DCIT CORPORATE CIRCLE 2(1), CHENNAI vs. THE INDIA CEMENTS LTD., CHENNAI

In reply, the learned Departmental Representative vehemently supported the order of the Assessing Officer. It was a submission that the assessee is maintaining two standards, one charging interest on the sum of the loans to its subsidiaries and in respect of the other, no interest is being charged. It was a submission that consistency is to be maintained and the notional interest in respect of the non-interest bearing advance as given is liable to be levied.

As it is noticed that the issue of the notional interest on the annuity advance to subsidiaries is now squarely covered by the decision of the Co- ordinate Bench of this Tribunal in the assessee’s own case for various Assessment Years and as it is noticed that the learned CIT(A) has followed judicial discipline in following the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for the earlier Assessment Years referred to supra, as also on the ground that the Revenue has not been able to dislodge the findings on the learned CIT(A), we find no reason to interfere in the order of the learned CIT(A) on this issue. Consequently, this issue is held in favour of the assessee and against the Revenue.

Issue-2: Disallowance u/s.14A r.w.Rule 8D(2)(iii) of the Act: It was submitted by the learned Authorized Representative that in the course of the assessment, the Assessing Officer had made the disallowance u/s.14A

In reply, the learned Departmental Representative vehemently supported the order of the Assessing Officer.

We have considered the rival submission and perused the materials available on record. , 2413, 2414, 2415 & 2416/Chny/2019 :- 6 -: 10. In the circumstances, as it is noticed that the issue is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case referred to supra, and the Revenue has not been able to dislodge the findings of the learned CIT(A), we find no reason to interfere in the order of the learned CIT(A) on this issue. Consequently, this issue is held in favour of the assessee and against the Revenue.

Issue-3: Depreciation of Franchise rights: It was submitted by the learned Authorized Representative that the assessee company was the owner of the Chennai Franchise of BCCI IPL by name of ‘IPL-Chennai Super Kings’. It was a submission that the assessee had been awarded the franchise rights of Chennai Super Kings for a period of ten years for an amount of Rs.364.00 Crores. In the second half of the Assessment Year 2008-09, the assessee had to pay an amount of Rs.36.4 Crores per annum. The assessee was claiming depreciation on the said amount. The same was disallowed by the Assessing Officer on the ground that, in the case of the assessee, the franchise has been suspended and the assessee had not been taking part in the tournament. It was a submission that the issue was now squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case in dated 01.01.2016, wherein in para-25 & 26 it has been held as follows: “25. We have considered the rival submission on either side and also perused the material available on record. Admittedly, the assessee is a successful bidder for franchise rights of Chennai Superking. The cost of the franchise rights if Rs.364 crores which has to be paid in 10 years @ 36.4 crores per annum. The assessee is entitled for depreciation on the franchise right being an intangible asset under Explanation (3) to Sec.32(1) of the Act. This is not in dispute. The only dispute is , 2413, 2414, 2415 & 2416/Chny/2019 :- 7 -: whether the assessee is entitled for depreciation on the cost of the franchise rights or on the amount paid during the year under consideration. We have through the provisions of Sec.32 of the Act. Sec.32(1) clearly says that in case of an asset used for generation or generation and distribution of power, depreciation has to be allowed on the actual cost of the asset at the rate prescribed. In case of block of assets, depreciation has to be allowed on the written down value at the rate prescribed. In this case, the prescribed rate for franchise rights is 25%. It is not in dispute that the assessee acquired the franchise rights during the year under consideration. The cost of block of assets was increased to the extent of Rs.364 crores. Since the cost of the franchise rights is admittedly Rs.364 crores, as per the terms and conditions of the bid, the assessee has to pay Rs.364 crores in 10 years’ period. The assessee has to pay Rs.36.4 crores every year. However, the cost of block of assets was increased to the extent of Rs.364 crores. It is not a case of subsidy or discount in the cost which was given to the assessee. In such a case, the cost of franchise rights would be reduced to the extent of subsidy or discount, if any, given to the assessee. It is admitted case of both parties that the cost of Rs.36.4 crores was to be paid in 10 equal installments. Therefore, the cost of asset is Rs.364 crores and not Rs.36.4 crores. When the cost of block of assets was increased to the extent of Rs.364 crores, the Tribunal is of the considered opinion that depreciation has to be allowed on the cost of block of assets increased. Therefore, the Assessing Officer is not justified in restricting the depreciation at Rs.36.4 crores which was said to be paid during the year under consideration. This Tribunal is of the considered opinion that the entire cost of the franchise rights has to be taken into consideration for computation of depreciation. The assessee also filed appeal against the order of the CIT(A), restricting the depreciation on the amount actually paid by the assessee during the year under consideration. While adjudicating the assessee’s appeal at para-34 hereinunder this Tribunal found that the assessee is entitled for depreciation on the cost of Rs.364 crores. Accordingly, the order of the CIT(A) is modified and the Assessing Officer is directed to allow depreciation on the entire cost of Rs.364 crores. 26 In the result, the appeal of the Revenue in I.T.A.604/Mds/2012 is dismissed.”

