DCIT, NEW DELHI V. DCM SHRIRAM LTD, NEW DELHI

ITA 927/DEL/2022

AI Insights

The case involves multiple appeals by both the Revenue and the assessee concerning various assessment years. The primary issues revolved around the transfer pricing adjustments made by the TPO, the deductions claimed under section 80IA of the Income Tax Act, and the disallowances made under sections 14A and 50C. The Tribunal examined the applicability of the arm's length principle to the transactions in question, the correctness of the deductions claimed, and the procedural adherence in making the adjustments. The Tribunal's decision was influenced by previous judgments and the specific circumstances of each assessment year.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705477 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: Jindal Steel and Power Limited vs. CIT, Godawari Power & Ispat Ltd. vs. CIT, NTT Data Global Delivery Services Ltd. vs. DCIT, Teenimont ICB (P) Ltd. vs. ACIT, Gujarat Alkalies & Chemicals Ltd. vs. CIT, McAfee Software (India) Pvt. Ltd. vs. DCIT, Olympus Medical Systems India Pvt. Ltd. vs. DCIT, L.G. Electronics INC vs. DCIT, Dania Oro Jewellery Pvt. Ltd. vs. ACIT, Gimpex Pvt. Ltd. vs. ACIT, S Vinodkumar Diamonds Pvt. Ltd. vs. ACIT, Shahi Exports Pvt. Ltd. vs. ACIT, Text Hundred India Pvt. Ltd. vs. CIT, K. Venkatramaiah vs. A. Seetharama Reddy, Arjan Singh vs. Kartar Singh, Sesa Goa Ltd. vs. CIT, Patel Brass Works Pvt. Ltd. vs. ACIT, Rachna infrastructure Pvt. Ltd. vs. CIT, Seven N Consulting Pvt. Ltd. vs. ACIT, SRF Ltd. vs. ACIT, Jagtap Patil Promoters and Builders vs. ACIT, M/s. SRF Ltd. vs. ACIT, M/s. DCM Shriram Industries Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIP DINODIA
• Assessee Lawyers: DHARM VEER SINGH; CERTAIN JUDGEMENTS NAMELY; APPLYING; CPC WITHOUT ANY BASIS
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Additional evidence; Revised return; Transfer pricing; International transaction; Reasonable cause; Question of law; Bad and doubtful debts; Depreciation; Additional depreciation; Sale consideration of property below Jantri Value; Fair market value; Rule of consistency; Commercial expediency; Gift; Capital Gains; Principle of natural justice; TDS; Earning of tax free income; Notional interest; Initiation of penalty proceedings; Double taxation relief; Rule 8D; Non-deduction of tax; Arm length price
• Section: 143(3); 271(1)(c); 68; 90; 14A; 43B; 50C; 115JB; 92B; 119(2)(b); 10B; 10AA; 80IB; 92C; 80G; 139(5)

Judgement Text

"ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “I” BENCH: NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.927/Del/2022 [Assessment Year : 2015-16] DCIT, Circle-7(1), Room No.404, C.R. Building, New Delhi-110002. vs DCM Shriram Ltd., 5th Floor, Kanchenjunga Building, 18-Barakhamba Road, Connaught Place, New Delhi-110001. PAN-AAACD0079R APPELLANT RESPONDENT ITA No.704/Del/2021 [Assessment Year : 2016-17] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs Additional/Joint/ Deputy/Assistant CIT/ITO, NeAC, Delhi APPELLANT RESPONDENT ITA No.2587/Del/2022 [Assessment Year : 2018-19] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs ACIT, Circle-7(1), Delhi APPELLANT RESPONDENT ITA No.4328/Del/2024 [Assessment Year : 2020-21] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs Assessment Unit, Income tax Department, Delhi APPELLANT RESPONDENT ITA No.1495/Del/2024 [Assessment Year : 2020-21] DCM Shriram Ltd., 2nd Floor (West Wing), Worldmark 1, Aerocity, New Delhi-110037. PAN-AAACD0097R vs DCIT, Circle-7(1), New Delhi APPELLANT RESPONDENT ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 2 Appellant by Shri Pradip Dinodia, CA, Shri R.K.Kapoor, CA, Shri Ravi Kumar, CA, Ms. Shruti Gupta, CA & Shri Ayush Chaurasia, CA Respondent by Shri Dharm Veer Singh, CIT DR Date of Hearing 24.04.2025 Date of Pronouncement 30.06.2025 ORDER PER MANISH AGARWAL, AM : These captioned appeals are filed by the Revenue and the assessee for various AYs. Since in all the appeals, certain issues are common therefore, these are decided separately by a common order for the sake of convenience and brevity. 2. First, we take up ITA No.927/Del/ 2022 for AY 2015-16. ITA No.927/Del/2022 (AY 2015-16) [Revenue’s appeal] 3. This appeal is filed by the Revenue against the order dated 16.09.2020 passed by Ld. Commissioner of Income Tax (A)-44, New Delhi [“Ld.CIT(A)”] in Appeal No.-78/2019-20/CIT(A)-44 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 28.12.2018 passed u/s 143(3)/144C of the Act pertaining to assessment year 2015-16. 4. Brief facts of the case are that the assessee is a public limited company engaged in the business of manufacturing and trading of chemical, PVC Resins, PVC compounds, UPVC Windows & Door Systems, Cement, Sugar, Fertilizers, seeds, textile yarn, power generation etc. The return of income was filed on 28.11.2015, declaring total income at INR 29,48,96,750/- after claiming ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 3 deduction under section 80IA of the Act in respect of power generation unit and also claimed deduction under section 80G of the Act. The company has declared book profit u/s 115JB at INR 2,46,12,21,172/- and paid MAT on book profits. The return of income was revised on 13.07.2016 at an income of INR 22,56,33,190/-. The case of the assessee was taken up for scrutiny and a reference under section 92CA of the Act was made to the TPO for determination of ALP in respect of international transactions and specified domestic transactions carried out by the assessee during the previous year relevant to year under appeal. The assessee has carried out following international and specified domestic transactions- S.No. Description of international transactions Amount (Rs.) 1. Sale of Hybrid Seeds 4,92,72,652 2. Interest on Outstanding receivables 1,00,99,611 3. Interest income 1,66,924 4. Bad debts Written off 87,26,814 Total 6,82,66,001 S.No. Description of Specified Domestic transactions Amount (Rs.) 1. Purchase of finished goods (Fertilizers) 18,70,16,242 2. Interest paid on inter-corporate deposits/loan 13,40,391 3. Rental expenditure 4,28,13,157 4. Director’s Remuneration 13,08,54,514 5. Remuneration paid to relative of director 41,56,788 6. Director’s sitting fees 15,35,000 7. Commission paid to directors 1,29,49,000 8. Purchase of Goods (PVC Compounds) 5,57,003 Total 38,12,22,095 5. The TPO after examining the TP Study Report (“TPSR”) submitted by the assessee and further examined the details filed in ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 4 response to the query raised by the TPO, vide its order dated 29.10.2018 held that the international transactions carried out by the assessee company are at Arm Length Price and no adjustment was proposed on these transactions. With respect to specified domestic transactions, the TPO observed that the deduction claimed under section 80IA of the Act on the profits from power generation units needs to be reduced and observed that the transfer of electricity generated by power generating units to other manufacturing units was not at ALP and proposed reduction of INR 7,96,94,566/- in the deduction claimed under section 80IA of the Act on this activity. Further, in respect of transfer of steam from eligible units to non-eligible manufacturing plants, the TPO has proposed the reduction of INR 98,26,24,597/- accordingly, the total adjustment of INR 1,06,23,19,163/- is proposed by the TPO out of total deduction at INR 2,20,33,90,434/- claimed by the assessee. Besides this, the AO had also made disallowances of INR 1.52 crores under section 14A of the Act and accordingly, the total income of the assessee is computed at INR 1,26,72,68,289/- and book profit under section 115JB for MAT purposes was computed at INR 2,31,11,56,502/-. 6. Against that order, the assessee preferred appeal before the Ld. CIT(A) who vide impugned order dated 16.09.2020 has deleted the adjustments made towards deduction claimed u/s 80IA towards transfer pricing adjustment and further, deleted the addition made under section 14A of the Act. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 5 7. Aggrieved by the said order, the Revenue is in appeal before the Tribunal where the Revenue has taken following grounds of appeal- 1. “Whether on facts and in circumstances of the case and in law, the CIT(A) erred in law & on facts in not appreciating the facts of the case and deleting the adjustment on transfer of power in Rajasthan Region when the internal CUP data was not available. 2. Whether on the facts and in the circumstances of the case and in law the Ld. CIT (A) erred in law & on facts in deleting the adjustment proposed by the TPO on account of transfer of steam. 3. The appellant craves, leave, modify, add or forego in any ground(s) of appeal at any time before or during the hearing of this appeal.” 8. The Revenue vide letter dated 23.04.2025 has raised following additional grounds of appeal- 1. “Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in law & on facts in deleting the addition made by the AO to the tune of Rs. 1,52,00,000/- as per provisions of Section 14A of the Income Tax Act, 1961? 2. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in law & on facts in deleting the addition made by the AO in the MAT income to the tune of Rs. 1,52,00,000/- as per provisions of Section 14A of the Income Tax Act, 1961?” 9. Ground No.1 raised by the Revenue is with respect to the deletion of adjustment made towards transfer of power generated in Rajasthan of INR 7,96,94,566/- from eligible unit to non-eligible unit and claimed deduction u/w 80IA on the same. The assessee owns various captive power plants for production of power and supply of power generated therein amongst the other units. The power production units are eligible for deduction under section 80IA of the Act and therefore, the power transferred from eligible unit to non-eligible unit has been treated as specified domestic transaction and according to the assessee, the value charged was at ALP. The assessee in its TP-SR has justified the prices charged for ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 6 supply of power by applying Internal CUP in the form of prices at which power was sold/purchased from respective State Electricity Board. The TPO accepted all the transactions be as per ALP other than transactions between eligible and non-eligible units of Kota where TPO has benchmarked the average price of Internal CUP as adopted by the appellant-assessee and External CUP in the form of IEX price and proposed the adjustment of INR 7,96,94,566/-. Ld. CIT(A) while observing that the TPO in assessee’s own case for AY 2016-17 vide order passed under section 92CA(iii) of the Act dated 31.10.2019 has made no adjustment on this account and further observed that between AYs 1997-98 to 2013-14 and in AY 2016-17, no such adjustments were made and thus, deleted the adjustment made by the TPO by following the rule of consistency. 