DCM SHRIRAM LIMITED,NEW DELHI vs. THE DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI

ITTPA 35/DEL/2025Status: DisposedITAT Delhi03 July 2026AY 2022-2344 pages
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What were the facts?

The assessee, DCM Shriram Limited, filed an appeal against the final assessment order dated 31.10.2025 for Assessment Year 2022-23, passed by the Assessing Officer (AO) pursuant to directions from the Dispute Resolution Panel (DRP). The assessee is engaged in diverse businesses including manufacturing and trading. The return of income declared Rs.10,86,46,23,950/- after claiming deduction under section 80IA. The case was referred to the TPO for determining Arm's Length Price (ALP) for international and specified domestic transactions. The DRP's directions led to transfer pricing adjustments and corporate additions in the final assessment order. The assessee's grounds of appeal challenge additions related to the transfer of electricity and steam from eligible to non-eligible units, sale of hybrid seeds, and inaccuracies in the computation of income and tax.

What did the Tribunal hold?

The Tribunal directed the Assessing Officer (AO) to verify the assessee's claim that the sale consideration of a building was reduced from the block of assets as per Section 50 of the Act. If found correct, no addition would be required, and the existing addition would be deleted. This issue was allowed for statistical purposes. Regarding inaccuracies in the computation of income and tax, the Tribunal directed the AO to verify the facts and rectify the mistakes apparent from the record, granting the assessee's claims in accordance with the law. This included issues concerning the incorrect tax rate applied, MAT credit, TCS credit, and an unreversed demand. These grounds were also allowed for statistical purposes. Grounds related to interest under sections 234B and 234C were considered consequential and not adjudicated. Penalty proceedings under section 270A were dismissed as premature. General grounds were also dismissed. The appeal was allowed as indicated.

What were the issues?

1. Whether the addition of Rs.131,28,53,044/- on account of the specified domestic transaction of transfer of electricity from eligible power units to non-eligible units is valid, considering the assessee's reliance on actual purchase price from State Electricity Board (SEB) and prior judicial precedents, versus the TPO's adoption of Indian Energy Exchange (IEX) rates with a mark-up. (Section 92CA) 2. Whether the addition of Rs.3,63,25,84,952/- for the transfer of steam from eligible to non-eligible units, by treating its ALP at NIL, is justified, given the assessee's contention that steam is a commercially valuable product and prior judicial approvals for its methodology. (Section 92CA) 3. Whether the addition of Rs.6,39,24,000/- on account of the international transaction of sale of hybrid seeds to associated enterprises is valid, considering the rejection of the assessee's Cost-Plus Method (CPM) and application of the Transactional Net Margin Method (TNMM). (Section 92CA) 4. Whether the addition of Rs.50,09,58,41,99/- on account of TPO's order and Rs.9,11,36,320/- on account of corporate tax issues are legally tenable. (Section 143(3) r.w.s. 144C(13)) Assessee's Contentions: - For electricity transfer, the assessee argued that the SEB rate should be the comparable, not IEX rates with a mark-up, and that prior judgments of the Delhi High Court and ITAT in its own case for earlier assessment years, approving the same methodology, should be followed. It also argued that the TPO failed to consider the landed cost from IEX. (Sections 92CA, 143(3)) - For steam transfer, the assessee contended that treating ALP at NIL is erroneous and contrary to binding precedents from the Delhi High Court and ITAT in its own cases. It argued that the TPO exceeded jurisdiction by questioning business expediency. (Sections 92CA, 143(3)) - For hybrid seeds sale, the assessee argued that CPM was rejected without cogent reasons and TNMM was wrongly applied. (Section 92CA) - The assessee also raised issues regarding incorrect tax rate application on an addition, incorrect MAT credit, short grant of TCS credit, and an unreversed demand adjusted against a future refund. (Sections 143(3), 115JAA) Revenue's Contentions: - The Revenue did not controvert the assessee's submission regarding the sale of building and its adjustment under Section 50 of the Act. (Section 50) - The Revenue agreed to the remission of issues related to computation of income and tax for verification by the AO. (Sections 143(3), 115JAA)

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 92CA,Section 133(6),Section 50,Section 115JAA,Section 234B,Section 234C,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’:NEW DELHI

Before: SHRI S. RIFAUR RAHMAN & SHRI VIMAL KUMAR

For Appellant: Shri Pradeep Dinodia, CA, Shri Ravi Kumar, CA, Ms. Shruti Gupta, CA, Shri Badal Singh, CA
For Respondent: Shri S.K. Jadhav, CIT DR
Hearing: 26.05.2026

PER S. RIFAUR RAHMAN, AM :

1.

The assessee has filed appeal against the final assessment order passed by the Assessing Officer (AO) [Income Tax Officer, ACIT TP 1(2)(1), Delhi] dated 31.10.2025 for Assessment Year 2022-23 under section 143(3) read with section 144C(13)/144B of the Income-tax Act, 1961 (for short ‘the Act”) for Assessment Year 2022-23 pursuant to the directions

2 IT(TP)A No.35/Del/2025 of the Dispute Resolution Panel u/s 144C(5) of the Act.

2.

Brief facts of the case are, the assessee is a public limited company engaged in the business of manufacturing and trading of chemical, PVC Resins, PVC compounds

The order continues below.

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