lodged vide notes filed along with the return of income. 9.5 Section 80A(5) states that no deduction shall be allowed to the assessee in case of failure to make the claim of deduction under Chapter VIA in the return of income. Further, section 80AC requires that such return of income should be filed within the time limit specified u/s 139(1) to claim deduction under Chapter VIA. 9.6 In view of section 80A(5) r.w.s. 80AC, the claim of Solid Waste Management System (Fly Ash) has rightly been restricted to Rs. 1018541499/- as claimed in the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputation of deduction u/s 80HHC & exemption u/s 10A respectively during assessment proceedings were not considered as new claim & hence were allowed to the assessee. vi. Notes to the Return form an integral part of the Return of Income and hence any amount claimed vide the note, is amount claimed in the Return and cannot be disallowed on the contention that the claim was not lodged in the Return. Reliance is placed on - * ACC Limited -vs.- ACIT (ITA No. 6082/Mum/2014 dated 16-03-2023)(Mum ITAT) * CIT -vs.- B. G. Shirke Construction Technology (P.) Ltd [2017] 395 ITR 371 (Bom.) * ACIT -vs.- SIL Investment Ltd. (ITA No. 2431/Del/2010 dated 04-05-2012) (Del ITAT) vii. CIT (A) has itself confirmed in the order dated 08-06-2023 that deduction u/s 80-IA on SWMS of INR 748.76 Crs should be allowed to the assessee. Therefore, restricting the said claim merely because the claim in the computation part of the Return is lower, is totally unjustified, as it is the duty of the assessing & the appellate authorities to determine correct tax liability of the assessee. Reliance is placed on the decision of Hon'ble SC in the case NTPC -Vs- CIT (1998) 229 ITR 383 (SC). viii. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made vide Notes forming part of the return filed along with the computation and forming integral part of the return. It is worthwhile to note that TPO has considered the full claim of Rs. 753.10 Crs. as per Form 10CCB in his order and out of the above amount proposed adjustment or disallowance to the tune of Rs. 322.47 Crs. In appeal, the above disallowance was reduced to Rs. 4.34 Crs. by the Ld. CIT (A) thereby allowing the total claim for Rs. 748.76 Crs. However, Ld. CIT (A) thereafter restricted the claim to Rs. 485.21 Crs. on the contention that claim made vide notes to return cannot be said to be claim lodged in the return and therefore Rs. 263.55 Crs., thus, stood disallowed by Ld. CIT(A). 166. We have gone through the decisions as referred by Ld. AR during the course of hearing. We find that there are various decisions on this issue wherein it has been held that notes to the return form an integral part of the return of income and hence any amount claimed vide notes, is amount claimed in the return and cannot be disallowed on the contention that the claim was not lodged in the return of income. The co-orindate bench of Mumbai Tribunal in ACC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine correct tax liability of the assessee as laid down by Hon'ble Apex Court in NTPC vs CIT (1998) 229 ITR 383 (SC). We further find that the full claim was quantified and reflected in the audited accounts of SWMS as well as in Form 10CCB both of which were duly filed along with the return of income. This fact makes the prayer of the appellant all the more stronger. When the claim is allowed on merit by CIT (A) and is in terms of audited accounts and form 10CCB uploaded with return of income and also in terms of amount reflected in the return read with notes forming part of the return, there is no reason to restrict the claim to the amount reflected in the computation part of the return. AO is therefore directed to allow deduction u/s 80IA on account of solid waste management system to the tune of Rs. 748.76 Crs. Based on the above finding of facts, this ground no. 3 of the assessee is decided in favour of the assessee and is allowed. 170. Ground No. 4 relates to confirming the disallowance made by the AO on account of claim of Education Cess of Rs. 11,89,88,742/-. 171. Ground No. 4 in this appeal is same as Ground 3 of assessee's appeal for AY 2015-16 in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been shared with the appellant nor opportunity has been given to cross verify the same. Disregarding the same, the AO proceeded to pass order u/s 143(3) dated 12-08-2021 making the disallowance. 176. Feeling dissatisfied with the action of the ld. AO the assessee taken the ground in the first appeal before the ld. CIT (A) who has dismissed the grounds of appeal of the assessee by observing as under : 16.6 I have gone through the facts of the case available on record and the contentions raised by the appellant and the A.O. As stated by the A.O. during the course of survey proceedings u/s 133A on the premises of Shiv Group, Gandhidham, a pen drive has been impounded wherein the name of the appellant has been mentioned in one of the excel files. Further various statements have been recorded of the personnel of Shiv Group on the basis of which it has been stated that cash has been sent to appellant by the Shiv Group. Based on such information the A.O. has issued notice to the appellant and carried out enquiry during assessment proceedings. Hence, in my view, the AO was correct in adding the amount to the total income of the appellant since he had necessary information available wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements contained in it] * CIT -vs.