10. Before us, Ld. CIT DR for the Revenue supported the order of TPO and AO with respect to the adjustment made towards reduction in deduction claimed u/s 80IA from the profits from transfer of electricity generated by the eligible units to non-eligible units and prayed for the confirmation of the order of AO/TPO. 11. On the other hand, Ld.AR for the assessee drew our attention to the decision of Co-ordinate Bench of Tribunal in assessee’s own case for AY 2014-15 in ITA No.7362/Del/2018 where the Co- ordinate Bench vide order dated 28.10.2021 upheld the assessee’s contention of working out the ALP with regard to the transfer of electricity between eligible unit to non-eligible units. The Tribunal has accepted the comparables of the assessee in the form of power purchased from the respective State Electricity Boards which in the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 7 instant year is from Jaipur Vidyut Vitran Nigam Limited (“JVVNL”) and rejected the TPO’s action of using IEX data as External CUP. 12. Ld. AR further submits that order of Co-ordinate Bench was confirmed by the Hon’ble Jurisdictional High Court vide its order dated 21.01.2025 in ITA No. 566 of 2023. The Reliance is further placed on the judgement of Hon’ble Supreme Court in the case of Jindal Steel and Power Limited reported in 460 ITR 162 (SC) wherein the Hon’ble Supreme Court has defined the principle for determination of market value of goods and services for the purpose of deduction u/s 80IA of the Act. 13. We have heard the rival contentions and perused the material available on record. In the instant case, the assessee has produced electricity on various locations which were transferred from eligible units to non eligible units. The TPO in its order passed under section 92CA has accepted all the transactions from eligible units to non-eligible units at arm length price except with regard to the electricity produced at Kota. The assessee has benchmarked the transfer of electricity at a price of INR 8.35 per KWH rate i.e. the rate at which the electricity was actually purchased from JVVNL in Rajasthan region. Since the price per KWH taken by the assessee for transfer of electricity from eligible unit to non-eligible unit is INR 6.45 per KWH therefore, it was claimed that it is at ALP. The TPO has obtained the rates from IEX and asked the assessee as to why External CUP method should not be applied, and sale rate of power should not be taken at average price at which power was purchased by the assessee from JVVNL and average price of IEX. Thereafter, the TPO has taken hybrid approach where TPO t rate at which the power is the assessee has purchase the TPO has worked out the average and the difference was taken at and made the adjustment of order, has made the adjustment as proposed by t deleted by Ld. CIT(A) by observing 6.2. Ground No. 2 (including 2.0 to 2.7): “These grounds have been raised against an adjustment of ₹7,96,94,566 proposed by TPO in his order towards the ALP of power transferred from eligible units to various captive power plants for production of power an power amongst others to its other non eligible for claim of deductions u/s 801A as per the provisions of In Tax Act. As per the TP Study of the appellant (pages 95 to 211 of the Paper Book filed before me), the following transactions of power supply between the eligible and non-eligible units have been reported which are treated by the appellant to be in ar In its TP analysis / TP Study, the appellant has justified the price charged by it for the supply of power by applying an internal CUP in the form of price at which power was sold / purchased from the respective State Electricity Boards. The TPO, accepted all the transactions to be in arms length other than the transaction involving the eligible and non which she benchmarked using the average price of the internal CUP as adopted by the appellant and the external CUP in t accordingly proposed TP adjustment to the tune of $ 7,96,94,566. The primacy of internal comparables wherever available, over the external ones is already a settled issue. Hon'ble Delhi Bench ITAT in the case of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 the TPO has taken hybrid approach where TPO took the average of hich the power is transacted at IEX and the rate on which has purchased the power from JVVNL. Accordingly, the TPO has worked out the average rate at INR 6.1725 per the difference was taken at INR 0.278 per KWH (6.45 nd made the adjustment of INR 7,96,94,566/-. The AO has made the adjustment as proposed by the TPO which by observing as under:- Ground No. 2 (including 2.0 to 2.7): “These grounds have been raised against an adjustment of 7,96,94,566 proposed by TPO in his order towards the ALP of power transferred from eligible units to non-eligible units. The appellant operates various captive power plants for production of power and supply such power amongst others to its other non-eligible units. The power plants are eligible for claim of deductions u/s 801A as per the provisions of In Tax Act. As per the TP Study of the appellant (pages 95 to 211 of the Paper Book filed before me), the following transactions of power supply between eligible units have been reported which are treated by the appellant to be in arms length. In its TP analysis / TP Study, the appellant has justified the price charged by it for the supply of power by applying an internal CUP in the form of price at which power was sold / purchased from the respective State Electricity TPO, accepted all the transactions to be in arms length other than the transaction involving the eligible and non-eligible units of Kota which she benchmarked using the average price of the internal CUP as adopted by the appellant and the external CUP in the form of lEX price and accordingly proposed TP adjustment to the tune of $ 7,96,94,566. The primacy of internal comparables wherever available, over the external ones is already a settled issue. Hon'ble Delhi Bench ITAT in the case of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 8 k the average of and the rate on which . Accordingly, 6.1725 per KWH (6.45 – 6.1725) AO in the final he TPO which was “These grounds have been raised against an adjustment of 7,96,94,566 proposed by TPO in his order towards the ALP of power eligible units. The appellant operates d supply such eligible units. The power plants are eligible for claim of deductions u/s 801A as per the provisions of Income Tax Act. As per the TP Study of the appellant (pages 95 to 211 of the Paper Book filed before me), the following transactions of power supply between eligible units have been reported which are treated by In its TP analysis / TP Study, the appellant has justified the price charged by it for the supply of power by applying an internal CUP in the form of price at which power was sold / purchased from the respective State Electricity TPO, accepted all the transactions to be in arms length other eligible units of Kota which she benchmarked using the average price of the internal CUP as he form of lEX price and accordingly proposed TP adjustment to the tune of $ 7,96,94,566. The primacy of internal comparables wherever available, over the external ones is already a settled issue. Hon'ble Delhi Bench ITAT in the case of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 9 Destination of the World (Subcontinent) (P) Ltd. v. ACIT [12 taxmann.com 310 (Del)], held that - \"Preference should be given first to the internal comparables and reference has to be made so the results of independent enterprises only when the former course of action is not possible.\" Similarly, Hon'ble Mumbai ITAT in the case of Teenimont ICB (P) Ltd. v. ACIT |2012] 24 taxmann.com 28 (Mum) (TM) held that - \"Thus where potential comparable is available in the shape of an uncontrolled transaction of the same assessee, it is likely to have higher degree of comparability vis-a-vis comparables identified amongst the uncontrolled transactions of third parties. The underlying object behind computing ALP of an international transaction is to find out the profits which such enterprise would have earned if the transaction had been with some third party instead of related party. When the data is available showing profit margin of that enterprise itself from a third party, it is always safe and advisable to have recourse to such internal comparable case. The reason is patent that the various factors having bearing on the quality of output, assets employed, input cost etc, continue to remain by and large same in case of an internal comparable. The effect of difference due to such inherent factors on comparison made with the third parties, gets neutralized when comparison is made with internal comparable. Ex consequenti, it follows that an internal comparable uncontrolled transaction is more noteworthy vis-a-vis its counterpart i.e. external comparable.\" Hon 'ble ITAT, Hyderabad, relying on the above ruling of Teonimont ICB in the case of NTT Data Global Delivery Services Ltd. v. DCIT [ITA No. 505/Hyd/2014) also held that - \"This view expressed by Hon'ble third Member was followed by ITAT, Mumbai Bench and ITAT Bangalore Bench, in the decisions cited before us by Ld. AR, while observing that internal comparables should get preference over external comparables. Therefore, applying aforesaid principle to the facts of the present case, it can be held that, as the assessee during the year has undertaken transactions with both AEs and non-AEs, and as claimed, has not only maintained segmental details of such transactions, but, has also undertaken comparative analysis in its TP study, it has to be looked into an objective manner before rejecting the same.\" Similarly, it has been affirmed in a number of decisions that the rate of power charged by the State Electricity Boards constitute the 'market value' of the goods which it would fetch in the open market and this meets the standards of section 80IA(8) of the Income Tax Act. Hon'ble Chhatisgarh High Court in the case of Godawari Power & Ispat Ltd. [42 taxmann.com 55] held that - \"31. The market value of the power supplied to the Steel-Division should be computed considering the rate of power to a consumer in the open market and it should not be compared with the rate of power when it is sold to a supplier as this is not the rate for which a consumer or the Steel-Division ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 10 could have purchased power in the open market. The rate of power to a supplier is not the market rate 10 a consumer in the open market. 32. In our opinion, the AO committed an illegality in computing the market value by taking into account the rate charged to a supplier: it should have been compared with the market value of power supplied to a consumer. 33. It is admitted by the Department that in Chattisgarh the power was supplied to the industrial consumers at the rate of ≥ 3.20/- per unit for the AY 2004-05 and 2 3.75/- per unit for the AYs 2005-06 and 2006-07.It was this rate that was to be considered while computing the market value of the power. Hon 'ble ITAT, Hyderabad, relying on the above ruling of Teonimont ICB in the case of NTT Data Global Delivery Services Ltd. v. DCIT [ITA No. 505/Hyd/2014) also held that - \"This view expressed by Hon'ble third Member was followed by ITAT, Mumbai Bench and ITAT Bangalore Bench, in the decisions cited before us by Ld. AR, while observing that internal comparables should get preference over external comparables. Therefore, applying aforesaid principle to the facts of the present case, it can be held that, as the assessee during the year has undertaken transactions with both AEs and non-AEs, and as claimed, has not only maintained segmental details of such transactions, but, has also undertaken comparative analysis in its TP study, it has to be looked into an objective manner before rejecting the same.\" Similarly, it has been affirmed in a number of decisions that the rate of power charged by the State Electricity Boards constitute the 'market value' of the goods which it would fetch in the open market and this meets the standards of section 80IA(8) of the Income Tax Act. Hon'ble Chhatisgarh High Court in the case of Godawari Power & Ispat Ltd. [42 taxmann.com 55] held that - \"31. The market value of the power supplied to the Steel-Division should be computed considering the rate of power to a consumer in the open market and it should not be compared with the rate of power when it is sold to a supplier as this is not the rate for which a consumer or the Steel-Division could have purchased power in the open market. The rate of power to a supplier is not the market rate 10 a consumer in the open market. 32. In our opinion, the AO committed an illegality in computing the market value by taking into account the rate charged to a supplier: it should have been compared with the market value of power supplied to a consumer. 33. It is admitted by the Department that in Chattisgarh the power was supplied to the industrial consumers at the rate of Rs. 3.20/- per unit for the AY 2004-05 and Rs. 3.75/- per unit for the AYs 2005-06 and 2006-07. It was this rate that was to be considered while computing the market value of the power. