ACIT,, NEW DELHI vs. M/S SBEC BIOENERGY LTD.,, BARAUT

This is an appeal by the department against the order dated 14.07.2016 of ld. CIT(A)-17, New Delhi.

Following grounds have been raised in this appeal: “1. Whether the Ld. CIT(A) was right in deleting the addition of Rs.6,07,97,612/- made by the AO on account of sale of steam.

Facts of the case in brief are that the assessee e-filed return of income on 27.09.2012 declaring a loss of Rs.40,73,240/- under the normal provisions and Rs.2,51,45,780/- as deemed total income u/s 115JB of the Income Tax Act, 1961 (hereinafter referred to as the Act). The said return was processed u/s 143(1) of the Act on 16.02.2014 at the returned loss. Later on, the case was selected for scrutiny. The AO during the course of assessment proceedings noticed that the assessee had shown production of steam at 2,57,617 ton which was supplied to M/s SSL free of cost instead of Rs.75/- per ton being sold in earlier years. He asked the assessee to explain as to why no income had been accounted for on the account of sale of steam supplied to SBEC Sugar Ltd. and as to why rate of steam sold to M/s SSL should not be taken at Rs.236/- per ton as per earlier years. In response, the assessee submitted that it had received correspondences from M/s SSL informing of their decision not to pay for any exhaust steam under the conversion agreement dated 10.12.1998 which did not come into operation at all since the same was subject to the approval of PICUP and no approval had been received. It was also stated that the invoicing for exhaust steam being done @ Rs.75/- per ton, on the basis of an interim arrangement arrived at between SSL & SIAL had also been objected to by SSL and they had stopped making payment w.e.f. October 2001. The AO, however, did not find merit in the submissions of the assessee and worked out the value of the sold steam by applying the rate of Rs.236/- per ton. Accordingly, addition of Rs.6,07,97,612/- (Rs. 236/- × 2,57,617) was made.

Now the department is in appeal. The ld. Sr. DR strongly supported the assessment order passed by the AO and reiterated the observations made therein.

In his rival submissions, the ld. Counsel for the assessee submitted that the issue has been decided in favour of the assessee by the ITAT Delhi Bench ‘G’, New Delhi in for the assessment year 2011-12 vide order dated 25.10.2017 by following the earlier orders passed by the Tribunal in the preceding years (copy of the said orders were furnished which are placed on record).

We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that an identical issue has been decided against the department and in favour of the assessee in the preceding years starting from the assessment years 2007-08 to 2011-12 in 1099/Del/2013, 1583/Del/2013, 5805/Del/2013 and 6693/Del/2014, orders dated 07.03.2012, 13.03.2015, 28.02.2014, 20.03.2015 and 25.10.2017 respectively for the assessment years 2007-08 to 2011-12 respectively are placed at page nos. 19 to 67 of the assessee’s paper book. So, respectfully following the earlier orders of the Tribunal, we do not see any valid ground to interfere with the impugned

In the result, the appeal of the department is dismissed. (Order Pronounced in the Court on 23/04/2018)