- Bhanwarlal Murwatiya (2008) 215 CTR 489 (Raj): When none of the witnesses were examined before the A.O., and assessee did not have any opportunity to cross examine the statements given by the witnesses, addition cannot be made by AO. * Heirs and Legal Representatives of Late Laxmanbhai S. Patel -vs.- CIT (2010) 327 ITR 290 (Guj.) [Addition made based on statement recorded without furnishing the same to the assessee or without giving him an opportunity to cross-examination was required to be deleted on the ground of violation of the principles of natural justice] vi. Addition based on materials collected and statement recorded during survey u/s 133A are not sustainable: * CIT -vs.- S. Kadher Khan Son (2008) 300 ITR 157 (Mad.) affirmed by Apex Court in (2013) 352 ITR 480 (SC): [Materials collected and the statement recorded during the survey u/s 133A are not conclusive piece of evidence by itself] * PCIT -vs.- Sunshine Import & Export P. Ltd. (2020) 424 ITR 195 (Bom.): [Statement recorded u/s 133A does not have any evidentiary value and that materials or information found in the course of survey proceedings could not be a basis for mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 22-07-2021 again requested the AO to share the documents which has been relied upon based on which addition was proposed in draft order. At this time the appellant filed a confirmation from the above party before the AO which stated that all transactions entered with the assessee by the said party were genuine and there was no over invoicing. 182. Thus, it is evident that the ld. AO has merely made an allegation but has not provided supplied any relied upon documents / details. He has also not provided the alleged statement recorded, pen drive found or any appraisal report forwarded by Investigation wing of the revenue from Gandhidham, which recommended taking action against the assessee. Without these primary and basic details / documents how addition can be made on the third party statement or evidence. It is a settled principle that loose papers and electronic data not maintained regularly during the course of the business cannot be considered as admissible evidence as per Indian Evidence Act, 1872. Not only that the Hon'ble apex court in the case of M/s. Andaman Timbers Industries Vs. Commissioner of Central Excise, Kolkata-II, held that not allowing the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Serum Institute of India Private Limited (Supra) and the amendment made vide Finance Act, 2015 by which sub clause (xviii) to section 2(24) of the Act is inserted, for which we have in detailed given our finding here in above while dealing with the ground no. 5 of the assessee's appeal in ITA no. 496/JPR/2023. The said finding recorded there in squarely applies to ground no. 6 raised by the assessee and for the sake of avoiding repetition we have not repeated the same. Based on that finding the ground no. 6 raised by the assessee stands dismissed. 187. Ground No. 7 relates to exclusion of deduction under section 80IA and 80-IC in computing Book Profit under section 115JB of the Act. 188. Ground No. 7 in this appeal is same as Ground 4 of assessee's appeal for AY 2015-16 in ITA No. 500/JPR/2023 on claim of deduction under section 80IA and 80-IC in computing Book Profit under section 115JB of the Act wherein this ground has been extensively discussed. Accordingly, AO is directed to compute Book Profit u/s 115JB of the Act after allowing deduction under Chapter VI-A, Part C, particularly u/s 80IA & u/s 80IC of the Act Thus ground no. 7 of appeal is therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations on computation of Book Profit for Ind AS compliant companies has also been issued vide CBDT Circular dated 25.07.2017. Therefore, the notional amount on adoption of Ind AS taxable u/s 115JB due to specific amendments in Sec. 115JB cannot be excluded. In view of the same, these grounds are dismissed. 