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 11 34. The CIT(Appeals) and the Tribunal had righty computed the market rate of the power after considering it with the rate of power available in the open marker namely the price charged by the Board”. Hon ble Gujarat high Court in the case of Gujarat Alkalies & Chemicals Ltd. 188 taxmann. com 722) has held that rate of 7 4.51 per electricity unit charged by aversee's eligible unit from non-eligible unit represented cost of electricity generation to the assevee especially when it is not in dispute that SEB charged ≥ 5.00 per unit for supplying electricity to other industries including non-eligible unit of the assessee itself. The case of the appellant when analyzed in the light of the above backdrop and judicial precedents, makes it amply clear that the TPO has erred in selectively disregarding an evisting internal comparable in respect of one eligible unit at Kota while at the same time accepting the ALP determined on the basis of the same internal comparable in respect of other eligible units at Hariawan, Ajbapur, Loni and Bharuch. Similarly, the TPO's approach of using the average of an external CUP (IEX Data) and the internal CUP (JVVNL rate) to benchmark the ALP is also not proper. The law and rules don't approve of averaging of the prices of an internal and one external CUP data. The concept of averaging under the CUP method is not provided under the provisions of law. Once a direct CUP is available after an appropriate FAR analysis, then that in itself is sufficient to be used for benchmarking the transactions undertaken by an entity. It is also seen that the appellant has been consistently adopting the same yardstick to benchmark the rates charged by its various eligible units from non-eligible units from A.Y. 1997-98 to A.Y. 2014-15. The AO/TPO has accepted the approach adopted by the appellant during all these years. Similarly, the appellant has filed a copy of order for subsequent A.Y. i.e. A. Y. 2016-17 passed u/s 92CA(3) dated 31.10.2019 from where also it is noted that no adjustment or addition has been made on this issue of supply of power. This is the solitary year in between A.Y. 1997-98 onwards till A.Y. 2016-17 that an addition has been made that too only in one of the power plants at Kota. In my view, this is not a regular and consistent approach by the Assessing Officer. I accept the contentions of the appellant that rule of consistency also favour the case of the appellant. Although principle of res-judicata are not applicable to the income tax proceedings yet the rule of consistency is required to be adhered to in case of no change in facts and circumstance of case from the previous years. Appellant's reliance on various case laws in its submissions is well placed. Accordingly and in view of the above, addition made by AO amounting to Rs. 7,96,94,566/- on account of ALP adjustment in power supply from eligible to non-eligible unit is directed to be deleted. Ground of Appeal No. 2 (including 2.0 to 2.7) is decided in favour of the appellant. 14. Further in assessee’s own case for AY 2014-15 in ITA No.7362/Del/2018, the Co-ordinate Bench of the Tribunal has ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 12 deleted the additions made on account of adjustment in the price and transfer of power between eligible units to non-eligible units by making following observations- 30. Firstly if we look at the rate Indian energy exchange which is stated to be pertaining to Rajasthan region is Rs 2.55 per kilowatt whereas the rates at which the power was purchased by the assessee in Rajasthan from SEBs ₹ 8.35 per kilowatt. This shows that the rates at which the power is sold by SEBs is 3.30 times higher than the rates which are quoted by Indian energy exchange. It is also undisputed fact that most of the power is supplied in Rajasthan region by Jaipur Vidhyout Vitran Nigam Limited and used by the consumers. Whereas there is no data available that how much power is being sold at the platform of Indian energy exchange in Rajasthan region. 31. It is also an undisputed fact that product comparability is a critical element while applying cup method and needs to be closely examined. In case if there are any differences identified between the controlled and uncontrolled transaction that would affect price, adjustment should be made to the price of the uncontrolled transaction is in order to make the same comparable to the controlled transaction is. No doubt the product similarity exist in the above transactions. However comparability Under the cup method depends on the similarity with respect to the following factors also which could materially affect the price in uncontrolled transaction i. quality of the product ii. contractual terms (i.e. scope and terms of warranties provided, sales are purchased volume, credit terms, transport terms) iii. level of market (i.e. whole sale or retail etc) iv. geographic market in which the transaction takes place v. date of the transaction vi. intangible property associated with the sale, foreign currency risks and alternatives realistically available to the buyer and seller the learned transfer pricing officer has used the average sale price for the financial year 2013 – 14 available at the Indian energy exchange. Therefore there cannot be much of the grievance when the assessee also charges the same rate for the whole year. However the claim made by the assessee before us which remains uncontroverted is that Indian energy exchange is not the main exchange where the power is traded. As per the Indian power market journey so far and way forward June 2014 report published by Indian energy exchange which is available in public domain has categorically stated that the size of power exchange-based market has grown to 3% approximately of the total electricity generated. Therefore the argument of the learned transfer pricing officer that Indian energy exchange is the main exchange where nearly 95 – 96% of power is traded is a negative by the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 13 report of Indian energy exchange itself. Therefore it is apparent that it is the very minuscule part of the total power traded. Further the Indian energy exchange is a spot exchange and cannot be compared with the continuous power supplied by SEBs to the assessee. Of course, in Indian energy exchange there would always be a doubt about the availability of continuous power. This shows that there are material differences existing between the transaction entered into by the assessee for transfer of power and the rates stated by Indian energy exchange. Undoubtedly the rates quoted at Indian energy exchange are based on the bid price rather than the actual quantity consumed by the assessee. Even otherwise the data is not available in the public domain and learned transfer pricing officer has used the powers u/s 133 (6) of the act to obtain such rates i.e. data. Furthermore the Indian energy exchange rates are also required to be adjusted for the various levies and other variable charges of transmission et cetera as well as the transmission loss. Even otherwise the assessee has submitted the land rate at Indian energy exchange which shows the average price at ₹ 6.36 per kilowatt by taking base rate at Rs 2.55. Even if the average of the SEBI rates at ₹ 8.35 per kilowatt and the landed rate at Indian energy exchange at ₹ 6.36 per kilowatt is averaged out it comes to ₹ 7.355 per kilowatt which is more than the rates at which the power is transferred from eligible unit to non-eligible unit at Kota Rajasthan by the assessee i.e. at ₹ 6.30 kilowatt. 32. There is no doubt that the rates at which the SEBs supplies power to the assessee is an perfect external cup. Such rates are ₹ 8.35 per kilowatt. Rates of Indian energy exchange shown at Rs 2 .55 per kilowatt. If the rates of SEB compared with the rates of Indian energy exchange clearly shows that there is a wide disparity between the two rates. It is not in dispute that SEB in Rajasthan is supplying power to majority of the consumer using electricity. Therefore, much sanctity is attached to the rates adopted by SEBs. However, the learned transfer pricing officer has failed to show the reason of such a wide disparity between the rates of Indian energy exchange which is a spot exchange compared with the rates at which the energy is actually consumed in that geographical region. This does not mean that the quoted price cannot be used for the comparability analysis in cup method. But if the prices are so divergent and the difference between the two external cup becomes irreconcilable, the external cup price which is more reliable should be used. Therefore, in our view, IEX rates for these reasons cannot be said to be an external cup available for invoking the provisions of first proviso to Section 92C (2) of the act. 33. Further in case of the assessee for assessment year 2015 – 16 , external corporate of purchase price of power from SEB is used as a comparable discarding the Indian energy exchange rate by the learned CIT – A, and the same order has not been challenged before the higher forum, it becomes final. This shows that in the subsequent year the learned transfer pricing officer/assessing officer has accepted the methodology of benchmarking the transaction of transfer of power in Rajasthan from eligible unit to non eligible unit at the purchase price of power from SEB. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 14 34. In view of the above facts we do not find any infirmity in the benchmarking analysis of the assessee wherein the assessee has considered rate of ₹ 6.30 per kilowatt against the rate of power purchase paid by the assessee to Jaipur Vidyiut Vitran Nigam Limited at the rate of ₹ 8.35 per kilowatt, using the external cup for comparability. Accordingly, the ground number 2 of the appeal of the assessee is allowed and the transfer pricing adjustment of ₹ 265,298,490/– is deleted.” 15. It is relevant to state that such order of ITAT is confirmed by the Hon’ble Jurisdictional High Court in ITA No.566/2023 vide order dated 02.05.2024, the Hon’ble High Court has held that Revenue has failed to controvert the assertions that rates in IEX are for power purchase and not for power consumption whereas electricity supply by power distribution company is charged on the basis of power consumed. The Hon’ble Court further followed the Judgement of Hon’ble Supreme Court in the case of Jindal Steel & Power Ltd. (supra) and held the order of the Tribunal as reasonable order and confirmed the same. The observations of the Hon’ble Court as contained in para 43 to 60 are reproduced as under- 43. In the present case, the question is to determine the market value or the ALP of power supplied by power plants established by the Assessee to its other units. Supplying of electricity is governed by the Electricity (Supply) Act, 1948 and Electricity Act, 2003. The transmission of electricity is also governed by the Electricity Rules, 2005. 44. Thus, the market for supply of electricity is regulated. Thus, to apply the CUP method, it would be necessary to ascertain the comparable transactions that are similar in material aspects and there is no difference between the transactions which has a bearing on the price of the power supplied. 45. The question whether the average IEX rate at which power is traded on IEX, is a comparable uncontrolled transaction, is required to be evaluated by determining whether there are any differences between the specified domestic transaction6 and the uncontrolled transaction of trade on the IEX. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 15 46. The Assessee states - and the same is not controverted - that the availability of power on IEX is unpredictable and the supply of power is unreliable. 47. It is stated that in order for a party to purchase power from IEX, the said party has to participate in the bidding process. The same entails furnishing a bid in advance for supply of fifteen minutes slots. Illustratively, it is stated that if a party requires power supply for a period of four hours, it would be required to submit sixteen bids for fifteen minutes slots. Further, the bidder cannot resile from the bids furnished by it in advance. 48. In view of the above, it is contended that power traded on IEX cannot be compared with the power supplied by a SEB. 49. It is not disputed that IEX is a platform, which is used by power producing units to sell surplus power for short term requirements. IEX is not a platform for sourcing continuous power for power consuming units. It is also pointed out that there is a high level of volatility in the IEX rates as it depends on immediate availability of surplus electricity. 