In reply, the learned Departmental Representative submitted that the Chennai SuperKings was suspended and consequently for the relevant year’s the depreciation was not allowable. It was also a submission that the depreciation has been wrongly allowed.

We have considered the rival submission and perused the materials available on record.

A perusal of the order of the Co-ordinate Bench of this Tribunal referred to supra in para-25 & 26 clearly shows that the Tribunal considered these issues and has held the issue in favour of the assessee. Further, for the , 2413, 2414, 2415 & 2416/Chny/2019 :- 8 -: earlier years, the depreciation having already been allowed, now it would not be open to disallow such depreciation as the same would affect the W.D.V also. Further, the perusal of the assessment order for the assessment year 2014-15, in para-8.1 to 8.6 shows that the assessee has claimed only 18.89 crores as depreciation and the Assessing Officer has given an enhanced depreciation of an additional amount of Rs.12.92 lakhs resulting a depreciation of Rs.31.81 crores. Similarly, for the assessment year 2015-16, the assessee had claimed 14.17 lakhs, whereas the Assessing Officer has granted Rs.32.05 crores. Thus, the Assessing Officer has in fact granted the assessee higher depreciation than what has been claimed by the assessee. A perusal of the order of the learned CIT(A) shows that the learned CIT(A) has followed judicial discipline in following the decision of the Co-ordinate Bench of this Tribunal referred to supra, wherein it has been held that the Assessing Officer is directed to allow depreciation on the entire cost of Rs.364 crores. In the circumstances, as it is noticed that the issue is squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case referred to supra and as it is noticed that the learned CIT(A) has followed judicial discipline in following the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case, the findings of the learned CIT(A) stands confirmed. In the result, the issue is decided against the Revenue and in favour of the assessee.

Issue-4: Sales Tax subsidy as capital receipts: It was submitted by the learned Authorized Representative that in the course of assessment, the ITA Nos. 2412, 2413, 2414, 2415 & 2416/Chny/2019 :- 9 -: Assessing Officer had treated the subsidy received by the assessee from the State Government of Maharastra and Telengana in the form of Sales Tax incentives which had been claimed by the assessee as capital receipts as being the income of the assessee. It was a submission by the learned Authorized Representative that the issue was squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case in 1340, 1341 & 1342/Mds/2010 dated 12.05.2017, wherein in para-7 & 7.1 under similar circumstances, the subsidy received by the assessee is from the Japanese Government which was used by the assessee for importing waste heat recovery plant has been held in favour of the assessee which is extracted as under:

In reply, the learned Departmental Representative vehemently supported the order of the learned Assessing Officer.

We have considered the rival submission and perused the materials available on record.