193. Feeling dissatisfied, from the findings of the lower authority the assessee has challenged that finding of the lower authority before us. In support of the ground so taken ld. AR of the assessee submitted their contention in a written submission the same reads as under : i. Notional Income of INR 676.49 Crs was credited to Retained earnings as on 01-04-2016 on first time adoption of Ind-AS on account of following: Sl. Particulars Amt 1 Fair value on Zero Coupon Bonds 639.68 2 Amortization of Premium/Discount on Bonds (0.22) 3 Fair Value on Mutual Funds 22.18 4 Fair value gain/ (loss) on Preference shares 2.62 5 Reversal of Mines Reclamation Expenses (on NPV basis) 12.18 6 Amortization of upfront fees (on NPV basis) 0.05 Total Opening Balance of Ind-AS Adjustments 676.49 1/5th of Opening Balance of Ind-AS Adjustment 135.30 One fifth of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Godhra Electricity Co. Ltd. -Vs- CIT (225 ITR 746) & other decisions, have held that income tax can be levied only on real income and not imaginary or any hypothetical income. Relying thereon, Allahabad HC in this case, held that deferred interest credited to P&L account cannot be subjected to tax, being notional] (d) Objective of MAT provisions is to bring out the true working result by taxing real income of the company: Hon'ble Supreme Court in Indo Rama Synthetics (I) Ltd. -vs.- CIT (2011) 330 ITR 363 (SC) have held that the objective of MAT provisions u/s 115JB is to bring out the true working result by taxing real income of the company and hence amount credited to P&L Account due to reversal of Revaluation Reserve, cannot be subjected to MAT." 194. Per contra, the ld. DR supported the finding recorded in the order of the ld. CIT (A) who has considered the provision of the Act and rightly not considered the contentions of the assessee. 195. We have carefully considered the rival contentions and perused written submissions filed by the assessee. The facts are that due to adoption of Ind AS, the accounts of the company have been prepared which requires vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Ld. AR of the assessee that mark to market /amortized cost as per Ind AS 109 on account of fair valuation of shares and mutual funds (Rs. 108.03 Crs.) are notional income credited to the Profit & Loss. We could not find any corresponding amendment in Section 115JB which brings to tax above amount. In absence of any amendment, we are inclined to agree to the contention of the assessee that the said amount represents notional income credited to P&L and not real income. It is now a settled principle that legislature can bring to tax only real income and not notional income which has not accrued during the year as held by Supreme Court in Godhra Electricity Co. Ltd. Vs CIT (225 ITR 746) and others. Various courts have also analyzed the notional income theory in computing Book Profit u/s 115JB of the Act. The bench noted that the similar issue has been dealt in detailed by the Mumbai Bench of the ITAT in the case of Reliance Industrial Investment and Holdings Ltd. v. Deputy Commissioner of Income-tax 149 taxmann.com 113 (Mumbai - Trib.) where in the ITAT holds that 83. We have already noted in the earlier part of our order that Zero Coupon OFCDs issued on 30th June 1995 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book profit as per section 115JB (2C) of the Act. It is important to note that as discussed herein above, the capital liability and financial liability are two different concepts and Ld Pr. CIT has confused with the above two concepts and treated the capital liability as disclosed by the assessee as part of Composite Income in the schedule to the Other Equity. Thus, we hold that no adjustment is required in the book profit u/s 115 JB (2C) by way of 'transition amount' in the case of the assessee. Accordingly, the order of Ld. PCIT u/s 263 is reversed on merits and matter is decided in favour of the assessee. 199. Further, in ITO vs D.P. Communication system (ITA No. 5212/Del/2014) it has been held that "When the notional gain on fluctuation in foreign exchange is not disputed by the revenue, the same is not an income taxable u/s 115JB of the Act. Moreover, when the notional income does not really form part of income in the hands of the assessee company, the same cannot be part of the profit reflecting the real results in the profit & loss account." 200. Relying on the above decisions, we hold that notional income amounting to Rs. 83,35,74,971/- on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and income chargeable to tax under Profits & Gains of Business & Profession for the first time. We have noted that amendment to Section 115JB have been brought vide Finance Act 2017 bringing retrospective amendment to Sec 115JB w.e.f. 1-42016. Due to such retrospective effect, notional income accounted for the first time on adoption of Ind-AS became taxable u/s 115JB of the Act. It is a settled principle that law does not compel the assessee to perform what is impossible to perform in advance. Here, the assessee cannot be expected to estimate its total income considering retrospective amendment when at the time of payment of advance tax, no amendment was proposed by the legislature. Performance of this impossible duty must be excused in accordance with the maxim, 'lex non cogitate ad impossible' as held by Hon'ble Supreme Court in Cochin State Power and light vs State of Kerela (1965 AIR 1688). Based on the above finding of the apex court read with the facts of the case, the ld. AO is directed to delete interest levied u/s 234C of Rs. 1,38,85,263/-. This ground no. 9 is decided in favour of the assessee and is allowed. 