50. It is also contended by the Assessee that the rates quoted on IEX are in respect of power supplied and not the power that is consumed and therefore, there is a material difference between the power that is purchased from IEX and the power which is supplied by the SEBs or power distribution companies. The said submission is also not controverted. The Assessee claims that it had on occasions purchased power from IEX. 51. We find considerable merit in the Assessee's contention that the transactions of sale and purchase of power on the IEX is not comparable to the regular supply of power by the SEB or the power distribution companies. Undisputedly, IEX is not a source for uninterrupted power on the basis of which any power consumer can set up its unit. It is also not disputed that there is a wide fluctuation in the IEX rates. The Revenue has also not controverted the assertion that rates for power quoted on IEX are for power purchased and not for power consumed. Thus, if an entity bids for certain quantity of power on IEX and is successful, it is required to pay for the same. However, the electricity supplied by power distribution companies is charged on the basis of the power consumed, which is recorded in the metering devices. 52. It is also clear that the said material differences between the electricity supplied by SEBs or power distribution companies and those secured by bidding on IEX would have a significant bearing on the price of power. 53. As noted above, the CUP method is an appropriate method only in cases where there is sufficient degree of identity between the tested transactions and comparable uncontrolled transactions. The CUP method ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 16 cannot be applied where there is significant dissimilarity between the comparable transactions and it is not feasible to determine an adjustment to eliminate the impact of the said differences on the prices of comparable transactions. 54. In the present case, the Assessee had supplied excess power to UPPCL in UP region at the rate of ₹4.39 per kWh. Thus, the said transaction was accepted by the learned DRP as well as the learned ITAT as an internal uncontrolled transaction. The rate at which such electricity was supplied by the Assessee being ₹4.39 per kWh, was rightly accepted as an ALP. 55. As noted above, the learned ITAT also accepted the rates at which electricity was supplied by the SEBs/power distribution companies to the Assessee in Gujarat and Rajasthan regions as the said rates was considered as an external CUP. 56. Undoubtedly, there is a degree of similarity between the transaction of supply of electricity by SEBs to the Assessee and the supply of electricity by the Assessee's eligible units. However, there is a difference between the transactions being benchmarked, which is supply of electricity by captive units, and the transaction of supply of electricity by distribution companies/corporations. The power distribution companies enjoy a near monopoly status. The tariff charged by such companies are regulated tariffs. However, we accept that there is a sufficient degree of similarity between the said transaction for reasonably determining the ALP by using the CUP method. 57. We also consider it apposite to refer to the recent decision of the Supreme Court in Commissioner of Income Tax v. Jindal Steel and Power Limited7. The principal issue involved in the said decision was the determination of market value of goods and services. In terms of Clause (i) of Explanation to Sub-section (8) of Section 80IA of the Act, the market value in relation to goods and services would mean the price that such goods or services would ordinarily fetch in the open market. In the aforesaid context, the Supreme Court had considered the question of what would constitute an open market in the context of determining the market value of electricity supplied by captive power units of the assessee in that case. In that case, the assessee had entered into an agreement with the SEB of State of Madhya Pradesh to supply surplus electricity at the rate of ₹2.32 per unit. However, the Assessee had (2024) 460 ITR 162 computed the revenue from supply of electricity to its own unit at the rate of ₹3.72 per unit. It was the Assessee's case that the market value of the electricity was ₹3.72 per unit as that was the rate charged by the SEB for supply of electricity to industrial consumers including the Assessee. The learned ITAT had accepted the assessee's stand and had set aside the order passed by the CIT(A) rejecting the assessee's appeal in that regard. The High Court had also rejected the Revenue's appeal by referring to its earlier decision where the question of law had been answered against the Revenue and in favour of the Assessee. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 17 58. The Revenue had approached the Supreme Court assailing the orders passed by the learned ITAT and the High Court. In the aforesaid context, the Supreme Court had held as under: \"23. This brings to the fore as to what do we mean by the expression \"open market\" which is not a defined expression. 24. Black's Law Dictionary, 10th Edition, defines the expression \"open market\" to mean a market in which any buyer or seller may trade and in which prices and product availability are determined by free competition. P. Ramanatha Aiyer's Advanced Law Lexicon has also defined the expression \"open market\" to mean a market in which goods are available to be bought and sold by anyone who cares to. Prices in an open market are determined by the laws of supply and demand. 25. Therefore, the expression \"market value\" in relation to any goods as defined by the Explanation below the proviso to sub-section (8) of section 80 IA would mean the price of such goods determined in an environment of free trade or competition. \"Market value\" is an expression which denotes the price of a good arrived at between a buyer and a seller in the open market i.e., where the transaction takes place in the normal course of trading. Such pricing is unfettered by any control or regulation; rather, it is determined by the economics of demand and supply. 26. Under the electricity regime in force, an industrial consumer could purchase electricity from the State Electricity Board or avail electricity produced by its own captive power generating unit. No other entity could supply electricity to any consumer. A private person could set up a power generating unit having restrictions on the use of power generated and at the same time, the tariff at which the said power plant could supply surplus power to the State Electricity Board was also liable to be determined in accordance with the statutory requirements. In the present case, as the electricity from the State Electricity Board was inadequate to meet power requirements of the industrial units of the assessee, it set up captive power plants to supply electricity to its industrial units. However, the captive power plants of the assessee could sell or supply the surplus electricity (after supplying electricity to its industrial units) to the State Electricity Board only and not to any other authority or person. Therefore, the surplus electricity had to be compulsorily supplied by the assessee to the State Electricity Board and in terms of Sections 43 and 43A of the 1948 Act, a contract was entered into between the assessee and the State Electricity Board for supply of the surplus electricity by the former to the latter. The price for supply of such electricity by the assessee to the State Electricity Board was fixed at Rs. 2.32 per unit as per the contract. This price is, therefore, a contracted price. Further, there was no room or any elbow space for negotiation on the part of the assessee. Under the statutory regime in place, the assessee had no other alternative but to sell or supply the surplus electricity to the State Electricity Board. Being in a dominant position, the State Electricity Board could fix the price to which the assessee really had little or no scope to either oppose or negotiate. Therefore, it is evident that determination of tariff between the assessee and the State Electricity Board cannot be said to be an exercise between a ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 18 buyer and a seller in a competitive environment or in the ordinary course of trade and business i.e., in the open market. Such a price cannot be said to be the price which is determined in the normal course of trade and competition. 27. Another way of looking at the issue is, if the industrial units of the assessee did not have the option of obtaining power from the captive power plants of the assessee, then in that case it would have had to purchase electricity from the State Electricity Board. In such a scenario, the industrial units of the assessee would have had to purchase power from the State Electricity Board at the same rate at which the State Electricity Board supplied to the industrial consumers i.e., Rs. 3.72 per unit. 28. Thus, market value of the power supplied by the assessee to its industrial units should be computed by considering the rate at which the State Electricity Board supplied power to the consumers in the open market and not comparing it with the rate of power when sold to a supplier i.e., sold by the assessee to the State Electricity Board as this was not the rate at which an industrial consumer could have purchased power in the open market. It is clear that the rate at which power was supplied to a supplier could not be the market rate of electricity purchased by a consumer in the open market. On the contrary, the rate at which the State Electricity Board supplied power to the industrial consumers has to be taken as the market value for computing deduction under Section 80 IA of the Act.\" [emphasis added] 59. As is apparent from the above, the Supreme Court had accepted the rates at which electricity was supplied by the SEBs to industrial consumers as being the market value of the said supplies for the purposes of Sub-section (8) of Section 80IA of the Act. 60. In view of the above, the questions of law are answered in favour of the Assessee and against the Revenue.” 16. Thus, by respectfully following the judgement of Hon’ble High Court and Co-ordinate Bench of the Tribunal in the case of assessee itself and also by respectfully following the judgement of Hon’ble Supreme court in the case of Jindal Steel & Power ltd. (supra), we find no infirmity in the order of the Ld. CIT(A) in deleting the adjustment made on account of transfer of power from eligible units to non-eligible units and accordingly, the adjustment of INR 7,96,94,566/- has rightly been deleted by ld. CIT(A) which order is hereby upheld. Ground No.1 raised by the Revenue is thus, dismissed. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 19 17. Ground No. 2 is with regard to the adjustment of INR 98,26,24,597/- made towards sale of steam by eligible units to non eligible units. The TPO has determined the ALP at NIL and accordingly, proposed the reduction of INR 98,26,24,597/- in the deduction claimed under section 80IA of the Act. 18. In first appeal, Ld. CIT(A) has deleted the addition by placing reliance on the judgement of Hon'ble High court in the case of CIT vs Cushman & Wakefield 367 ITR 730 (Del.). 19. Against the said order, the Revenue is in appeal before the Tribunal. 20. Before us, ld. CIT DR for the Revenue stated that the TPO has held that the steam is a by-product and generated during the production activity and its cost has already been absorbed in the manufacturing activity therefore, it has no cost remained. Ld. CIT DR submits that the AO/TPO has not considered the cost of the steam however, the steam is consumed by non-eligible units and therefore, its cost is to be determined on the basis of consumption. Ld. CIT DR thus, requested that the matter may be sent back to the file of AO/TPO for re-working of cost of steam based on consumption. He further, submitted that steam is produced in the process of other production activity and such steam is transferred to power generating units thus the AO should consider this aspect also while determining the cost of stem. He prayed accordingly. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 20 21. On the other hand, Ld. AR for the assessee submitted that steam has been sold by the eligible units to non-eligible units at cost and no markup is done on the said transaction. Ld. AR submitted that before the TPO, the assessee has filed cost sheet of cost of production of steam duly certified by the Chartered Accountant however, the TPO has observed that the assessee has not filed any basis for determination of such cost. Ld.AR further submits that this issue has been settled in favour of the assessee by the Co-ordinate Bench of the Tribunal in assessee’s own case for AY 2014-15 wherein identical adjustment was made by the AO/TPO which was deleted by the Tribunal. Ld. AR further submits that the Department upto AY 2013-14 had accepted benchmarking methodology followed by the assessee however, for the first time, did not accept the methodology of the assessee in AY 2014-15 which as observed above has been deleted by the Hon’ble ITAT which order stood confirmed by the Hon’ble High Court in ITA No.566/2023 dated 02.05.2024 where no substantial questional of law is admitted on this issue. He thus prayed that the order of ld. CIT(A) deserves to be uphold in this count. 22. We have heard the rival contentions and perused the material available on record. From the facts, it is seen that steam is commercial and viable product and its value cannot be taken at NIL. Since the steam is one of the form of power and can be considered as joint product and not as by-product. The assessee has also filed the certificate of Chartered Accountant based on ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 21 which the cost of the steam was worked out as transferred to the non-eligible unit which was disregarded by the AO/TPO without giving any reason. We find that all the aspects were discussed in detail by the Co-ordinate Bench of the Tribunal in assessee’s own case for AY 2014-15 wherein a detailed discussion is made on this issue and thereafter, the Hon’ble Co-ordinate Bench of the Tribunal was of the view that the steam is a valuable source of power and has cost of production. The relevant observations as contained in para 37 to 47 of the order of the Tribunal are under- 37. We have carefully considered the rival contention and perused the orders of the lower authority as well as perused the judicial precedents relied upon by both the sides. The facts shows that assessee has transferred low-pressure steam from eligible business to other business amounting to ₹ 1,028,618,630/–. The rate at which the low-pressure steam is supplied from eligible unit to non eligible unit is at cost. The assessee adopted “other method” as the most appropriate method. The learned transfer pricing officer objected to the same and initially stated that assessee should have adopted the cost plus method for the benchmarking of transfer of steam. However letter on when the assessee contended that if the assessee would have used the cost plus method, the relevant deduction u/s 80 IA would have been much higher. Thereafter, the learned transfer pricing officer changed its stand and directed the assessee to submit a statement of cost of production of steam manufactured during the period 1/4/2013 231/3/2014. Assessee stated that it is submitted original set of corsets of the cost of production of steam transferred certified by the cost accountant. However letter on the learned transfer pricing officer on examining the process of power generation stated that the power plants are not installed for steam production but for power generation and as steam being byproduct do not have any cost. Therefore he rejected the most appropriate method applied by the assessee he further held that activity regarding production of steam shows that steam is produced as a result of burning of fuel in boiler. This steam is used for generation of electricity. Thus the entire cost of electricity absorbs entire cost of production of steam. Thus the resultant cost of excess team is nil. Therefore he made an adjustment of ₹ 1,035,745,275 on this account. The learned dispute resolution panel also agreed with the view of the learned transfer pricing officer. 38. We are not in agreement with the findings of the lower authorities for the simple reason that the Institute of cost and works accountants and issued a guidance note “Guidance Note on Cost Accounting Standard on ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 22 Cost of Utilities (CAS-8))” which provides guidance as to how the cost of utilities such as production of steam can be determined. According to that guidance note in paragraph number 5.1 it is stated that each type of utility shall be treated as a distinct cost object as Under:- “5.1 Each type of utility shall be treated as a distinct cost object. As each utility is a distinct cost object, cost of each utility is to be collected and measured separately. For example power, steam, water, compressed air, oxygen, nitrogen, coke oven gas and the like are distinct utilities, and the cost is collected and measured for each utility separately. The costs are booked to each utility Page 34 of 55 through initial documents such as supplier ‘s bill, if directly identifiable with utility, payroll analysis sheet, stores requisition, etc. A separate cost statement is to be prepared for each utility.” In paragraph number 5.3.2 it has provided as Under:- “5.3.2 In case of Utilities generated for the purpose of inter unit transfers, the distribution cost incurred for such transfers shall be added to the cost of utilities determined as per paragraph 5.3.1. If utilities generated are transferred to inter units of an entity, the cost of distribution of such utilities will be included in the cost of utility as determined under para 5.3.1. It will comprise cost of generating utility and cost of distribution facility. Distribution may be through a pipe line/transmission line. The cost of maintenance of pipe line/ Transmission line for transfer of utility will be added to the cost of utility. In paragraph number 5.3.1 it is provided however cost of utilities are to be determined. 5.3.1 Cost of self generated utilities for own consumption shall comprise direct material cost, direct employee cost, direct expenses and factory overheads. The cost of generating a utility may comprise water, fuel, power, direct expenses ( such as boiler inspection fee) consumable stores, direct employee cost, repair and maintenance, depreciation, inter– utility transfer and factory overhead. For example: Cost of power generation will include cost of fuel such as furnace oil, coal, salaries and wages, consumable stores, repair and maintenance, deprecation and factory overhead. Unit cost is arrived at on the basis of the net aggregate consumption in different departments after adjusting transmission losses. In case of cogeneration (power and steam) where waste heat from TG (Turbine Generation) is recovered in waste heat recovery unit and used for production of steam, due credit should be given to the Power plant and corresponding charge to SGP(Steam Generation Plant). Charging of power to the consuming cost object is generally done at the weighted average of the cost of power purchased , generated and distribution cost at the consuming point. Steam: A separate statement of cost of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 23 steam is prepared indicating the quantity of steam generated, cost of fuel, soft water, power, employee cost for operating staff, sundry supplies, chemical additives, deprecation and other works overhead. Unit cost of steam is arrived at on the basis of units consumed in different departments after adjusting distribution loss. Steam may be of high pressure, low pressure and medium pressure with multiple paths by which the steam pressure is reduced according to the purpose of use. Steam costs are highly dependent on the path that steam follows in the generation and distribution system. Raw water: Raw water is either purchased or obtained from ground wells/canal. The cost of water mainly consists of share of cost of power allocated through inter-utility transfer. The total cost of water should include employee cost, fuel, power, repair and maintenance of tube wells, depreciation, overhead. The total monthly cost of operating this department is divided by the quantity of K Ltr of water pumped during the month to determine the unit cost of water pumped. Cost of Soft Water: Water, if hard, requires treatment. The cost of soft water will include the cost of raw water, chemicals, cost of maintenance of settling tanks, employees cost, depreciation and the like. The cost of demineralised water is also arrived at on the above basis. There is inter–utility transfer cost for a utility. For example water utility may be used in generation of steam and power. Power may be required for pumping water from tubewell. Inter-utility cost is to be determined by the following method: a) repeated distribution method; b) matrix algebra through computer application (a) When Repeated Distribution Method is adopted, the utility costs are repeatedly allocated in the specified percentage until the figures become too small to be significant. Steps to be followed under this method are: I. The proportion at which the cost of a utility is to be distributed to production cost centres and other utilities centre is determined based on usage. II. Cost of first utility is to be apportioned to production cost centres and other utilities in the proportion as determined in step (a) above. III. Similarly cost of other utilities is to be apportioned. IV. This process as stated above is to be continued till the figures remaining undistributed in the utility are too small to be significant. The small amount left with utilities may be distributed to the production cost centres. b) Matrix algebra through computer application: Spread sheet software such as Excel provides facility for inter-division cost ascertainment and reapportionment of inter utility. This application may be used for determining inter-utility transfer cost. Quantitative records of production and distribution should be recorded for each utility to measure the unit cost of a utility. An illustration of steam cost is at Annexure 2. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 24 39. In the annexure – 2 it is given and examples of the total steam cost to be determined in the manner when it is transferred to other units as Under:- “Examples of Steam cost – Transfer to Other units Steam cost per tonne works out to Rs 471.09 as illustrated under Annexure 2. If steam is transferred to other unit, distribution cost will be in addition to the above cost as illustrated below 1 Steam generation cost as 5.3.1 above Rs 471.09 Per MT 2 Distribution cost : Operation & Maintenance cost of distribution line Depreciation Other Total Distribution cost Per MT Rs 1.00 Rs 0.75 Rs 0.75 Rs 2.50 3. Inter Unit transfer cost Rs. 473.59 Cost of a utility determined as per para 5.3.2 plus share of administrative overhead to be charged.” 40. Therefore, from the above analysis it is apparent that the learned revenue authorities have incorrectly held that there is no cost of production of steam. 41. Even otherwise steam is a commercially viable product and it is a form of power and therefore it cannot be said to be produced at nil cost. The assessee has submitted a detailed cost sheet duly certified by the cost accountant following the standards issued by the Institute of cost and works accountant for determining the exact cost of steam, it has also been certified by the chartered accountant and further a chartered engineer certificates is also provided. All these cost statement duly certified by the professionals were rejected by the learned revenue authorities without any basis. 42. Further in the case of the assessee sister concern in case of SRF Ltd the learned dispute resolution panel on the identical facts and circumstances has held that steam has a cost and therefore the arm’slength price of steam cannot be determined at nil. It further held that the value of steam can be expressed in terms of equivalent units of electricity that would have been generated and such value is usually higher than the cost of steam. 