A perusal of the order of the learned CIT(A) clearly shows that the learned CIT(A) has categorically considered the fact that if the object of the subsidy is to enable the assessee to run a business more profitably, then the , 2413, 2414, 2415 & 2416/Chny/2019 :- 11 -: receipt is on revenue account. On the other hand, if the object of the assistance under the subsidy is to enable the assessee to set up a new unit or to expand its existing unit, then the receipt of the subsidy was on capital account. The learned CIT(A) has also considered the principles laid down by the Hon’ble Supreme Court in the case of Commissioner of Income-Tax vs. Ponni Sugars and Chemicals Limited [2008] 306 ITR 392 (SC). In the present case, the learned CIT(A) has also recognized the fact that the subsidy was granted to the assessee as incentive to invest in backward areas and consequently the said subsidy granted by the Government in fact was capital receipt. It is also noticed that the learned CIT(A) has recognized with the fact that the Cement Manufacturing Plant at Parli, Beed District in the state of Maharashtra comes under the Industrial Promotion Policy of the Government of Maharashtra and the ‘Package Scheme of Incentives 2007’ invited by the Directorate of Industries, Government of Maharashtra and consequently the assessee has made a fixed capital investment of nearly 152 crores as on 31.03.2011. It is after recognizing this that the learned CIT(A) has granted the assessee the benefit of treating the said subsidy as a capital receipt by following the principles laid down by the Hon’ble Supreme Court in the case of Commissioner of Income-Tax vs. Ponni Sugars and Chemicals Limited, referred to supra. This being so and also considering the fact that the Revenue has not been able to dislodge the findings of the fact as arrived by the learned CIT(A) on this issue, we find no reason to interfere in the order of the learned CIT(A) , 2413, 2414, 2415 & 2416/Chny/2019 :- 12 -: on this issue. Consequently, the issue is held in favour of the assessee and against the Revenue.

Issue-5: Foreign currency monetary item transaction: It was submitted by the learned Authorized Representative that in the course of assessment, the Assessing Officer noticed that the assessee had added back an amount under the head “Amortization to defer revenue expenditure – forex loss” and an amount under the head “Additions to Foreign Currency- Monetary Item Transaction” difference account had been reduced. On being questioned, the assessee has stated that the loan was obtained for the general purpose and that the differential reduced was the forex transaction loss incurred during the year. It was submitted that as per the notification to MCA dated 29.12.2011, forex loss relating to loans taken for the purpose of acquiring fixed assets were admittedly to be added to the cost of fixed asset and depreciated, whereas the forex loss on account of loan taken for general purpose was to be accumulated in the foreign currency monetary item transaction difference account and amortization over the balance period of the loan. It was submitted that the assessee was eligible to claim the entire loss incurred towards the forex fluctuations as the loss had been taken for the general purpose but had instead to a conservative measure claimed the forex loss as amortized. It was a submission that the learned Assessing Officer in the course of assessment held that the capital MCA circulars are not binding on the revenue and consequently the Assessing Officer treated the amortized amount as capital expenditure. It was a submission that on appeal, the learned CIT(A) following , 2413, 2414, 2415 & 2416/Chny/2019 :- 13 -: the decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax vs. Woodward Governor India (P) Limited reported in [2009] 312 ITR 0254 directed the Assessing Officer to allow the assessee’s claim on forex loss in respect of the foreign currency monetary item transaction.

In reply, the learned Departmental Representative vehemently supported the order of the learned Assessing Officer.

It was a submission that the assessee itself had claimed the said amount as a deferred revenue expenditure which was amortized. It was a submission that consequently the same was not allowable as the revenue expenditure.

We have considered the rival submission and perused the materials available on record.

