DCIT CIR-4(1), KOLKATA, AAYAKAR BHAWAN V. MCLEOD RUSSEL INDIA LTD, KOLKATA

ITA 1169/KOL/2023

AI Insights

The case involves Mcleod Russel India Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-22, Kolkata, concerning the assessment year 2013-14. The primary issues were the deletion of an arms' length price adjustment of Rs. 99,66,822 made by the TPO and the allowance of a deduction under Section 80IE of the Income Tax Act. The Tribunal examined the methods used for determining the arms' length price of inter-unit transfers and the criteria for substantial expansion under Section 80IE, ultimately agreeing with the Ld. CIT(A)'s findings and dismissing the revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298594 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Other Referred Cases: Jayshree Industries Ltd Vs Jt. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revenue expenditure; Transfer pricing; International transaction; Depreciation; Cost of acquisition; Search and seizure
• Section: 143(3); 142(1); 143(2); 48; 32; 92CA; 14A; 10B

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “डी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 DCIT, Circle-4(1), Kolkata Vs. Mcleod Russel India Ltd. (PAN: AAACE 6918 J) Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 17.03.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 16.04.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Smt. Priyanka Salarpuria, AR For the revenue / राजèव कȧ ओर से Shri S Datta, CITDR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the revenue against the order of Commissioner of Income Tax (Appeals)- 22, Kolkata (hereinafter referred to as the Ld. CIT(A)] dated 02.06.2023 for AY 2013-14. 2 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. 2. It appears from the report of the registry that the appeal has been filed after a delay of 93 days but as per the assessee delay is for only 57 days from the date f receiving copy of the order, for which assessee has filed condonation petition, which is as follows- On perusal of the condonation petition, the reason for delay in filing the appeal seems to be genuine and bonafide. The Ld. A.R did not raise any objection in condoning the delay. Keeping in view, the condonation petition as well as judicial pronouncement 3 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. that the case should be decided on merit not on technical issue, the delay is hereby condoned. 3. Brief facts of the case of the assessee are that the assessee company was engaged primarily in the business of cultivation and manufacture of tea, company filed return of income for AY 2013-14 declaring total income of Rs. 36,48,96,214/-. The return of income was selected for scrutiny, notices u/s 143(2) and subsequently 142(1) were issued, since the assessee company during the proceedings under assessment year had entered into the international transaction within the meaning of Section 92CA of the Act, hence, the case of the assessee was referred to the concerned transfer pricing officer after obtaining necessary administrative approval of the concerned authorities in order to get the arms’ length price of those transactions to be determined by TPO. The order u/s 92CA(3) of the Act was passed, a draft of the proposed order of the assessment has been forwarded to the assessee. The AO after going over the entire facts held the followings: “The downward adjustment for purchase = 98,91,009/- The upward adjustment for sale = 75,813.21 Total adjustment Rs. 99,66,822.21” The AO has further added other revenue expenditure amounting to Rs. 9,81,605/-, dividend distribution tax u/s 115O an amount of Rs. 63,92,344/-, disallowance of expenditure u/s 14A an amount of Rs. 26,14,568/-, deduction claimed u/s 80IE an amount of Rs. 1,02,16,66,888/- an assessed the total income of the assessee at Rs. 1,01,86,47,760/-. 4. Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the Ld. CIT(A) has allowed the appeal of the assessee on the addition of an amount of Rs. 99,66,822/- and also allowed the appeal of the assessee made u/s 80IE restricting the claim of Rs. 1,02,16,66,888/-. Being aggrieved and dissatisfied the department has preferred an appeal before us. 4 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. 5. The Ld. D.R challenges the very impugned order thereby submitting that the Ld. CIT(A) has erred on the facts and the circumstances in allowing the claim of the assessee in violation of Section 80IE and further erred in facts and law in deleting the arms’ length price adjustment at Rs. 99,66,822/- made by TPO. 6. Contrary to that the Ld. A.R supports the impugned order thereby submitting that the assessee explained that for any inter-unit of transfer of tea leaves the company adopted the monthly average price method while preparing the stand-alone account for the eligible units u/s 80IE at the year end. The Ld. Counsel further submitted that this method was uniformly applied across all the receipts and disposed of the inter-unit transfers. The ld. Counsel further submits that the TPO had selectively applied the monthly average price method under CUP method and made adjustment only on those months where the purchases were unfavourable and ignored the remaining moths where the inter-unit transfer price were