206. Ground No. 10 (Additional Ground) relates to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing units of independent assessees in the State of Rajasthan and Chhattisgarh by applying Comparable Uncontrolled Price ('CUP') Method. These grounds have been extensively dealt with in Departmental Appeal for AY 2015-16 in ITA No. 489/JPR/2023 and followed in Departmental appeal for AY 2016-17 in ITA No. 490/JPR/2023 and in the light of our findings recorded therein, we find no infirmity in the order of the ld. CIT (A), accordingly the order of the ld. CIT (A) is upheld. The ground no 1 of the Revenue is dismissed. 213. Ground No. 2 relates to allowing the appeal of the assessee by deleting the disallowance of Rs. 3,18,12,93,748/- on account of deduction u/s 80IA on account of Solid Waste Management System. 214. Ground No. 2 in this appeal is same as Ground 2 of Departmental Appeal for AY 2015-16 on deduction u/s 80IA. The ld. AR of the assessee submitted that for AY 2017-18, the facts are similar to the facts for AY 2015-16. During the year, the assessee has claimed Deduction u/s 80IA towards profits on Solid Waste Management System set up for management of solid waste being pond ash & fly ash. The assessee has claimed the transfer price of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reight & handling charges payable for transportation of goods by road to the rail head, Bangur Gram (i.e. nearest railway station) and rail freight from rail head to the final destination, determined as per the tariff notified by the Indian Railways. Further, the assessee has also applied PSM on the revenue so derived and allocated 34.48% of the profits to its Cement Manufacturing Unit ('CMU') based on an effective Functional, Assets and Risk ('FAR') analysis. These grounds have been extensively dealt with in Departmental Appeal for AY 2015-16 in ITA No. 489/JPR/2023 and in the light of our findings recorded therein, we find no infirmity in the order of the ld. CIT (A), accordingly the order of the ld. CIT (A) is upheld. The ground no 4 of the Revenue is dismissed. 219. In the result, appeal of the Revenue is dismissed. For Assessment year 2018-19 220. The assessee filed its return of income for the year under consideration on 30.11.2018 disclosing total income of Rs. 3,97,76,01,600/- under the normal provisions of the Act and book profit amounting to Rs. 16,74,01,26,358/- under provisions of Sec. 115JB of the Act. Thereafter, the revised return of income for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,647/-) - Adhoc addition on purchases treating income u/s 69B (Rs. 41,21,53,647/-) 224. Feeling dissatisfied with the order of the assessment, the assessee preferred an appeal before the Commissioner of Income Tax, (Appeals-44), Delhi. The ld. CIT (A) based on the contentions raised and considering the evidence and judicial decisions cited partly allowed the appeal of the assessee. 225. Both assessee and revenue are not satisfied with findings of the ld. CIT(A), preferred the present appeal before this tribunal. The issues and finding being similar to that of the A. Y. 2015-16 the same is not repeated and the issue which is not there in the year earlier the same will be dealt when we take up that specific ground for adjudication. So, for the A. Y. 2018-19 we are taking up the appeal of the assessee first which is registered as ITA No. 498/JPR/2023 and then that of the revenue as ITA no. 492/JPR/2023. 226. First, we take up the appeal of the assessee in ITA No. 498/JPR/2023. 227. Ground No. 1& 2 relates to rejecting the impugned assessment order u/s 143(3) r.w.s. 144C passed by Ld. AO as invalid and void ab initio since it was time barred as passed beyond the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be allowed as per Form 10CCB. Ground no. 4 of appeal is therefore allowed. 233. Ground No. 5 relates to confirming the disallowance made by the AO on account of claim of Education Cess of Rs. 13,91,57,647/-. 234. Ground No. 5 in this appeal is same as Ground 3 of Assessee's appeal for AY 2015-16 on claim of Education Cess under normal provision of the Act, based on the finding recorded in A. Y. 2015-16 the ground no. 5 has no merits. Accordingly, the same is dismissed. 235. Ground No. 6 relates to deletion of erroneous addition made u/s 69B on account of unexplained investments amounting to Rs. 15,88,041/- 236. Briefly, the facts of the case are that AO during the course of assessment proceedings vide Notice u/s 142(1) dated 24.12.2020 asked the following details - "12. As per data available with the department, Assessee Company has made substantial purchases from multiple such suppliers who are either Non-Filer(s) or have filed non-business ITR or reflected a substantially lower turnover in ITR as compared to turnover shown in GSTR 1 return. Please furnish the below specified details:" 237. Thereafter, vide Show Cause Notice dated 22-09-2021, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king addition of Rs. 15,88,400/- only as against the amount of Rs. 515 Crs. which the ld. AO started to enquire from the assessee. However, the ld. CIT (A) noted that the ld. A.O. erred in adding the purchases by invoking the provisions of Sec. 69B and the same should have been disallowed from the purchases. 