43. Further in case of the assessee for assessment year 2015 – 16 the learned CIT – capital has rejected the action of the learned transfer pricing officer of determining the arm’s-length price of steam at nil and upheld the assessee’s approach of benchmarking the transfer price of steam at cost. This order has been accepted by the revenue and no further appeal has been filed. Therefore this issue becomes final with respect to the determination of ALP of transfer of steam at cost by the eligible unit to non eligible unit. 44. Further Honourable Gujarat High court in Principal Commissioner of Income Tax v. Jay Chemical Industries Ltd 2020] 120 taxmann.com 315 (Gujarat)/[2020] 275 Taxman 78 (Gujarat)/[2020] 422 ITR 449 (Gujarat) has held that:- “13. It appears that during the year under consideration, the assessee had claimed deduction of Rs. 32,51,080/- under section ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 25 80IA(4) of the Act. This claim was on account of the operation of the Captive Power Plant. The assessee showed income from sale of Power to the tune of Rs. 1,23,10,500/- and the sale of vapour of Rs. 6,59,77,170/-. The Assessing Officer took the view that \"Vapour\" would not fall within the meaning of \"Power\". The case of the assessee is that \"steam\" is also a form of \"power\". 14. The case of the Revenue is that \"steam\" is only an intermediate raw material for the manufacturing process. In other words, the production of \"steam\" is only a byproduct, which is used by the assessee for its manufacturing activity. 15. In this regard, the CIT (A) recorded the following findings: \"2. The appellant has also claimed deduction under section 80 IA on account of sale of steam to the chemical plant. \"The steam was generated by the power plant in the boiler and part of it was also utilised for the chemical process of the non-eligible unit. The AO has held that the appellant was not entitled to the deduction on account of sale of steam to the power plant. It has been held by her that steam does not fall within the meaning of \"power\". In this reference she has made reliance on the judgment of honourable ITAT Ahmadabad in the case of N R Agrawal Industries Ltd v. DCIT dated 26/07/2013. The appellant on the other hand has submitted that the value of steam should be considered for arriving the profit as the scheme is being gererated for generation of electricity and after utilising the same for electricity generation the balance steam is used for the chemical process. Therefore, it is a byproduct and therefore, the deduction was admissible. On a careful consideration of the facts related to the issue, it is noted that that appellant is generating steam at high-pressure and temperature and the steam is being fed into turbine and the steam which is coming out from turbine is utilised for the chemical process. The details on record to show that the turbine utilised by the appellant for generation of the power is a back pressure turbine. In back pressure turbine the intake is of highpressure steam which is used for generation of power and the exhaust steam is also at certain pressure so that it can utilised for some other purpose. The design of the turbine is done in such a manner so that all energy of the steam is not utilised by the turbine for generation of power but certain part of it is released in the exhaust steam also. Therefore, the design of the turbine used by the appellant is in such a manner that the exhaust steam is at a certain pressure so that it can be utilised for some other work. Accordingly, this steam cannot be consider as a by product but it is intentionally being produced or generated for a specific purpose. Further the intention of the legislature was to provide deduction for generation of electricity and not for generation of steam. The intention is clearly evident from the perusal of the speech of the honourable Finance Minister while introducing the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 26 provisions for deduction in the budget. The use of word 'power' is intended for 'electricity' as the other relevant sections clearly mentioned the word 'electricity'. The honourable Bench of ITAT Ahmadabad while deciding the issue in N.R.Agrawal Industries Private Limited has discussed these aspects in detail and accordingly relying on the judgment it is held that the appellant is not entitled for deduction under section 80 I-A on sale of such steam to its chemical plant. Accordingly, the decision of the AO in this regard is upheld. 3. For the purpose of calculation the quantum of deduction and allocation of expenditure incurred for production of steam the appellant had given certain information-related to the heat value of steam (Enthalpy). The details given by the appellant were also forwarded to the AO and she has also given her comments on the same. In order to arrive at a logical conclusion it would be useful to understand the process involved. The appellant has installed a boiler which generates high-pressure steam at a very high temperature. The steam is first fed in the turbine where part of the heat energy of the steam is utilized in generating the electricity and the balance energy available in the steam coming out from the turbine is utilised in the chemical process. The appellant is incurring expenses such as coal consumption, boiler running, depreciation of boiler and other machinery and the building in which the whole generation plant is housed. The expenditure for the steam, which is utilised in generation of power, and the balance steam which is utilised by the chemical plant can be determined by distributing the same in proportion to the heat value (Enthalpy) of the inlet steam and the outlet steam of the turbine. As per the details available on record the heat value of the inlet steam at 65.5 KG/cm2 is 793 kcal per KG whereas the heat value of the output steam at 3.5 KG/cm2 is 653.7 kcal per KG. The quantity of input and output steam remains the same and only the calorific value of the heat value goes down as part of the energy is utilised for generation of power. Accordingly, the expenses can be apportioned in the ratio of enthalpy of the inlet and output steam. The same is worked out as under:— Total enthalpy of the steam coming out of the boiler 793 kcal per KG The enthalpy of the steam coming out of the turbine 653 kcal per KG The enthalpy utilised by the turbine for generation of electricity 139 kcal per KG Percentage of energy utilised in the generation of electricity 17.66% Total expenses for Boiler 1800000 Generation of steam to be allocated on a percentage basis expenses ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 27 Boiler maint 1 728903 Coal expenses 38733894 Depreciation other than turbine 10522945 Total expenses 52785832 Expenses for steam utilised for 17.66% of 52785832 Generation of electricity 9321977 In addition to above expenses for generation of steam, the expenses of head office of the appellant company which looks after the management or the affairs of-the Company and also the power plant are also to be disallowed on proportionate basis. It is also noted that the appellant has taken loan from financial institutions for installing the power plant. The appellant is also paying huge amount of interest on the loan. Proportionate allocation of the interest expenditure should also be done and added to the cost of generation of steam. Since the details related to the expenses of head office as well as interest expenditures are not available before me, the AO is directed to work out the proportionate allocation of the interest expenditure should also be done and added to the cost of generation of steam. Since the details related to the expenses of head office as well as interest expenditure are not available before me, the AO is directed to work out the proportionate allocation of these expenses by obtaining suitable details from the AO. The details of following expenses are readily available from record:— Expenses for generation of steam 9321977 Depreciation on turbine 1289189 Electricity duty 787872 The AO is also directed to verity the above figures. Accordingly the AO is directed to rework the deduction under section 80I-A claimed by the appellant as indicated in the preceding discussion.\" 16. The Tribunal, concurred with the aforesaid findings recorded by the CIT (A), by taking support of the decision of a Co-ordinate Bench of the ITAT, Mumbai, in the case of West Cost Paper Mills (P.) Ltd. v. CIT, [2014] 52 taxmann.com 268. As regards section 80IA of the Act, strong reliance has been placed on behalf of the Revenue on the decision of this Court in the case of CIT v. Atul Ltd. [2016] 74 taxmann.com 255. In Atul Ltd. (supra), the assessee had established a new power plant by expending a sum of Rs. 14.62 Crore and claimed deduction under section 80IA. The Assessing Officer upon examination of such claim, arrived at the conclusion that the production of power would require boiler and also a turbine since the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 28 boiler would manufacture steam which would be a raw material for the production of power with the aid of turbine and such a plant would be a new industrial undertaking capable of generating electricity. The case of the assessee was that in the existing power plant the assessee had excess steam production capacity which was to be utilised by the turbine installed in the new plant. The Assessing Officer ultimately rejected the case of the assessee on the ground that the turbine should be treated as an independent power generating unit and thereby disallowed the claim of deduction under section 80IA of the Act. 17. The assessee carried the matter in appeal. The CIT (A) held that no industrial undertaking would come into existence within the meaning of the provisions contained in section 80IA of the Act by transferring the boiler or by installing new machinery for the purpose of generation of the power. The appeal came to be dismissed and the assessee carried the matter before the Tribunal. The Tribunal dismissed the appeal. 18. It appears that the assessee preferred an application for rectification before the Tribunal contending that after the judgment was delivered by the Tribunal, the High Court, in the case of Gujarat Alkalines and Chemicals Ltd. v. CIT [2013] 350 ITR 94/[2012] 208 Taxman 31/20 taxmann.com 764 (Guj.) has delivered a judgment which would have a bearing on the issue decided by the Tribunal. The said application was opposed by the Revenue. However, the Tribunal allowed the application for rectification and recalled its earlier judgment. The Revenue came before this Court in appeal. This Court took the view while allowing the appeal of the Revenue that the claim of the assessee for deduction under section 80IA of the Act was not tenable in law. 19. This Court took notice of the fact that the assessee had installed turbine for power generation which relied on the excess steam production capacity of the plant. This Court ultimately took the view that the installation of turbine for power generation could be said to setting up of a new industrial unit and therefore, the assessee would not be entitled for deduction of sum under section 80IA of the Act. 20. In our view, the facts in the case of Atul Ltd. (supra) are quite different and the ratio, as propounded in the same, will have no applicability to the case on hand, more particularly, the question No. 3 with which we are dealing with. 21. It is difficult for us to take the view as suggested by the learned standing counsel appearing for the Revenue that \"steam\" would not amount to power. The word \"Power\" used in Section 80IA(4) has not been defined under the Income-tax Act. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 29 22. The word \"Power\" should be understood in common parlance as \"Energy\". \"Energy\" can be in any form being mechanical, electricity, wind or thermal. In such circumstances, the \"steam\" produced by the assessee can be termed as power and would qualify for the benefits available under section 80IA(4) of the Act.” 45. Further Hon’ble Supreme Court in CIT v. Tanfac Industries Ltd., SLP (C) No. 18537 of 2009 [319 ITR 8 (st)] wherein while applying section 80-IA of the IT Act, the Hon’ble Supreme Court took a view that the value of steam used for captive consumption by the assessee was entitled to be deducted under section 80-IA of the Act. 46. Therefore it is apparent that i. steam is a valuable sources of power ii. it has cost of production, iii. There are methods and Costing Standards for determining the cost of production of steam. iv. Assessee has transferred the steam from eligible units to noneligible units at cost only. v. Such cost is certified by the Cost Accountant, Chartered Accountant, and Chartered Engineers. vi. It cannot have Nil cost 47. In view of above facts, we are of the view that ld Revenue authorities erred in holding that the steam does not have any cost and therefore steam transferred by assessee’s eligible units to non eligible units at cost, which is determined by Cost accountants and Other professional, has the Arms length price of Rs Nil instead of cost of Rs 103745275/- . Therefore we allow ground number 3 of the appeal and direct the learned transfer-pricing officer to delete the addition of ₹ 1,035,745,275 which was made determining the arm’s-length price of transfer of steam from eligible unit to non-eligible unit by considering the cost of production of the steam at Rs. Nil.” 23. This order of the Tribunal was challenged by the Revenue before the Hon’ble High court in ITA No.566/2023 wherein no substantial question of law was admitted on this issue by the hon’ble high court. The relevant observations as contained in ITA No.566/2023 and CN Application No. 51969/2023 while admitting the substantial question of law in para 5 of the Hon’ble High court is as follows: ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 30 5. “Question C pertains to the transfer of steam from the eligible unit to the non-eligible unit of the assessee. The appellant seeks to contend that since steam was a by-product of the business and would have been included in the cost of power generation, it should not have been taken into account. We, however, find that the aforesaid issue and aspect was concerned with the transfer of steam to the non-eligible unit and for the purposes of which the assessee would have been justified in relying on the cost of production. We therefore, are of the opinion that Question C raises no substantial issue.” 24. In view of the above facts and by respectfully following the decision of Co-ordinate Bench and further looking to the fact that such order attained finality since the Hon’ble High Court has not admitted any substantial question of law on this issue. Thus the price charged for transfer of steam from eligible unit on eligible unit at cost of production for the purpose of claiming deduction u/s 80IA is hereby upheld. Ground No. 2 of the Revenue is dismissed. 25. The additional grounds of Revenue are in respect to the addition of INR 1.52 crores made by invoking the provision of section 14A read with Rule 8D of Income Tax Rules, 1962 (“Rules”). 26. Brief facts leading to this issue are that AO observed that the assessee itself, has made disallowance of INR 63,50,558/- in the return of income in terms of Rule 8D(2)(iii) of the Income Tax Rules, 1962 (the Rules) on account of administrative expenses at the rate of 0.5% of average value of investments. While computing such disallowance, the company has considered only those investments which yielded exempt income. The AO by observing that Revenue has not accepted the claim of the assessee in preceding years. The ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 31 AO by applying the provision of Rule 8D(2)(ii) of the Rules made proportionate disallowances which comes to INR 1.52 crores. 27. In first appeal, Ld.CIT(A) by following the judgement in assessee’s own case for AY 2008-09 of Hon’ble Jurisdictional High Court and further, Co-ordinate Bench of Tribunal in AY 2010-11 has deleted the disallowance made. 28. Before us, Ld. CIT DR supported the order of AO and submits that though the assessee has made disallowance under Rule 8D(2)(iii) of the Rules however, since the company had paid interest on the funds borrowed therefore, the proportionate disallowance under Rule 8D(2)(ii) should have been made and therefore, he requested for the restoration of the addition made by the AO. 29. On the other hand, Ld. AR for the assessee submits that the assessee has suo-moto made the addition on account of administrative expenses as per Rule 8D(2)(iii) and no expenses were incurred excepts such administrative expenses therefore, no further disallowance was required to be made. Ld. AR further submits that the AO by observing that the Revenue has not accepted the order of earlier years, has made the disallowances however, in assessee’s own case for AY 2008-09, the Hon’ble High Court has deleted the disallowance and further in AY 2014-15, the disallowance made by the AO was deleted by the Co-ordinate Bench of Tribunal against which the Revenue had preferred the appeal before Hon’ble High ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 32 Court where Hon’ble High Court has not admitted substantial question of law on this issue. 29.1. On merits, the assessee submits that the AO has taken the average value of investment on INR 127.01 crores as against which the assessee is having own reserves and surplus of INR 1673.56 crores as on 31.03.2014 and of INR 1857.06 crores as on 31.03.2015 which is much more than the average value of investment and therefore, no disallowance is required to be made. With respect to the adjustment of the disallowances in the book profit, Ld.AR relied upon the judgement of Special Bench of ITAT, Delhi Benches in the case of Vireet Investment Private limited [2017] 82 taxmann.com 415 (Delhi-Trib.) and submits that section 115JB is a separate code and has to be interpreted in its literal sense and therefore, no adjustment should be made on account of disallowance under section 14A of the Act in the book profits. He thus prayed for the confirmation of the order of Ld. CIT(A) in deleting the disallowance under section 14A and further requesting that the same should not be included in the book profits computed u/s 115JB for the purpose of MAT. 30. We have heard the rival contentions and perused the material available on record. In this case, the assessee has already made the disallowances of INR 63,50,558/- on account of administrative expenses @ 0.5% of average value of investments as provided under rule 8D(2)(iii) of the Rules. The AO without proving any nexus between the borrowed funds and investment made which has ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 33 yielded exempt income, computed further disallowance of INR 1.52 crores out of interest payment made on the borrowed funds. The assessee has demonstrated that it had sufficient interest free funds in the shape of Capital and Reserves and therefore, no disallowance should be made under section 14A read with Rule 8D(2)(ii) of the Rules. The Hon’ble Supreme Court in the case of South Indian Bank limited reported in TS-849-SC-2021 has also expressed this view. Further, the Co-ordinate Bench of Tribunal had consistently been taken the view that where interest free funds are more than the value of investments which yielded exempt income, no disallowance should be made u/s 14A read with Rule 8D(2) of the Rules. Thus, by following the judgement of Hon’ble Supreme Court and various Hon’ble High Courts, we find no infirmity in the order of Ld. CIT(A) in deleting the disallowance made u/s 14A by the AO more particularly when this issue has already settled in assessee’s own case wherein AY 2014-15 under identical circumstances, the addition/disallowance made was deleted by the Co-ordinate Bench of ITAT and on further appeal by revenue, the Hon’ble Jurisdictional High Court has not admitted substantial question of law on this issue. With regard to the inclusion of book profit under section 115 JB, we followed the judgement of Special Bench in the case of Virit Investment (supra) where it is held that no addition could be made on account of disallowance under section 14A to the book profit. This being so, we do not find any force in the arguments of Ld. CIT DR accordingly, the additional grounds of appeal taken by the Revenue are dismissed. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 34 31. In the result, the appeal filed by the Revenue is dismissed. ITA No.704/Del/2021 (AY 2016-17) [Assessee’s appeal] 32. This appeal has been filed by the assessee against the assessment order dt. 22.04.2021 passed u/s 143(3) r.w.s.144C(13) r.w.s. 144B of the Act after giving effect to the order of Hon’ble DRP dated 03.03.2021 pertaining to assessment year 2016-17. 33. Since the grounds of appeal taken by the assessee in captioned appeal are very extensive and argumentative thus, the assessee was directed to file the concise grounds of appeal which are filed by the assessee vide letter dated 24.05.2024. The concise grounds of appeal reads as under- 1. “That the Learned Assessing Officer (ld. AO) has erred in law and on facts, and in the circumstances of the appellant's case in making an addition/adjustment of Rs.1,04,88,00,979/- on account of transfer pricing issues and making an addition/disallowance of Rs.54,14,870 /- on account of non-transfer pricing issues pursuant to the directions of learned Dispute Resolution Panel-I, New Delhi (ld. DRP) dated 03.03.2021. GROUNDS OF APPEAL IN RESPECT OF TRANSFER PRICING ADJUSTMENTS Transfer of Steam - Adjustment of Rs.104,88,00,979/- 2. That the Ld. DRP/TPO and consequently the Id. AO have erred in law and facts and in circumstances of the case in making an adjustment of Rs.1,04,88,00,979/- in respect of specified domestic transaction of transfer of steam by eligible power units to non-eligible units [at its cost of production] by treating its arm's length price /cost of production at NIL on wholly erroneous, superficial and arbitrary grounds including as follows:- 2.1 By not appreciating that steam being a commercially valuable product has to be transferred to a related party at an arm's length price and therefore, whether it has a cost or not, is irrelevant for purpose of determination of its ALP under transfer pricing legislation. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 35 2.2 By not appreciating the business model of the assessee's eligible power plant which is based on the co-generation model. 2.3 By observing that the primary objective of the assessee in generation of power and steam as such is a by-product. 3. The Ld. DRP/TPO and consequently the ld. AO have grossly erred in not considering the fact that the steam has been sold to a third party at substantially higher price than its cost of production in subsequent years (based on the additional evidence in form of invoices of steam sales). 4. The Ld. DRP/TPO and consequently the Id. AO have grossly erred in not following rule of consistency by disregarding the same methodology followed by appellant since financial year 2005-06 which has also been approved by the ld. CIT(A) in assessee's own case for A.Y. 2015-16. 5. Without prejudice to above grounds, the Id. TPO DRP/TPO and consequently the Id. AO have erred by not limiting the transfer pricing adjustment to the extent of deduction u/s 80-IA of the Act claimed by respective eligible power units of the assessee and thereby making an excess disallowance to the tune of Rs.40,65,76,101/-. GROUNDS OF OBJECTIONS AGAINST CORPORATE TAX DISALLOWANCES Additional Disallowance u/s 14A of Rs.4,14,870/- 6. The Ld. DRP/AO has erred in law and in facts and in the circumstances of the assessee by enhancing the disallowance u/s 14A of the Act, to the tune of Rs.54,14,870/- by attributing the interest expenses incurred by the assessee to earning of exempt income invoking rule 8D(2)(ii) which is wholly untenable in law and based on conjectures and surmises. 7. Without prejudice, Ld. AO has grossly erred in law and on facts of the case in computing the additional disallowance u/s 14A r.w.r. 8D(2)(ii) by including the investments (investments in foreign subsidiaries, NSC) income from which is taxable under the Act. 8. The Ld. DRP/AO has erred in making above additional disallowance u/s 14A of the Act disregarding the Hon'ble Jurisdictional High Court order in assessee's own case for AY 2008-09, Hon'ble ITAT's orders for AY 2009- 10 and AY 2010-11 and Id. CIT(A)'s order for AY 2015-16. 9. That the Id. AO has grossly erred in law and on facts and circumstances of the case in not following the directions of the Id. DRP by not deleting the aforesaid disallowance as the revenue has not yet filed any appeal /petition against the judgment of Hon'ble High Court of Delhi in assessee case for A.Y. 2008-09 till date [as per the information available and to the best of knowledge of the assessee]. Incorrect computation book profits u/s 115JB of the Act ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 36 10. The Ld. DRP/AO has grossly erred in law and in facts and in the circumstances of case by making an addition of 54,14,870/- to the book profits u/s 115JB on account of enhanced disallowance u/s 14A of the Act. Claim made during the proceedings before the Id. DRP 11. That the Ld. DRP and consequently Id. AO have grossly erred in law and on the facts & circumstances of the assessee's case in not allowing assessee's claim raised before Id. DRP for allowing deduction of 'Education Cess' amounting to 133,85,194/- u/s 37 of the Act paid or payable under normal provision of the Act. Assessment u/s 143(3) void-ab-initio: 12. Without prejudice, the Id. AO, Id. Transfer Pricing Officer (TPO) and subsequently Id. DRP have grossly erred in law and in facts and circumstances of the case in not appreciating that assessment proceedings u/s 143(3) and transfer pricing proceedings u/s 92CA of the Act are vitiated being void-ab-initio as no valid notice u/s 143(2) of the Act was served on the assessee within the statutory time limit prescribed under that sub-section (viz. 30th September, 2017). 