A perusal of the fact in the present case clearly shows that the assessee has in the computation statement for income tax purpose added back the amortized deferred revenue expenditure forex losses, nor it is undisputed that the loan was taken for the general purpose. The net of the transactions between amortization of the deferred revenue expenditure and the addition to the foreign currency monetary item transaction difference account is the actual forex loss, more so the net loss that the assessee is entitled to. It is to this net loss that the assessee has applied the MCA Circular dated 29.12.2011 and the same was accumulated in the foreign currency monetary item transaction , 2413, 2414, 2415 & 2416/Chny/2019 :- 14 -: difference account and amortized over the balance period of loss. The amortization has been done by applying the notification issued by the MCA Circular dated 29.11.2011 but in the Memorandum of total income the amortized sum was added back and the entire expenses claimed. Thus, it is not the issue as to the assessee having amortized the deferred revenue expenditure but this is in fact a forex loss incurred by the assessee on account of a loan taken for the general purpose. This is admittedly to be allowed on the revenue filed in line to the decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax vs. Woodward Governor India (P) Limited referred to supra. It must also be mentioned here that the Assessing Officer in the assessment order has not disturbed the claim of the assessee on the ground that the loss was capital. The Assessing Officer is disallowing the claim only on the ground that the MCA Circular are not binding on the department. As no error in the accounts of the assessee nor has any facts has been brought out to show that the forex loan taken by the assessee was for the capital asset.

This being so, as also on the fact that the revenue has not been able to dislodge the findings of the facts as arrived by the learned CIT(A) in his order, we find no reason to interfere in the order of the learned CIT(A) and the same stands upheld. In the result, the issue is held in favour of the assessee and against the Revenue.

Issue-6: Depreciation of UPS restricted to 60% : It was submitted by the learned Authorized Representative that in the course of assessment, the ITA Nos. 2412, 2413, 2414, 2415 & 2416/Chny/2019 :- 15 -: assessee had claimed depreciation on UPS at 60% and the Assessing Officer had treated the same as ‘Plant & Machinery’ and consequently had granted the assessee depreciation at lower rates. It was a submission on appeal that the learned CIT(A) had followed the decision of the Co-ordinate Bench of this Tribunal in the case of Indian Overseas Bank vs. Additional Commissioner of Income Tax reported in dated 19.03.2013, wherein following the decision of the Hon’ble Delhi High Court in the case of M/s. Orient Ceramics and Industries Limited had held that the UPS forms part of the computer system and therefore was entitled for depreciation at 60% being the rate of depreciation for computers. The learned Authorized Representative vehemently supported the order of the learned CIT(A).

In reply, the learned Departmental Representative supported the order of the Assessing Officer.

We have considered the rival submission and perused the materials available on record. 28. The issue as to whether the UPS is liable to be considered as part of the computer system and therefore entitled for rate of 60% being the rate eligible for computers admittedly is squarely covered by the decision of the Co- ordinate Bench of this Tribunal in the case of Indian Overseas Bank Limited referred to supra as also the decision of the Special Bench of this Tribunal in the case of Datacraft India Limited, Mumbai [2011] 9 ITR (T) 712 (Mum) (SB). , 2413, 2414, 2415 & 2416/Chny/2019 :- 16 -: As it is noticed that the learned CIT(A) has followed the judicial discipline in following the decision of the Co-ordinate Bench of this Tribunal as also the decision of the Hon’ble Delhi High Court in the case of Orient Ceramics and Industries Limited, we find no reason to interfere in the order of the learned CIT(A). Consequently, the issue is held in favour of the assessee and against the Revenue.

Issue-7: Deduction u/s.80IA: In respect of the adjustment of the rate in respect of the electricity consumed under the captive consumption. It was submitted by the learned Authorized Representative that in the course of assessment, the Assessing Officer had reworked the deduction u/s.80IA. It was a submission that the assessee owned a wind mill at Kayathar and Waste Heat Recovery Plant at Vishnupuram. When computing the eligible deduction u/s.80IA, the assessee had adopted the free market rate per unit of electricity for arriving at the profits of the undertakings. It was a submission that the Assessing Officer had adopted the rates prescribed by the TNERC and APERC respectively in respect of the prices at which they purchased power and consequently reduced the allowable deduction u/s.80IA of the Act. It was a submission that on appeal the learned CIT(A) had followed the decision of the Co-ordinate Bench of this Tribunal in the case of Sri Velayudhaswamy Spinning Mills Vs Deputy Commissioner of Income Tax reported in [2012] 19 Taxman.com 28 (Chen) as also the decision of Eveready Spinning Mills vs. Assistant Commissioner of Income Tax reported in 17 Taxman.com 254

