ASSISSTANT COMMISSIONER OF INCOME TAX, AJMER vs. SHREE CEMENT LTD, BEAWAR

Briefly, the facts of the case 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.

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 10CCB. However, the A.O completed the assessment without giving cognizance to the above petitions.

This issue was taken up before the ld. CIT(A) and the relevant finding of the ld.CIT(A) is reiterated here in below :

Ground No. 13 is in respect of error in computing deduction u/s 80- IA on Solid Waste Management System (Fly Ash). This is raised without prejudice to Ground No. 8 to 12. 11.1 The AR submitted that the A.O. in the assessment order was required to compute deduction u/s 801A in accordance with the provisions of Sec. 92CA(4). Instead of computing revised deduction u/s 80IA after taking into account order of TPO, AO added back the entire amount of adjustment to total income without taking into cognizance the amount of claim made in the computation. Hence, instead of allowing deduction u/s 80- IA of Rs. 203,39,79,752/- the AO has computed negative deduction of Rs. (63,88,96,572)/- [Rs. 101,85,41,499/- minus Rs. 1,65,74,38,071/-]. 11.2 Since the said issue has already been adjudicated in detail in Para 9 above and necessary directions have already been given to the A.O. in this regard, the said ground does not require further adjudication and hence is dismissed.

Since the ld. CIT(A) while dealing with the ground of appeal has referred the para 9 of his finding and therefore, the same is also reproduced herein below :

9. Ground No. 11 is against deduction u/s 801A on eligible Solid Waste Management System as per Form 10CCB filed along with return of income.

Thus, the ld. CIT(A) dismissed this ground merely on the ground that assessee has made the claim in the notes to the computation of income and the same is not in accordance with the provisions of Section 80A(5) and restricted the claim of the assessee up to the amount claimed vide computation of income.

Aggrieved by the order of CIT(A), the assessee preferred appeal before us in ground no. 3.

In support of the ground so raised the ld. AR of the assessee submitted his written submission as under :-

Per contra, the ld. DR representing the revenue has heavily relied upon the finding of the ld. CIT(A) on the issue. The ld. DR submitted that as the claim of the assessee is not in accordance with the provision of section 80A(5) the excess claim since not claimed in the return of income the claim of the assessee is required to be denied.

Since the ground of appeal was decided against the assessee relying upon the provision of section 80A(5) the same is considered and reiterated here in below :

We have carefully heard the rival contentions and perused written submissions filed by the assessee. We have also carefully gone through the order of ld. CIT(A). From the perusal of Paper Book filed by the assessee it could be seen that total deduction of Rs. 753.10 Crs. was claimed on account of deduction u/s 80IA on Solid waste management system (SWMS). In support of the above claim, the assessee had filed report in Form 10CCB along Accountant had certified the above claim. A dispute arose since out of the above claim, in the computation of total income the assessee claimed Rs. 485.81 Crs. and balance claim of Rs. 267.29 Crs. was made vide Notes forming part of the return filed along with the computation and forming integral part of the return.

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 Limited vs ACIT (ITA No. 6082/Mum/2014 dated 16-3-2023) has held that –

In CIT vs B.G. Shirke construction Technology (P) Ltd (2017)

Hon’ble Delhi Tribunal in ACIT vs SIL Investment Ltd. (2012)

We further find that Ld. CIT(A) has himself in the order dated 08-06-2023 confirmed that deduction u/s 80IA on SWMS of Rs. 748.76 Crs. should be allowed to the assessee. Therefore restricting the said claim merely because the claim in the computation part of return is lower is not justified as it is the duty of the appellate authorities to determine 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 allowed.

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/-.

Ground No. 4 in this appeal is same as Ground 3 of assessee’s appeal for AY 2015-16 in on claim of Education Cess under normal provision of the Act. This ground has been extensively dealt with while dealing with Assessee’s Appeal for AY 2015-16 in ITA No. 500/JPR/2023 and in the light of our findings recorded therein Hence the said ground no. 4 of the assessee is dismissed.