higher than third party purchases made. The Ld. Counsel further submits that identical manner of downward adjustment to the inter-unit transfer were made by TPO in the subsequent AY 2014-15 as well as that the Ld. CIT(A) had deleted the same in the order dated 27.02.2019. The Ld. Counsel further submits that the assessee carries of the tea plantation business through 54 tea estates out of which 48 are in Assam, 6 in West Bengal and the assessee had claimed deduction of Rs. 1,02,16,66,888/- u/s 80IE in respect of 42 tea estates. The ld. Counsel further submits that in the earlier assessment year i. e. AY 2010-11 and 2011-12 the then AO had also disallowed the claim u/s 80IE and assessee has filed an appeal against the same order and the Ld. CIT(A) has given relief and that order has been confirmed by the ITAT, Kolkata. 7. Upon hearing the submission of the counsel of the respective parties. It appears to us that the department has raised two grounds before the Tribunal. Grounds are that the Ld. CIT(A) has erred in law in deleting the arms’ length price adjustment at Rs. 99,66,822/- and further erred by allowing the claim of the assessee u/s 80IE of the Act. In this context, we have gone through the order passed by the Ld. CIT(A) and find that in discussing the issues of TPO, the Ld. CIT(A) has considered the case of the assessee 5 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. on the basis of the order passed by the Ld. CIT(A) confirmed by the ITAT. The operative portion of the Ld. CIT(A)’s order is here in below : “I have examined the entire issue carefully including the TPO’s order, the appellant’s submissions and the decisions rendered in the appellant’s own case. I find that this identical issue had come up in the subsequent AY 2014-15 in which the appellant has been granted relief by the Ld. CIT(A). During the year, I find that the appellant had computed the transfer value of inter-unit dispatches of tea leaves at the average annual weighted price of the respective tea garden. It is noted that the data available to apply average annual weighted price method was sufficiently large and therefore reliable. The Ld. TPO is noted to have not pointed out any specific infirmity in this benchmarking exercise, instead he changed the method from annual average price method to monthly average price method only in few instances of inter unit transfers wherein the monthly average price was higher than the annual average price, ignoring the months/periods when the same was lower. I note that the appellant has rightly pointed that if the Ld. TPO felt that monthly average price method was better than annual average price method, then he ought to have applied it across all eligible tea gardens for all the months. Had the same been done across all inter unit transfers for all the months, the overall result i.e. the aggregate transfer value so arrived at would be comparable with the aggregate value of inter unit transfers computed under the annual average price method. I therefore find merit in the submission of the appellant that the impugned adjustment was not tenable on facts and in law. It is noted that the Ld. CIT(A) in the appeal order dated 27.02.2019 in Appeal No. dated 102/CIT(A)-22/14-15/17-18/Kol for the succeeding AY 2014-15 has deleted identical transfer pricing adjustment made by the TPO.” In this context, our attention has been drawn by the Ld. A.R on the order passed by the Ld. CIT(A) for AY 2014-15 with regard to application of CUP method which is as follows: 5.3.5. Rule 10B of the I. T. Rules, 1962 prescribes the following with regard to application of the CUP method: “(1)(a) comparable uncontrolled price method, by which – i) The price charged or paid for property transferred or services provided in a comparable uncontrolled transaction, or a number of such transactions, is identified. ii) Such price is adjusted to account for differences, if any, between the international transaction and the comparable uncontrolled transactions or between the enterprises entering into such transactions, which could materially affect the price int eh open market; iii) The adjusted price arrived at under sub-clause (ii) is taken to be an arm’s length price in respect of the property transferred or services provided in the international transaction;” In the present case, the arm’ length price of the loan advanced by the assessee to its associated enterprises is required to be determined under the CUP method. The assessee has also used the same method.” 6 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. Keeping in view, the order passed by the Ld. CIT(A) and the facts of the case as discussed above, we do not find any infirmity in the impugned order on this issue. 