In reply, the learned Departmental Representative submitted that the deduction u/s.80IA is on the income and not on the profits. The profits would come when there is transaction between the two different entities. The assessee cannot make a profit by transacting with oneself and therefore when captive consumption of power generated by the assessee is considered, the rate at which the SEBs purchase power have to be considered as against the open market price. It was further a submission that when the assessee does , 2413, 2414, 2415 & 2416/Chny/2019 :- 18 -: captive consumption of the power generated by its own wind mill and Waste Heat Treatment Plant, the assessee has already made savings in so far as the claim of deduction u/s.80IA is made. It was a submission that the order of the learned Assessing Officer was liable to be restored.

We have considered the rival submission and perused the materials available on record.

A perusal of the facts in the present case clearly shows that the assessee has been captively consuming the electricity generated from its wind mill as also the Heat Waste Recovery Treatment Plant. Admittedly, the assessee is entitled to the deduction u/s.80IA of the Act in respect of the electricity generated and consumed. This is not in dispute. The dispute has risen for computing the deduction u/s.80IA of the Act. The issue admittedly is covered by the decision of the Co-ordinate Bench of this Tribunal in the case of Sri Velayudhaswamy Spinning Mills Vs Deputy Commissioner of Income Tax referred to supra and as also the decision in the case of Eveready Spinning Mills vs. Assistant Commissioner of Income Tax referred to supra. A similar view has also been taken in the case of M/s. Saranya Textiles vs. The Assistant Commissioner of Income Tax, wherein one of us is a party. This view of ours is also supported by the decision of the Hon’ble Gujarat High Court in the case of Commissioner of Income Tax vs. Gujarat Alkalies Chemicals Limited reported in 395 ITR 247(Guj.), wherein it has been held that the deduction u/s.80IA was allowable to the for generation of power for captive

Issue-8: Disallowance u/s.14A r.w.rule 8D while comuting book profit u/s.115JB of the Act: It was submitted by the learned Authorized ITA Nos. 2412, 2413, 2414, 2415 & 2416/Chny/2019 :- 20 -: Representative that the learned Assessing Officer had in the course of assessment included a disallowance u/s.14A r.w.rule8D while computing the MAT u/s.115JB of the Act. It was a submission that in view of the decision of the Hon’ble Special Bench of this Tribunal in the case of Assistant Commissioner of Income Tax Vs. Vireet Investment Private Limited reported in 58 ITR (TRIB), Delhi Special Bench (SB) 313 (Delhi), the computation under Clause (f) of the Explanation-1 to Section 115JB (2) is to be made without reducing the computation as contemplated u/s.14A r.w.rule.8D of the Income Tax Act, 1962. It was also a submission that the Co-ordinate Bench of this Tribunal has in the assessee’s own case in referred to supra in para-70 & 71 is as follows: “70. The next issue for consideration is with regard to addition of expenditure attributable to earning exempt income while computing the book profit u/s.115JB of the Act.

Since the disallowance under rule 8D was confirmed at 0.5% of the average value of investment, income from which does not form part of total income, both for regular computation as well as computation u/s.115JB of the Act, the Assessing Officer has rightly made the addition. However, the orders of the lower authorities are modified and the Assessing Officer is directed to disallow 0.5% of the average value of investment, income from which does not form part of the total income.”

In reply, the learned Departmental Representative vehemently supported the order of the learned Assessing Officer.