Ground No. 5 relates to addition made by the Assessing officer on account of payment made to transporter of Rs. 1,00,00,000/-

The facts of the case are that during the course of the assessment proceedings the AO raised a query before the assessee vide notice u/s 142(1) dated 22.04.2021 w.r.t. alleged cash receipt of Rs. 1 Cr. from Shiv Group, Gandhidham by way of over invoicing. The relevant extract of the query asked by the AO is given hereunder :

In response to the said query, reply was submitted by the assessee vide letter dated 31.05.2021 stating that Shiv Group Gandhidham is one of the logistic service provider for transportation of fuel and during the year various transactions has been entered with the party for transportation of fuel and that no such cash payment has been received by the company from the aforesaid party and all the transactions were made through proper banking channel only. The assessee company also submitted along with its reply a confirmation letter dated 18-05-2021 from Shiv Group wherein it has been stated that all the transactions entered with Shree Cement Limited are genuine and there is no case of over invoicing in respect of the same as alleged by the department.

However, the AO was not satisfied and proposed an addition of Rs. 1 Cr. in the draft assessment order u/s 144C dated 24.06.2021. The assessee again in response filed a reply wherein it was requested to the AO to produce the documents relied upon as they have neither been shared with the appellant nor opportunity has been given to cross verify the same.

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 :

The ld. DR on the other hand strongly supported the finding recorded in the orders of lower authorities and submitted that the addition is made based on the material found in survey conducted at the premises of the Shiv Group, Gandhidham. The assessee has merely submitted the confirmation and has not rebutted the contention of the revenue.

We have carefully heard the rival contentions and perused written submissions filed by the assessee. We have gone through the finding recorded in the order of the ld. AO & CIT(A) as well. The bench noted that the apple of discord for this addition is that whether the addition can be made on the third party evidence without being shared to the assessee and without affording any cross examination to the assessee for countering those relied upon third party evidence? order has alleged that during survey on one Shiv Group, a pen drive was found, and the impounded pen drive had an excel file namely ‘cash account’. Mr. Suresh Pillai in his recorded statement stated that transactions made against over invoicing, and cash was sent back to Shree Cement. Against the above contention, the appellant vide letter dated 31-05-2021 requested the AO to share the documents based on which addition was proposed. The appellant also requested for cross examination of the person based on whose statement addition was proposed. The appellant vide 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.

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 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 to cross-examine witnesses whose statements were relied upon by the Adjudicating Authority resulted in a breach of principles of natural justice. The order based solely on witness statements was considered a serious flaw and rendered null and void. The bench also noted that in the present case, the assessee has filed copies of all invoices, bank statement as well as confirmation from the said party that submitting the evidence in support of the claim that the transactions are genuine. Hence, the onus now shifts to department to counter them and provide evidence that the transaction is not genuine. We find that the AO in the present case has not discharged its onus despite repeated requests from the assessee to provide documents to justify the justified in confirming the addition made by AO in summary without dealing with the contentions and his finding on the contention so raised by the assessee. This ground is therefore decided in favour of the assessee addition made of Rs 1 Crore on the basis of mere assumption and presumption is deleted. Ground No. 5 is therefore allowed.

Ground No. 6 relates to 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.

Ground No. 6 deals with exclusion of incentives received by the appellant during the year under normal provisions of the Act as well as under the provisions of Sec. 115JB. As regards the exclusion of incentives under normal provisions, the same has been extensively dealt with by us vide Ground No. 5 of assessee’s appeal for AY 2016-17 in ITA No. 496/JPR/2023.

With regard to exclusion of said incentives under MAT provisions, the appellant submitted the issue is already covered in favour of the assessee by the decision of Hon’ble Rajasthan HC in assessee’s own case in AY 2006-07 to AY 2009-10 (ITA No. 85- 87/2014 & 227/2016 vide Orders dated 22-08-2017) wherein the incentives being in the nature of capital receipt has been held to be excluded while computing Book Profit u/s 115JB of the Act.