8. So far, the next issue i.e. disallowance u/s 80IE is concerned, we find that the Ld. CIT(A) has allowed the appeal of the assessee on the identical facts for AY 2014-15. The Ld. CIT(A) has allowed the appeal of the assessee and that order has been confirmed by the ITAT. We have gone through the order passed by the Ld. CIT(A) and find that the Ld. CIT(A) in its order had discussed this issue at length which is essential to reproduce hereinbelow: “I have carefully considered the submissions filed by the appellant and gone through the order of the ld. A.O. I have also perused the assessment orders and the appellate orders passed for the earlier as well as subsequent years. It is noted that the appellant had claimed deduction u/s 80IE of the Act of Rs.1,02,16,66,888/- in respect of its forty one tea estates. In the impugned order, the A.O is noted to have accepted and allowed deduction u/s 80IE of the Act to the extent of Rs.36,98,94,965/- relating to nineteen tea estates but denied the balance deduction of Rs.65,17,71,923 relating to twenty-two tea estates. The AO had observed that his predecessors in the income tax assessment framed u/s 143(3) of the Act for the earlier years had denied the same, holding that these twenty-two tea estates did not fulfil the parameters of 'substantial expansion and therefore as they were held to be ineligible for deduction u/s 801E of the Act in their respective initial assessment years, the appellant was not entitled to claim deduction u/s 80-IE in the subsequent years viz., AY 2013-14. From the details placed before me, it is noted that in the first nine tea estates viz. Borongajuli, Dufflaghur, Behora, Dirial, Raidang, Phulbari, Mahakali, Behali, and Attabarie, the initial year of claim was AY 2000-10. It is noted that the AO who framed the income tax assessment us 143(3) for AY 2009-10 had accepted the eligibility of those nine undertakings and allowed the deduction claimed in respect of their profits u/s 801E of the Act. Hence, it is noted that in the present AY 2013-14, the AO arrived at an erroneous conclusion that the deduction us 80IE in respect of these nine tea estates had bean disallowed in AY 2009-10 which was clearly not the case and in that view of the matter the denial of deduction u/s 80E in respect of these nine tea estates is held to be unwarranted. As noted in the foregoing, these nine tea estates were held to be eligible for deduction u/s 80IE by the AO in the initial year i.e. AY 2000-10 and therefore as a corollary the appellant is entitled to claim deduction u/s 80IE in respect of these nine undertakings aggregating to Rs. 23,44,24,483/- in the relevant AY 2013-14 as well. With regard to the remaining thirteen tea estates viz., Paneery, Moran, Mijicajan, Monabarie, Dehing. Philobhari, Bogapani, Rajmai, Nya Gogra, Dirok, Bordubi, Harchurah and Itakhooli; it is noted that the appellant had had undertaken substantial expansion at these tea gardens in earlier AYs 2010-11, 2011-12 & 2012-13. The substantial expansion for the purposes of Section 80IE meant increase in the book value of the plant & machinery by 25% in comparison to the book value of P&M block at the beginning of the year in which the substantial expansion began. From the material available on record, it is noted that the Ld. AO questioned the allowability of deduction u/s 80IE for the first time in the assessment order framed u/s 143(3) for AY 2010- 11 and noted that wherever the substantial expansion at tea gardens were not completed in the same year but in subsequent year/s, the tea estate were not eligible for claiming deduction u/s 7 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. 80-1E of the Act. By placing such interpretation on provisions of Section 801E of the Act, the AO rejected the claim for deduction u/s 80E in respect of profits derived by these thirteen tea gardens in AYs 2010-11, 2011-12 & 2012-13. It is noted that on appeal, the Ld. CIT(A) in AYs 2010-11 & 2011-12 in his order dated 05.10.2015 held that to qualify for deduction u/s 80IE it was not mandatory for the assessee to show that the substantial expansion was carried out only in one previous year. In the opinion of the Ld. CIT(A), the language of Section 801E nowhere mandated that to avail the deduction u/s 80IE the substantial expansion must be carried out only in one year and it cannot be spread over more than one financial year. The Ld. CIT(A) accordingly directed the Ld. AO to allow the deduction u/s 80IE since the assessee had established with cogent evidence that each tea garden had attained ‘subsequent expansion’ in the previous year relevant to AYs 2010-11 & 2011-12. On further appeal by the Revenue, the Hon’ble ITAT, Kolkata vide their order in ITA No.116&117/Kol/2016 dated 01.02.2019 is noted to have upheld the Ld. CIT(A)’s order by holding as follows: “2. We first take up the appeal filed by the Revenue in ITA No. 116/Kol/2016 for AY 2010-11. Ground No. 1 raised by the Revenue relates to disallowance of deduction u/s 80IE claimed in respect of profits derived by four tea gardens on the premise that the expansion program in respect of these four tea gardens took place over a period of more than one financial year. Briefly stated facts of the case are that in the return filed the assessee had claimed deduction in respect of profits derived by twenty-eight tea gardens in which the substantial expansion was carried out by the assessee. The eligible undertakings inter alia included nine tea gardens in respect of which deduction u/s 80IE was claimed for the first time because the substantial expansion of the nine tea gardens attained completion during the relevant previous year. In the impugned order the AO admitted that the assessee had produced books of accounts and other details including fixed assets registers of these nine tea gardens in support of its