We have considered the rival submission and perused the materials available on record. , 2413, 2414, 2415 & 2416/Chny/2019 :- 21 -:

A perusal of the order of the learned CIT(A) shows that he has followed the principles laid down by the Co-ordinate Bench of this Tribunal in the assessee’s own case and restricted the disallowance to 0.5% of the average investment to be considered for disallowance under both the regular provisions and also in computing the book profits u/s.115JB of the Income Tax Act, 1961. As it is noticed that the learned CIT(A) has followed the principles laid down by the Co-ordinate Bench of this Tribunal as also the principles enunciated by the Special Bench of this Tribunal in the case of Assistant Commissioner of Income Tax Vs. Vireet Investment Private Limited referred to supra, we find no error in the order of the learned CIT(A) which calls for any interference. In the result, the issue is held in favour of the assessee and against the Revenue.

Issue-9: Disallowance u/s.37 as business expenditure for the payment made to National Council for Cement & Building Materials: It was submitted by the learned Authorized Representative that the assessee had to contribute to the National Council for Cement and Building Materials [NCCBM] which was a Government of India organization. NCCBM carried out significant study in the areas of low-grade lime stone and other natural wastes in the cement manufacture to increase sustainability of natural resources. The contribution was worked out at the rate of 0.75 paise per tonne on the total production. The payments were made for augmenting the research activity by the said organization which benefits the cement industry including the assessee. , 2413, 2414, 2415 & 2416/Chny/2019 :- 22 -: It was a submission that the Assessing Officer had disallowed the same. It was a submission on appeal that the learned CIT(A) considered the fact that NCCBM is an Apex Body functioning under the Ministry of Commerce and Industries, Government of India and carries out significant status in the cement related fields, the learned CIT(A) has held that the contributions to such Government organization in general is a business expenditure because any developments from such studies can be used for the assessee’s business. Consequently, the learned CIT(A) directed that the expenditure was allowable u/s.37 of the Income Tax Act, 1961. The learned CIT(A) had followed the decision of the Hon’ble Supreme Court in the case of Venkata Satyanarayana Rice Mill Contractors vs. Commissioner of Income Tax [1997] reported in 89 Taxman.com 92 (SC) as also the principles laid down in the decision by the Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax vs. Chemicals and Plastics India Limited [2007] reported in 165 ITR 158 (Mad.), wherein it was held that, where the contribution was made by the assessee to the Chamber of Commerce whose activities are closely linked with the welfare of the corporate entities who are members therein and whose interests are taken care off by that Chamber, irrespective of whether the expenses incurred are compulsorily or otherwise, it could be said that the payment made by the assessee was for the purpose of business and satisfied the commercial expediency test. It was a submission that the payment have been made for the purpose of business of the assessee and the same was allowable. , 2413, 2414, 2415 & 2416/Chny/2019 :- 23 -: 38. In reply, the learned Departmental Representative vehemently supported the order of the learned Assessing Officer.

We have considered the rival submission and perused the materials available on record.

As it is noticed the payments have been made by the assessee to NCCBM which is an Apex body functioning under the Government of India and doing significant study and research in cement related field, obviously, the results from the said study would be in the interest of the assessee’s business. This being so, in view of the decision of the Hon’ble Supreme Court in the case of Venkata Satyanarayana Rice Mill Contractors vs. Commissioner of Income Tax [1997] referred to supra as also complying the principles laid down by the Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax vs. Chemicals and Plastics India Limited referred to supra, we are of the view that the expenditure is a business expenditure and allowable u/s.37 of the Income Tax Act, 1961.

This being so and also on account of the fact that the Revenue has not been able to dislodge the findings as arrived by the learned CIT(A) on this issue, we find no reason to interfere in the order of the CIT(A) on this issue. Consequently, the said issue is held in favour of the assessee and against the Revenue.

In I.T.A.No.2412/Chny/2019, in the Revenue’s appeal in Ground Nos.1.1 to 1.3 the Revenue has challenged the action of the learned CIT(A) in granting , 2413, 2414, 2415 & 2416/Chny/2019 :- 24 -: deduction u/s.80IA with regard to the adjustment of rate in respect of the electricity consumed for captive consumption. The issue has been discussed in paragraphs 29 to 32 above. The issue is held in favour of the assessee and against the Revenue. Consequently, the said grounds raised in the Revenue’s appeal stands dismissed. In the result, the appeal of the Revenue stands dismissed.