But, considering the amendment made in the act and detailed finding given by the Hon’ble Bombay High Court in the judgment 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. section 80IA and 80-IC in computing Book Profit under section 115JB of the Act.

Ground No. 7 in this appeal is same as Ground 4 of assessee’s appeal for AY 2015-16 in 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 allowed.

Ground No. 8 related to exclusion of notional income while computing Book Profit u/s 115JB of the Act.

Apropos to this ground the brief facts of the case are that during the year, the assessee company in view of adoption of Ind- AS had credited an amount of Rs. 676.49 Crs. as transition amount to the retained earnings as on 01-04-2016 being notional income.

The assessee company however, vide notes to Form 29B contended that said amount were notional in nature and hence should be excluded from computation of book profit u/s 115JB. The said contention was also placed before the AO during the course of assessment proceedings as well vide letter dated 05.07.2019.

The said finding of the ld. AO was challenged before the ld. CIT(A). The claim of the assessee was disallowed on the contention that due to the specific amendments brought in Sec.

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 :

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.

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 various assets to be recorded at Fair Market Value and not at Historic Cost basis. The appellant’s contention is that due to above, various notional entries have been passed in the books of accounts which includes notional income credited to Profit & Loss statement. ld. CIT(A) has also stated that Statement due to adoption of Ind AS is not disputed. However, we find that there are 2 types of notional entries passed. (a) Transition amount on first time adaptation of Ind AS which is credited to retained earnings and not to P&L Statement (Rs. 135.30 Crs.) and (b) Mark to Market/Amortised cost as per Ind AS 109 on account of fair valuation of shares and mutual funds (Rs. 108.03 Crs.). The contention of the ld. AR of the assessee is that both are notional income and not real income. Any income can be brought to tax only when it is real and actual income and not mere accounting entries.

The argument made by the ld. AR of the assessee is not acceptable in full on the issue on hand. Upon perusal of the provision of section 115JB of the Act, it is noted that the legislature has brought necessary amendments to Section 115JB to give effect to the computation of book profit for the purpose of levy of MAT u/s. 115 JB of the and a new section 115JB (2C) has been introduced w.e.f. 01-04-2017 which reads as below –

Since there is specific amendment brought to Section 115JB of the Act from AY 2017-18 onwards i.e. the year under appeal, we have no doubt in rejecting the contention of the assessee and one- fifth of the transition amount of Rs. 135.30 Crs. as referred to herein above as (a) which has been credited to retained earnings needs to be offered to tax while computing Book Profit u/s 115JB of the Act.

However, we find force in the contention 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.

We have already noted in the earlier part of our order that Zero Coupon OFCDs issued on 30th June 1995 which was issued at par for Rs. 441.57 crores was converted into 72388770 equity shares in financial year 2020-21 and the total convergence was at par only. The Zero Coupon OFCDs issued in the year 2015 and 2016 issued for sums aggregating to Rs. 1510.30 crores, the entire ZOFCDs was redeemed in the financial year 2016-17 at par. Thus, even though it has been redeemed within the year in a very short span of a year, then also there is neither any interest component nor any financial liability in the form of compounding financial instruments or any kind of discounting factor which can be said to be applicable. Nor assessee has claimed in the financial account or treated it as financial liability. The fact that it was redeemed will not take away the character at the time of issuance of Zero coupon OFCDs as both the issuer and investors had understood that it would be converted into equity shares at par and that's the precise reason no financial liability has been recognized on these instruments by the assessee. This aspect of this matter has already discussed in the earlier part of the order.

Now coming to the 0% fully unsecured debentures issued in the year 1996, they have been bought back by the company during the FY 2016-17 at par and the OFCDs have been cancelled. Even these OFCDs issued in year 1996 for the period of a decade, no financial liability or any interest cost has been taken into profit and loss account even for the purpose of disclosure under the Companies Act.

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.”