contention that substantial expansion of these gardens was completed during the relevant financial year. On examination of these documents the AO however noted that out of nine tea gardens, in respect of four tea gardens the process of substantial expansion was started in FY 2007-08 and the deduction was first claimed in AY 2010- 11 on the premise that the programme for substantial expansion attained completion in the relevant previous year. According to AO since the substantial expansion was spread over more than one financial year, the criteria laid down in Section 80IE(7) for claiming the deduction was not satisfied and since the substantial expansion was conducted in more than one financial year, it could not be held that the condition of Section 80IE(7)(i) & (iii) were satisfied in FY 2009-10 relevant to AY 2010-11. Accordingly the AO denied the deduction u/s 80IE in respect of four tea gardens, namely Moran, Paneery, Mona bari and Mijicajan. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A) who allowed the assessee's claim for deduction u/s 80IE by holding as follows: \"9.6 From the empirical data provided by the assessee, I find that the technical ' teams at tea gardens had devised systematic plan for expansion of production capacities at each of the 4 tea gardens. Based on the work studies carried out at the factories the bottlenecks were identified by the Technical teams. After analyzing the production process the technical teams identified the bottlenecks & then recommended additions to be made in different Sections so as to remove the sectional imbalance and increase the overall production finished tea. The technical team also estimated the overall cost of the expansion project and sought sanction for additional funds. Since the technical studies carried out at twenty eight gardens recommended need for undertaking debottlenecking processes, it was not possible for the appellant to provide requisite funds for 8 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. all the gardens in one go and in one year in the circumstances it was decided that the debottlenecking exercises would be carried out in a phased manner over a period of two to three financial years by which time the production capacities would get suitably enhanced. Accordingly the four gardens namely Moran, Paneery, Monabarie & Mijicajan invested Rs. 86,13,154/-, Rs. 78,37,009/-, Rs. 2,55,48,207/- & Rs. 118,63,673/- respectively during AYs 2008-09, 2009-10 & 2010-11 in pursuance of the expansion programme formulated by the technical teams for debottlenecking of the production processes at these 4 gardens. From the information placed before me. It appeared that as a consequence the production of tea at Moran, Paneery, Monabarie & Mijicajan went up by 69660 kgs. 87810 kgs., 78020 kgs & 56829 kgs. respectively in AY 2010-11 as compared with AY 2008-09 being the year in which expansion program was conceived & commenced. This empirical data established that not only the assessee made substantial additions to plant & machineries: aggregate cost of which exceeded 25% of the actual cost of machineries at the four tea gardens but as a consequence of the expansion program undertaken, the actual production of tea at all the four gardens actually recorded increase. Had it been a case that the assessee made additions to plant & machineries in the ordinary course of its business and without there being any systematic plan for undertaking expansion of the tea undertaking then there would not have been substantial increase in the production of tea between the period 2008-09 & 2010-11. On the contrary the documents placed on record proved that the management of the appellant had specially undertaken technical studies at the respective factories to identify the bottlenecks which were causing non-optimal utilization of the production capacities. After conducting detailed work studies, the sections causing bottlenecks were identified. To overcome the bottlenecks a systematic plan was devised on the basis of which the assessee systematically at each of the four gardens with an objective of achieving overall increase in the production. On the facts as are available it cannot therefore be said that the additions made between AYs 2008-09 to 2010-11 at four gardens did not form integral part of the program for expanding the existing undertakings. From the facts & materials on record, it appeared that the assessee had indeed devised and thereafter executed a systematic expansion of its production capacities by adding and installing plant & machineries aggregate value of which exceeded 25% of the actual cost of the plant & machinery which was existing at the time when the expansion program commenced in AY 2008-09. 