241. As the assessee is aggrieved from the orders of the lower authority preferred this appeal and specifically raised ground no. 6 in this appeal before us. 242. Before us, the ld. AR of the assessee submitted his written submission and the same is reiterated here in below:- A. Notice was issued by AO on 22-09-2021 proposing to disallow INR. 41.21 Crs. [@ 8% on INR 515.19 Crs] based on information available with the department w.r.t. purchases of INR. 515.19 Crs. made from suppliers who were non-filers of ITR. [Refer Pg 195 to 201 of PB]. Despite request of the appellant before AO vide its letter dated 2409-2021 [Refer Pg 202 to 206 of PB] to provide details of such suppliers, AO without providing such details passed draft assessment order u/s 144C dated 27-09-2021 proposing to disallow the said amount of Rs 41.21 Crs [Refer Pg 207 to 209 of PB]. The appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refully heard and perused written submissions and paper book filed by the assessee. It is seen that the ld. A.O. has made the addition of Rs. 15,88,040/- merely on the premises that the same is not reconciling with the details available in the insight portal. The ld. A.O. has neither provided further details of transactions of Rs. 15,88,040/- nor has verified whether the said transaction pertains to the assessee. The assessee has duly furnished the details of the transactions entered with the said suppliers during the year under consideration and has stated that no other transactions for purchase of goods has been undertaken with the said suppliers. The ld. AO has not provided any document in support of the information given in the insight portal. Thus, the bench noted that such type of addition to income cannot be made by the ld. AO merely by relying on the information in the insight portal and also without providing documents based upon which information was culled out from the insight portal. As it is held by the various courts that the ld. Assessing officer holding co judicial power. His role is multifaceted and is not the only adjudicator but he serves as investigato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n squarely applies to ground no. 7 raised by the assessee and for the sake of avoiding repetition we have not repeated the same. Based on that finding the ground no. 7 raised by the assessee stands dismissed. 249. Ground No. 8 relates to exclusion of deduction under section 80IA and 80-IC in computing Book Profit under section 115JB of the Act. 250. Ground No. 8 in this appeal is same as Ground 4 for Assessee's Appeal in AY 2015-16 on claim of deduction under section 80IA and 80-IC in computing Book Profit under section 115JB of the Act. This ground has been extensively dealt with in Assessee's Appeal for AY 2015-16 in ITA No. 500/JPR/2023 and in the light of our findings recorded therein, AO is directed to compute Book Profit u/s 115JB of the Act after allowing deduction under Chapter VI-A, Part C, particularly u/s 80IA & u/s 80IC of the Act. Ground no. 8 of appeal is therefore allowed. 251. Ground No. 9 relates to exclusion of notional income while computing Book Profit u/s 115JB of the Act. 252. Ground No. 9 pertains to non-adjustment of 1/5th of transition amount on first time adoption of IND-AS while computing Book Profits u/s 115JB. The said i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omparable Uncontrolled Price ('CUP') Method. These grounds have been extensively dealt with in Departmental Appeal for AY 2015-16 in ITA No. 489/JPR/2023 and followed in departmental appeal for AY 2016-17 and AY 2017-18 in ITA No. 490/JPR/2023 and 491/JPR/2023 respectively and in the light of our findings recorded therein, we find no infirmity in the order of the ld. CIT (A), accordingly the order of the ld. CIT (A) is upheld. The ground no. 1 of the Revenue is dismissed. 260. Ground No. 2 relates to allowing the appeal of the assessee by deleting the disallowance of Rs. 5,38,59,30,559/- on account of deduction u/s 80IA on account of Solid Waste Management System. 261. Ground No. 2 in this appeal is same as Ground 2 of Departmental Appeal for AY 2015-16 on deduction u/s 80IA. The ld. A/R submitted that for AY 2018-19, the facts are similar to the facts for AY 2015-16. In this year also, the assessee has claimed Deduction u/s 80IA towards profits on Solid Waste Management System set up for management of solid waste being pond ash & fly ash. The assessee has claimed the transfer price of treated solid waste by considering realisable market value of clinke ..... X X X X Extracts X X X X X X X X Extracts X X X X
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