Relying on the above decisions, we hold that notional income amounting to Rs. 83,35,74,971/- on account of bonds and debentures and Rs. 24,67,00,000/- on account of shares and mutual fund aggregating to Rs. 108,02,74,971/- represents notional income and hence needs to be excluded while computing Book Profit u/s 115JB of the Act. Based on this observation the ground no 8 of the assessee is therefore partly allowed.

The brief facts of the case are that the assessee during the captioned assessment year has computed Interest u/s 234C amounting to Rs. 1,43,60,496/- on its tax liability. The said interest was arising on account of shortfall in payment of advance tax for Quarter – III for AY 2017-18. The Ld. AR of the assessee submitted that out of the interest as computed, interest amounting to Rs. 1,38,85,263/- was arising on account of shortfall on payment of advance tax due to additional income arising as a result of first-time adoption of Ind-AS in the captioned assessment year and due to profit on sale of investment post the payment of advance tax for the quarter – III. Hence, it has resulted in the excess liability of Interest amounting to Rs. 1,38,85,263/- levied needs to be deleted.

On this issue the relevant finding of the ld. CIT(A) is reiterated here in below :

The ld. AR of the assessee that the decision of the ld. CIT(A) is cryptic and has not decided this ground considering the specific prayer of the assessee.

Per contra, the ld. DR representing the revenue has supported the order of the ld. CITA(A) and submitted that since the interest chargeable u/s. 234C of the Act being mandatorily in nature there is no merits in the grounds of the assessee is required to be dismissed.

We have gone through the contentions recorded in the orders of the lower authorities and also perused the material placed on record. We agree with the contention of the A/R that Section 234C, 1st proviso specifically states that interest shall not be chargeable on account of failure to estimate shortfall arising on account of capital gains 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. 1-4- 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.

Ground No. 10 (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.

In the result, appeal of the assessee’s in is partly allowed.

Now we take up Department Appeal in for assessment year 2017-18.

Ground No. 1 relates to the appeal of the revenue against deletion by CIT(Appeals) of disallowance of Rs. 4,82,58,43,293/- on account of deduction u/s 80IA in respect of captive power plants.

Ground No. 1 in this appeal is same as Ground 1 of Departmental Appeal for AY 2015-16 on deduction u/s 80IA. The ld. A/R submitted that for AY 2017-18, the facts are similar to the facts for AY 2015-16. During the year the appellant has claimed grinding units. Out of the above, deduction is claimed on New India Power undertaking for the 1st time, whereas in respect of balance undertakings, claim had started in earlier years. The above new Power undertaking was set up with the objective to take initiative of setting up renewable energy-based power plants throughout the country to cater to its power requirement. The said undertaking comprises of power units located at Chattisgarh, Rajasthan and upcoming unit in Karnataka in respect of which part capex has already been incurred during the year under consideration, with the common objective of supplying power to its cement manufacturing unit. Since the undertaking is set up and has commenced operations prior to 01-04-2017, it is an eligible undertaking for the purposes of deduction u/s 80IA.

On all the above Power Undertakings, the assessee has adopted Transfer Price for the purpose of power transferred by the Power Generating Units (‘PGUs’) to the Cement Manufacturing Unit (‘CMU’) based on annual average landed cost rate of power sold by the State Electricity Board (‘Grid/SEB’) during the year to the nearby manufacturing units of independent Comparable Uncontrolled Price (‘CUP’) Method. These grounds have been extensively dealt with in Departmental Appeal for AY 2015-16 in Departmental appeal for AY 2016-17 in 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.

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.

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 market value of clinker and thereby applying Profit Split method.

Ground No. 3 relates to allowing the appeal of the assessee by deleting the disallowance of Rs. 21,72,02,610/- on account of deduction u/s 80IA on account of Water Treatment System.

Ground No. 3 in this appeal is same as Ground 3 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 assessee has computed transfer price of water on the basis of quotation obtained from Bisleri International Pvt. Ltd after certain adjustments. However, TPO proceeded to apply Cost Plus Method by applying the gross margin earned by other companies of 84.30% and rejected the assessee’s methodology of benchmarking. These grounds have been extensively dealt with in Departmental Appeal for AY 2015-16 in 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.