9.7. In the impugned order the AO placed much reliance on the fact that the assessee had claimed depreciation on some of the items of plant & machineries installed and put to use in AYs 2008-09 and 2009-10. In the circumstances if the machineries were actually used by the appellant in the prior years, then it meant that even without the expansion of the undertaking these machineries were capable of being used and therefore for deciding whether the criteria as laid down in section 80IE was fulfilled, cost of such plant & machineries could not be taken into account. In my considered opinion the condition which the AO has read into section 80IE reads as follows: (2) This section applies to any undertaking which has during the period beginning on the 1st day of April, 2007 and ending before the 1st day of April, 2017 begun or begins, in any of the North Eastern States - (i) to manufacture or produce any eligible article or thing 9 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. (ii) to undertake substantial expansion to manufacture or produce any eligible article or thing (iii) to carry on any eligible business (7) For the purposes of this section - (iii) 'substantial expansion' means increase in the investment in the plant and machinery by at least twenty-five per cent of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken 9.8 From the plain reading of Section 801E, it is apparent that nowhere the Section requires that the additions to the fixed assets exceeding 25% should be carried out in any one previous year. There is no bar on the assessee to conduct or carry out the expansion programs over a period of time that would exceed one financial year. The language of the Act indicates that the threshold limit concerning addition to plant & machineries exceeding 25% should be calculated with reference to the actual cost of the plant & machinery of the relevant undertaking as on the first date of the previous year in which tire expansion of the undertaking is commenced by the assessee. If the expansion is commenced in the year 1 and the same gets completed in the year 3 then it has to be demonstrated that the additions made as a part of the expansion program exceeded 25oio of the cost of plant & machinery of that undertaking on the first date of the first financial year The language of Section 80lE does not preclude the assessee to claim depreciation at any time during the period when the expansion is ongoing. The language employed by the Legislature nowhere provides that it is only on completion of the entire expansion project that the assessee should pass entries in its books recording the capitalization of actual costs and only thereafter the assessee should claim depreciation allowance in respect of these machineries. The language employed in Section 80IE does not prohibit the assessee from capitalizing the cost of plant & machinery forming part of the substantial expansion in its books from time to time and claim depreciation if the conditions of section 32 are fulfilled section 80IE also does not require the assessee from making the expanded undertaking operational only in one go. There is no prohibition in section 80IE of the Act if the expanded undertaking becomes operational I phases and depreciation thereon is claimed accordingly. In my opinion the interpretation of section 80IE as made by the AO is not correct since he has imposed his own restrictive conditions which are not so prescribed by the Legislature. The AO has interpreted Section 80IE in a manner by which the assessee's are precluded from capitalizing the cost of expansion in a phased manner. AO has also imposed prohibition from making the expansion program operational in phases. 9.9 I find merit in the submissions of the AR that Section B0lE is a beneficial provision of the LT. Act. lt is enacted by the Legislature to provide boost to the economic and industrial growth of the North Eastern part of India which is known to be economically backward. The intention of the Legislature in enacting Section 80lE was to encourage even the existing industrial undertaking to make additional & fresh investment in plant & machineries so that industrial growth in the North Eastern part of the country was given impetus. The intent and purpose of enacting Section 80lE was to provide profit based incentive to those assessee who made investments exceeding 25% of actual cost of their existing plant & machineries and thereby increase the production capacities. From the facts as placed before me it is evident that the assessee had undertaken substantial expansion of its production capacities at 10 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. twenty eight gardens. Obviously when number of undertakings were as large as twenty eight, it was not possible for the assessee to provide funds for carrying out expansion at all twenty eight gar-dens in one year. In the circumstances as a prudent businessman the assessee had undertaken expansion at four tea estates in a phased manner over a period of three financial years. The empirical data proved that therefore the additions were made a technical study and evaluation of production processes was carried out by the technical teams of the assessee. The technical teams after conducting work studies had identified the sectional imbalances in the production capacities and suggested additions in the plant & machineries in different sections to bring about debottlenecking of the production process. In view of the constraint on the funds the exercise of debottlenecking was carried out in phases. As and when section-wise debottlenecking was carried out the newly installed machineries were put to use and thereby increase in production was achieved in gradual and phased manner. On the conclusion of the expansion program the overall production actually recorded