DCM SHRIRAM LIMITED,DELHI vs. ASSESSMENT UNIT, DELHI

ITA 4328/DEL/2024Status: DisposedITAT Delhi30 June 2025AY 2020-21125 pages
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What did the Tribunal hold?

The Tribunal decided the appeals by addressing common issues. For the transfer of power (Ground 1 in Revenue's appeal for AY 2015-16 and Ground 6 in Assessee's appeal for AY 2020-21), the Tribunal followed its own order in ITA No.927/Del/2022 for AY 2015-16, which in turn relied on the Hon'ble Jurisdictional High Court's judgment in ITA No.566/Del/2023. This judgment upheld the Tribunal's order for AY 2014-15, thereby allowing the deletion of the adjustment made by the TPO. The reasoning was based on consistency and the High Court's affirmation of the Tribunal's view. For the transfer of steam (Ground 2 in Revenue's appeal for AY 2015-16 and Ground 7 in Assessee's appeal for AY 2020-21), the Tribunal set aside the issue to the file of the AO for making necessary verification of the assessee's claim for enhanced deduction under Section 80IA, allowing it in accordance with law. This implies a partial allowance pending verification. Regarding the Section 14A disallowance (Additional Ground 1 & 2 in Revenue's appeal for AY 2015-16), the judgment does not explicitly state the Tribunal's finding on this issue, as the focus shifts to the power and steam transfer issues. However, the earlier part of the judgment indicates the Ld. CIT(A) had deleted this addition, and the Revenue raised it as an additional ground. Without a specific finding recorded on this point in the provided excerpt, it remains undecided or not elaborated upon in this portion of the judgment.

What were the facts?

The appeals concern various assessment years (AYs) from 2015-16 to 2020-21, involving the assessee, DCM Shriram Ltd., and the Revenue. The primary dispute in ITA No.927/Del/2022 (AY 2015-16) revolves around the deletion by the Ld. CIT(A) of adjustments made by the TPO concerning the transfer of power and steam between the assessee's eligible and non-eligible units, and a disallowance under Section 14A. The TPO had proposed adjustments to the deduction claimed under Section 80IA for power transfer and steam transfer, totaling INR 1,06,23,19,163. The AO also made a disallowance of INR 1.52 crores under Section 14A. The Ld. CIT(A) deleted these adjustments and disallowances. In ITA No.4328/Del/2024 (AY 2020-21), the assessee's appeal challenges the final assessment order. Ground 6 concerns adjustments reducing Section 80IA deduction for power transfer, and Ground 7 relates to additional/revised claims for Section 80IA deduction on steam transfer.

What were the issues?

1. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the adjustment proposed by the TPO on account of the transfer of power generated in Rajasthan from an eligible unit to a non-eligible unit, when internal CUP data was not available (Section 80IA, Section 92CA). 2. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the adjustment proposed by the TPO on account of the transfer of steam from eligible units to non-eligible manufacturing plants (Section 80IA, Section 92CA). 3. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the addition made by the AO to the tune of Rs. 1,52,00,000/- as per the provisions of Section 14A of the Income Tax Act, 1961, and consequently, in the MAT income (Section 14A, Section 115JB). Assessee's Contentions (primarily for AY 2015-16 and AY 2020-21): The assessee argued that the transfer of power and steam between its units was at Arm's Length Price (ALP). For power transfer, it relied on Internal CUP by comparing prices with the State Electricity Board. The Ld. CIT(A) deleted the TPO's adjustment for power transfer by following a rule of consistency, noting no such adjustment was made in prior or subsequent years. For steam transfer, the Ld. CIT(A) deleted the adjustment. For AY 2020-21, the assessee sought additional/revised deduction under Section 80IA for steam transfer, which was dismissed by the TPO and DRP. The assessee also argued that the Section 14A disallowance was wrongly deleted by the Ld. CIT(A). Revenue's Contentions (primarily for AY 2015-16): The Revenue contended that the Ld. CIT(A) erred in deleting the adjustment on the transfer of power in Rajasthan, especially when internal CUP data was not available. It also argued that the Ld. CIT(A) erred in deleting the adjustment proposed by the TPO on account of the transfer of steam. Furthermore, the Revenue argued that the Ld. CIT(A) erred in deleting the addition made by the AO under Section 14A and consequently in the MAT income.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 92CA,Section 14A,Section 115JB

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Cases cited in this judgment(21)Show list

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Heard together (5 matters)

ITA No.927/Del/2022
ITA No.704/Del/2021
ITA No.2587/Del/2022
ITA No.4328/Del/2024
ITA No.1495/Del/2024

Read from the judgment's own cause title. This page is filed under one of them.

ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “I” BENCH: NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER [Assessment Year : 2015-16] DCIT, Circle-7(1), Room No.404, C.R. Building, New Delhi-110002. vs DCM Shriram Ltd., 5th Floor, Kanchenjunga Building, 18-Barakhamba Road, Connaught Place, New Delhi-110001. PAN-AAACD0079R APPELLANT RESPONDENT [Assessment Year : 2016-17] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs Additional/Joint/ Deputy/Assistant CIT/ITO, NeAC, Delhi APPELLANT RESPONDENT [Assessment Year : 2018-19] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs ACIT, Circle-7(1), Delhi APPELLANT RESPONDENT [Assessment Year : 2020-21] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs Assessment Unit, Income tax Department, Delhi APPELLANT RESPONDENT [Assessment Year : 2020-21] DCM Shriram Ltd.,

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