Ground No. 4 relates to allowing the appeal of the assessee by deleting the disallowance of Rs. 4,70,31,231/- on account of deduction u/s 80IA of Rail system due to adjustment of Transfer Pricing.

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 2017-18, the facts are similar to the transfer price of services provided by RIFS to eligible/non-eligible units 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 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 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.

In the result, appeal of the Revenue is dismissed.

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.

The case of the assessee was selected for complete scrutiny assessment under the E-assessment Scheme, 2019 on the following issues:

In view of the specified domestic transactions, reference under section 92CA was made to the Transfer Pricing Officer (TPO). The TPO passed an order under section 92CA(3) of the Act dated 31.07.2021 proposing various upward adjustments aggregating to Rs. 11,49,87,29,378/-. The ld. AO after incorporating the proposed adjustment made by the TPO and after making further disallowances for various deduction claimed by the assessee passed draft assessment order under section 144C r.w.s. 144B of the Act on 27.09.2021 determining total income under the normal provisions of the Act at Rs. 14,12,86,20,102/-.

Since the assessee did not intend to exercise the option available u/s 144C to file objections before the Dispute Resolution Panel, the ld. AO passed final order under section 144C read with section 143(3) of the Act on 01.12.2021 by making various disallowances/additions to the returned income of the assessee as under:-

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.

Both assessee and revenue are not satisfied with findings of the ld. CIT(A), preferred the present appeal before this tribunal.

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 prescribed date and it was not passed in accordance with the provisions of Section 144B(1)(xvi)(b) of the Act.

Before us, the ld. AR of the assessee 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 & 2 of appeal is therefore dismissed.

Ground No. 3 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 manufacturing units of the assessee.

Ground No. 3 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 per unit in computing Transfer Price of Power for the purpose of deduction u/s 80-IA of the Act. The ld. AR of the assessee submitted that for AY 2018-19, the facts are similar to the facts for AY 2015-16. This ground has been extensively dealt with while dealing with Assessee’s Appeal for AY 2015-16 in and in the light of our detailed findings recorded therein, we hold that reliability charge of Rs. 1.50 per unit should be allowed to the assessee. Thus ground no. 3 of appeal is therefore allowed.

Ground No. 4 relates to 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 assesse is eligible for higher deduction u/s 80-IA of the Act.

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/-.

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.

Ground No. 6 relates to deletion of erroneous addition made u/s 69B on account of unexplained investments amounting to Rs. 15,88,041/-

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 -

Thereafter, vide Show Cause Notice dated 22-09-2021, ld. AO proposed to make disallowance of an amount equal to 8% of Rs. 5,15,19,20,587/-, amounting to Rs. 41,21,53,647/- on account of alleged purchases made from suppliers who are either non-filers of ITR or filed non-business ITR or reflected a substantial lower turnover in ITR as compared to turnover shown in their GSTR-1 return. Against above SCN, assessee vide letter dated 24-09-2021 submitted that it cannot identify the suppliers who are Non Filer(s) or have filed non-business ITR or reflected a substantially lower turnover in ITR as compared to the turnover shown in GSTR-1 return, as the ITR or GST return filed by the said suppliers is not ld. AO to furnish the supporting documents of Rs. 5,15,19,20,587/- based on which disallowance is proposed.

However, the ld. AO proceeded to pass the Draft Order u/s 144C on 27-09-2021 wherein the same facts have been reiterated as it was mentioned in the Show Cause Notice dated 22.09.2021 and disallowance of Rs. 41,21,53,647/- was proposed. In response to the said Draft Order, the assessee vide letter dated 01-10-2021 again requested ld. AO to provide the details of the parties, based on the above request, AO issued another Notice u/s 142(1) dated 11-10-2021 wherein PAN of the suppliers along with the purchase value was provided to the assessee. The sum total of which was Rs. 5,65,44,992/- as against Rs. 5,15,19,29,587/- that was alleged in the Draft Order dated 27-09-2021. In response to the said Notice, the assessee filed detailed reply on 20-10-2021 wherein the details along with tax invoices with the suppliers were duly furnished.

After considering the replies of the assessee, the Ld. AO vide its order u/s 143(3) dated 30.11.2021 made an addition of Rs. amount as per Insight portal of department and purchase details submitted by the appellant in respect to 3 parties. The said addition has been considered as unexplained investments u/s 69B as purchases not fully disclosed in the books of account of the assessee.

Feeling dissatisfied with the finding of the ld. AO the appeal was preferred before ld. CIT(A) wherein this ground was taken.

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.

Before us, the ld. AR of the assessee submitted his written submission and the same is reiterated here in below:-

Per contra, the ld. DR supported the finding of the ld. CIT(A) who has categorically held that the while finalizing the assessment the ld. AO was very much fair and granted the relief for which the assessee was eligible and thus, the ld. DR supported the finding recorded in the orders of the lower authority.

We have carefully 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 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 investigator when the assessee has furnished all the details he is duty bound to asked the assessee the specific defaults and the information in his possession read with the records provided by the assessee. The bench noted that how the assessing officer has proposed the addition and how ultimately he made the addition is without appreciating the information placed on record by the assessee. We see that there is no finding about details as available in the Insight Portal and only after being satisfied on the basis of corroborative evidence, such disallowance can be made. Since the ld. A.O. failed to point out any defect in the details supplied by the assessee, the disallowance made by the A.O. merely on surmises and suspicion is not sustainable and thus, directed to be deleted. Hence the ground no. 6 raised by the assessee is allowed.

Ground No. 7 relates to rejecting the claim of 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.

Ground No. 7 deals with exclusion of incentives received by the assessee during the year under normal provisions of the Act as well as under the provisions of Sec. 115JB. As regards the exclusion of incentives under normal provisions, the same has been extensively dealt with by us vide Ground No. 5 of assessee’s appeal for AY 2016-17 in ITA No. 496/JPR/2023. provisions, the assessee submitted that the issue is already covered in favour of the assessee by the decision of Hon’ble Rajasthan HC in assessee’s own case in AY 2006-07 to AY 2009- 10 (ITA No. 85-87/2014 & 227/2016 vide Orders dated 22-08-2017) wherein the incentives being in the nature of capital receipt has been held to be excluded while computing Book Profit u/s 115JB of the Act.

But, considering detailed finding given by the Hon’ble Bombay High Court in the judgment 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, 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. 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. section 80IA and 80-IC in computing Book Profit under section 115JB of the Act.

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 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. 9 relates to exclusion of notional income while computing Book Profit u/s 115JB of the Act.

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 issue has been discussed in detail in 497/JPR/2023 wherein the assessee’s plea on the same ground has been rejected. Ground no. 9 of appeal is therefore dismissed.

Ground No. 10 (Additional Ground) relates to claim of depreciation 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.

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.

In the result, appeal of the assessee is partly allowed.

Now we take up Department Appeal in deletion by CIT(Appeals) of the disallowance of Rs. 5,83,93,48,615/- on account of deduction u/s 80IA in respect of captive power plants.

Ground No. 1 in this appeal is same as Ground 1 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.

During the year as well the appellant has claimed deduction for 9 Power Undertakings, located at various cement and grinding units. Although no new undertaking has commenced operations during the year, in one of its power undertaking, namely, New India Power undertaking, wind power unit (being a source of renewable energy based power plant) has been set up as expansion of the said power undertaking having common management and control, common set of books of accounts etc. and entire process of approval of all the power units of the undertaking having already been undertaken prior to 01-04-2017.

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.

Ground No. 3 in this appeal is same as Ground 3 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 computed transfer price of water on the basis of quotation obtained from Bisleri International Pvt. Ltd after certain adjustments. However, TPO proceeded to apply Cost Plus Method by applying the gross margin earned by other companies of 81.09% and rejected the assessee’s methodology of benchmarking. These grounds have been extensively dealt with in Departmental Appeal for AY 2015-16 in 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.