substantial increase. On these facts therefore I am satisfied that merely because the substantial expansion was carried out in phased manner and the assets comprised in the expansion were put to use in the earlier financial year could not negate the appellant's claim for deduction u/s 80IE of the Act, particularly when the factual matrix of the case established that the aggregate cost of acquisition of various plant & machineries in the four tea gardens exceeded threshold limit of 25% considered cumulatively over a period AYs 2008-09 to AYTs 2010-11. From the details furnished I find that the conditions specified in section 80IE of the Act were fulfilled by the assessee. On the contrary I find that the AO has read into section 80IE such conditions which were not expressly enacted by the Legislature and therefore the AO was not justified in rejecting the claim u/s 80IE.\" Against the order of the Ld. CIT(A), the Revenue is in appeal before us. 3. We have heard the rival submissions of both the parties. The Ld. DR appearing on behalf of the Revenue strongly relied on the order of the AO and vehemently argued that in order to claim deduction u/s 80IE it was necessary for the assessee to demonstrate that the substantial expansion had been carried out only in one financial year. Referring to clauses (i) & (iii) of Section 80IE(7) the Ld. DR submitted that for the purpose of ascertaining whether the substantial expansion has been carried out, the comparison should necessarily be made between the gross block of plant & machinery at the completion of substantial expansion and the gross block of plant & machinery on the opening date of the relevant previous year in which substantial expansion is complete. Since in the assessee's case this crucial test was not met, the Ld. DR argued that the AO was perfectly justified in rejecting the assessee's claim for deduction in respect of these four gardens. 4. Per contra, the Ld. AR fully supported the appellate order wherein the Ld. CIT(A) had discussed all the relevant facts and material as also applicable legal provisions of Section 80IE. The Ld. AR also brought to our attention the decision of the coordinate bench of this Tribunal in the case of Jayshree Industries Ltd Vs Jt. CIT in ITA No. 359/Kol/2014 dated 16.03.2018 wherein identical question was answered in favour of the assessee. The Ld. AR therefore claimed that qua this Tribunal the issue involved in this ground was no longer res integra and was squarely decided in assessee's favour. He therefore prayed that the order of the Ld. CIT(A) be upheld. 5. After giving due consideration to the facts of the case and findings recorded by the Ld. CIT(A) in his appellate order, we find that in the impugned order the Ld. CIT(A) 11 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. after going through the material filed before the AO came to a definite finding that the assessee had in fact made addition to the block of plant & machinery which exceeded 25% in value compared to the opening gross block of plant & machinery as on 01.04.2007 being the first day of the financial year in which the substantial expansion had begun. Before us the Ld. DR was unable to controvert this factual finding of the Ld. CIT(A). We therefore the find that the only issue agitated by the Revenue in Ground No. 1 is answered squarely in assessee's favour by this Tribunal in case of Jayshree Industries Ltd Vs Jt. CIT (supra). In that case also the AO had disallowed the assessee's claim for deduction u/s 80IE in respect of tea garden on the ground that increase in the investment in the plant & machinery by more than 25% of the book value was carried out in more than one financial year. This Tribunal after examining the provisions of Section 80IE recorded a categorical finding that nowhere the said Section mandated that the substantial expansion once commenced should be completed within the same financial year. The coordinate Bench of this Tribunal therefore did not find merit in the Revenue's objection that for claiming deduction u/s 80IE it was necessary for the assessee to achieve the substantial expansion within one financial year. Respectfully following the aforesaid decision in the case of Jayshree Industries Ltd Vs Jt. CIT (supra), we reject Ground No. 1 of the Revenue.” Following the above decision of ITAT, Kolkata, it is noted that the Ld. CIT(A) in appellant’s own order for A.Y 2014-15 in Appeal No.102/CIT(A)-22/14-15/17-18/Kol dated 27.02.2019 has allowed the deduction u/s 80IE of the Act in respect of all these tea estates including the thirteen tea estates in question in the relevant A.Y 2013-14.” 9. Going over the order passed by the Ld. CIT(A), we do not find any infirmity in the impugned order. Accordingly, the appeal of the revenue is hereby dismissed. In the result, the appeal filed by the revenue is dismissed. Order is pronounced in the open court on 16th April, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated:16th April, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- DCIT, Circle-4(1), Kolkata 2. Respondent – M/s Mcleod Russel India Ltd., 4, Mangoe Lane, Kolkata-700001 3. Ld. CIT(A)- 22, Kolkata 12 I.T.A. No. 1169/Kol/2023 Assessment Year: 2013-14 Mcleod Russel India Ltd. 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "