THE PRINCIPAL COMMISSIONER OF INCOME-TAX, VADODARA-1 vs. GUJARAT ALKALIES AND CHMICALS LTD.

By this appeal under section 260A of the Income Tax Act, 1961, the appellant – revenue has challenged the order dated 25.02.2019 passed by the Income Tax Appellate Tribunal, ‘D’ Bench, Ahmedabad (hereinafter referred to as “the Tribunal”) in ITA No. 688/Ahd/2015 by proposing the following two questions, stated to be substantial questions of law: “(a) Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal has erred in law and on facts in allowing the assessee's claim of deduction under section 80IA(4) of the Income Tax Act, 1961 when the assessee had adopted rate on which the Gujarat Urja Vikas Nigam Ltd. (GUVNL) supplied power to its consumers ignoring the rate on which power generating company supplied its power to GUVNL? (b) Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal has C/TAXAP/725/2019 ORDER erred in law and on facts in restricting the disallowance made under section 14A of the Act on ad-hoc basis at the rate one percent of the exempted income without appreciating that the assessee was maintaining mixed funds and failed to establish that it has utilized its own surplus funds for investment yielding tax exempt income which was contrary to the ratio in the case of Maxopp Investment Ltd. & Others v. CIT (SC) (in CA Nos. 104-109 of 2015 dated 12/02/2018)?”

The assessment year is 2011-12 and the corresponding accounting period is the previous year 2010-11. 3. Heard, Mr. Varun Patel, learned Senior Standing Counsel for the appellant and Mr. Manish Shah, learned advocate for the respondent.

Insofar as proposed question (a), which relates to the assessee's claim of deduction under section 80IA(4) of the Act, is concerned, it is an admitted position that the controversy involved in the present case stands concluded in favour of the assessee and against the revenue by a judgment and order dated 03.10.2016 passed by this High Court in the case of Principal Commissioner of Income-Tax, Vadodara-1 v. Gujarat Alkalies and Chemicals Ltd. in Tax Appeal No.708 of 2016. Under the circumstances, for the reasons recorded in the above judgment, no question of law can be stated to arise insofar as this ground of appeal is concerned.

As regards proposed question (b), which relates to restriction of disallowance made under section 14A of the Act on ad-hoc basis at the rate one percent of the exempted income, the said controversy also stands concluded in favour of the assessee and against the revenue by the decision of this C/TAXAP/725/2019 ORDER court in the case of Principal Commissioner of Income-Tax v. Gujarat State Fertilizers and Chemicals Ltd. [2019] 416 ITR 13 (Guj). Under the circumstances, for the reasons recorded in the above decision of this court, this ground of appeal also does not merit acceptance.

In the light of the above discussion, it is not possible to state that the impugned order passed by the Tribunal gives rise to any question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is accordingly, dismissed. [Harsha Devani, J.] [Sangeeta K. Vishen, J.] hiren