In I.T.A.No.2413/Chny/2019, in the Revenue’s appeal in Ground Ns.1.1 to 1.3, the Revenue has challenged the action of the learned CIT(A) in granting the deduction u/s.80IA with respect to the adjustment of the rate in respect of the electricity consumed for captive consumption. The issue has been decided in paragraphs 29 to 32 above in favour of the assessee. Consequently, Ground Nos.1.1 to 1.3 of the Revenue’s appeal stands dismissed. 43.1 In Ground Nos.2.1 and 2.2, the Revenue has challenged the action of the learned CIT(A) in deleting the disallowance of deduction u/s.37 in respect of the contribution to Governmental organizations. This is in respect of the business expenditure claimed by the assessee in respect of the payments made to the National Council for Cement and Building Materials. The issue has been adjudicated in paragraphs 37 to 41 in favour of the assessee and against the Revenue. Consequently, Ground Nos.2.1 and 2.2 in the Revenue’s appeal stands dismissed. 43.2 In respect of the Ground Nos.3.1 and 3.2, the Revenue has challenged the action of the learned CIT(A) in deleting the disallowance of the sales tax subsidy by treating the same as capital receipts. The issue has been , 2413, 2414, 2415 & 2416/Chny/2019 :- 25 -: adjudicated in paragraphs 15 to 18 above in favour of the assessee and against the Revenue. Consequently, Ground Nos.3.1 and 3.2 of the Revenue’s appeal stands dismissed. In the result, the appeal of the Revenue is dismissed.

In Revenue’s appeal in Ground Nos.1.1 to 1.3, the Revenue has challenged the action of the learned CIT(A) in deleting the addition made on recognizing notional interest on the annuity advances to the subsidiary companies. This issue has been adjudiciated by us in paragraphs 4 to 6 above in favour of the assessee and against the Revenue. Consequently, Ground Nos.1.1 to 1.3 of the Revenue’s appeal stands dismissed. 44.1 In Ground Nos.2.1 to 2.4, the Revenue has challenged the action of the learned CIT(A) in directing the Assessing Officer to restrict the disallowance of the expenses u/s.14A to 0.5% to the average value of the investment. The said issue has been adjudicated in paragraphs 7 to 10 above in favour of the assessee and against the Revenue. Consequently, Ground Nos.2.1 to 2.4 of the Revenue’s appeal stands dismissed.

In in the Revenue’s appeal in Ground Nos.1.1 to 1.3, the Revenue has challenged the action of the learned CIT(A) in deleting the addition made on recognizing notional interest on the annuity advances to the subsidiary companies. This issue has been adjudicated by us in paragraphs 4 to 6 above in favour of the assessee and against the Revenue. Consequently, Ground Nos.1.1 to 1.3 of the Revenue’s appeal stands dismissed.

In in the Revenue’s appeal in Ground Nos.1.1 to 1.3, the Revenue has challenged the action of the learned CIT(A) in deleting the addition made on recognizing notional interest on the annuity advances to the subsidiary companies. This issue has been adjudicated by us in paragraphs 4 to 6 above in favour of the assessee and against the Revenue. Consequently, Ground Nos.1.1 to 1.3 of the Revenue’s appeal stands dismissed. , 2413, 2414, 2415 & 2416/Chny/2019 :- 30 -: 46.1 In Ground Nos.2.1 to 2.4, the Revenue has challenged the action of the learned CIT(A) in directing the Assessing Officer to restrict the disallowance of the expenses u/s.14A to 0.5% to the average value of the investment. The said issue has been adjudicated in paragraphs 7 to 10 above in favour of the assessee and against the Revenue. Consequently, Ground Nos.2.1 to 2.4 of the Revenue’s appeal stands dismissed.

In the result, the appeals of the Revenue in 2413, 2414, 2415 & 2416/Chny/2019 are dismissed.