13. Without prejudice to above, the Id. AO has grossly erred in law and on facts and circumstances of the case in not following the directions of the Id. DRP (at Page no.11 of Directions) by not 'elaborating and incorporating the details of issue and service of notice u/s 143(2) of the Act in the final assessment order as directed by the Id. DRP. The final assessment order, which is in gross non-compliance of the binding directions of Id. DRP, is thus void and liable to be quashed. Other grounds 14. That the penalty proceedings initiated u/s 271(1)(c) are on wholly illegal and untenable grounds since there was no concealment of any income nor submission of inaccurate particulars of income, nor any other default according to law by the assessee. 15. That the Ld. A.O has erred in law in charging interest u/s 234C of the Act on wholly illegal and untenable grounds.” 34. Ground No. 1 is general in nature needs no separate adjudication. 35. Ground Nos. 2 to 5 are in relation to the adjustment made by AO/TPO of INR 1,04,88,00,979/- in respect of specified domestic ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 37 transaction of transfer of steam by eligible units to non- eligible units wherein the assessee has taken the transfer price at cost however, the TPO/AO has treated the ALP/cost of production at NIL which has resulted into the reduction in the deduction claimed under section 80IA of the Act. 36. We have heard the rival contentions and perused the material available on record. Similar issues has come up for consideration before us in Revenue’s appeal for AY 2015-16 in ITA No.927/Del/2022 wherein by following the judgement of Hon’ble Co-ordinate Bench of the Tribunal in assessee’s own case for AY 2014-15 wherein the Co-ordinate Bench has held that the steam is not a by-product but a joint product and has some value therefore, cost of production cannot be taken as NIL and thus, the deduction claimed under section 80 IA on the transfer price charged by the eligible units to non-eligible units was held as allowable. This order of Co-ordinate Bench in AY 2014-15 was got confirmed by the Hon’ble Jurisdictional High court wherein Hon’ble High Court vide order dated 02.05.2024 in ITA No. 566/2023 has held that it is a pure question of fact and no substantial question of law is involved in this issue. Accordingly, the Hon’ble High Court has not admitted the Revenue’s appeal against such observations of the Co-ordinate Bench of the Tribunal. In view of these facts, the issue of allowability of deduction u/s 80IA of the Act on transfer of steam from eligible unit to non-eligible unit stood settled in assessee’s own case and by following same observations in Revenue’s appeal for AY ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 38 2015-16 in ITA No.927/Del/2022, was dismissed by us herein above. 37. In view of these facts and by following the findings made in Revenue’s appeal for AY 2015-16 in ITA No.927/Del/2022, Ground Nos.2 to 5 of the assessee are allowed. 38. During the course of hearing vide application dated 18.05.2023, the assessee has taken additional grounds of appeal No.32 and 33 wherein the assessee had requested for re- determination of the ALP of steam from eligible unit at INR 4,15,89,33,008/- as against INR 1,09,61,42,586/- and further requested for consequential enhancement in the deduction of claim under section 80IA of the Act. The additional grounds of appeal so raised as under- \"32. “That the Hon'ble ITAT may be pleased to re-determine the arm's length price of steam transferred from eligible unit to non eligible units at 4.15.89.33.008/- [instead at its cost of production at 1,09,61,42,586/-] which is computed by multiplying the equivalent quantity of such steam in terms of unit of electricity (KwH) as certified by the Chartered Engineer with the ALP rate of electricity\": and \"33. That the Hon'ble ITAT may be pleased to allow the consequential enhanced deduction u/s 80-IA of the Act that would be available to the assessee by considering the equivalent value of steam as determined above in ground no. 32.\" 39. In support of the additional ground, Ld. AR for the assessee submitted that the assessee has valued the steam transfer from its eligible units to non-eligible units at its cost of production without any markup on the same. Based on the judgement in case of group companies and also the other companies as delivered by the Co- ordinate Bench of ITAT, the assessee has made further claim of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 39 deduction where the value of steam is computed by multiplying the quantity of steam that can be expressed in terms of equivalent units of electricity in KWH with the rate of electricity which was upheld /approved. In support the same assessee also filed a certificate of Chartered Engineer. The assessee has also filed the additional evidences under rule 29 of the Rules which contained the following- (i) detailed working of enhancement deduction under section 80 IA of the act; (ii) Engineer Certificate computing the equivalent value of steam; (iii) supplementary form 10CCB alongwith power action of eligible plants; (iv) addendum to form 3CEB for AY 2016-17; (v) supplementary transfer pricing study report; and (vi) directions dated 26.03.2021 of Hon’ble DRP-2, Delhi in assessee group case namely M/s. SRF Limited for AY 2016-17. 40. The assessee further stated the reason for filing the additional evidences which is as under- Reasons for filing the additional evidence:- “Before presenting the said additional evidence before your honour the assessee wishes to explain the reasons due to which the assessee was unable to submit the same during the proceedings before the Ld. TPO. In this regard, it is hereby submitted that during the course of litigation before various appellate authorities/income tax authorities of earlier assessment years, the assessee has come across the ruling of Hon'ble DRP-2, New Delhi dated 26.03.2021 in case of its group's concern case namely SRF Limited for the AY 2016-17 wherein the Hon'ble DRP-2 have dealt with and adjudicated the identical issue in the nature of transfer of steam from eligible unit to its non-eligible unit. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 40 In the said directions, the Hon'ble DRP-2, New Delhi has adjudicated the matter in the favor of the said appellant and vide its directions dated 26.03.2021 have expounded various principles to determine the Arm's Length Price with respect to transfer of Steam. In the said directions, the Hon'ble DRP-2, New Delhi strongly relied on the certificates issued by the Chartered Engineer wherein the chartered engineer has chartered engineer has computed the equivalent value of steam actually produced transferred by the eligible unit of the assessee to the non-eligible units and accordingly, directed the Ld. AO that no adjustment is required in the appellant's case. As stated above, the said directions of the Hon'ble DRP-2, New Delhi has been issued on 26.03.2021, therefore it is not possible for the assessee to submit the said chartered engineer certificates obtained in line with the said directions, during the Income Tax proceedings for the AY 2016-17 before the Ld. TPO. Further, the Hon'ble DRP pronounced its directions vide order dated 03.03.2021, therefore such claim of enhanced deduction u/s 80-IA could not be raised before the Hon'ble DRP. Now, In line with the aforesaid directions, the assessee has obtained certificates from the chartered engineer for the eligible units (Refer Annexure II) wherein the chartered engineer has computed the equivalent value of steam actually produced transferred by the eligible unit of the assessee to the non-eligible units and wishes to submit before your honour as additional evidence. Therefore, it is prayed before your honour to kindly accept the same as per Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 while adjudicating the matter.” 41. The assessee further placed reliance on the judgement of Hon’ble jurisdictional High Court in the case of CIT-IV vs Text Hundred India Private Limited in ITA Nos. 2077, 2061 & 2065/2010 dated 14.01.2011 wherein Hon’ble High court has held as under- 13. “The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the parties to the appeal and it need not to be a suo motto action of the Tribunal. The aforesaid rule is made enabling the Tribunal to admit the additional evidence in its discretion if the Tribunal holds the view that such additional evidence would be necessary to do substantial justice in the matter. It is well settled that the procedure is handmade of justice and justice should not be allowed to be ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 41 choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect.” 42. Ld.AR further filed a written submissions wherein Ld. AR has placed reliance on various judicial pronouncements on the admission of additional evidences which is as under- Legal submission on admission of additional evidences “We would also like to respectfully submit with regard to the admission of additional evidence as under: Rule-29, Income-tax (Appellate Tribunal) Rules, 1963: Production of additional evidence before the Tribunal \"29. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.\" As discussed above, the assessee realized to claim higher amount of deduction only after the judgments supporting such methodology came to knowledge of the assessee, thus, assessee could not submit the said evidences at the time of proceedings before the Id. AO. Hence, it is prayed before your honour to kindly admit the same now in order to impart complete justice to the assessee to advance the substantial cause. In this regard, reliance is placed on the observation made by the Hon'ble Supreme Court, which defines the term \"for any other substantial cause\", in case of K. Venkatramaiah v. Α. Seetharama Reddy, AIR 1963 SC 1526, that under rule 27(1) of Order 41 of the Code of Civil Procedure, \"That the appellate court has power to allow additional evidence not only if it requires such evidence \"to enable it to pronounce judgment\" but also for \"any other substantial cause.\" There may be cases where even though the court finds that it is able to pronounce judgment on the state of the record as it is and so it cannot strictly say that it requires additional evidence \"to enable it to pronounce judgment,\" it still considers that in the interest of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 42 justice something which remains obscure should be filled up so that it can pronounce its judgment in a more satisfactory manner. Such a case will be one for allowing additional evidence \"for any other substantial cause\".\" In case of Arjan Singh v. Kartar Singh, AIR 1951 SC 193, wherein the Hon'ble SC remarked as \"The legitimate occasion for the application of Order 41, rule 27 is when on examining the evidence as it stands, some inherent lacuna or defect becomes apparent, not where a discovery is made, outside the court of fresh evidence and the application is made to impart it. The true test, therefore, is whether the Appellate Court is able to pronounce judgment on the materials before it without taking into consideration the additional evidence sought to be adduced.\" The Hon'ble Delhi High Court in case of Text Hundred India Pvt. Ltd. [TS- 13-HC-2011(DEL)] places reliance on the said judgements of Hon'ble Supreme Court (supra) and observed that: \"Para 12. The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the parties to the appeal and it need not to be a suo motto action of the Tribunal. The aforesaid rule is made enabling the Tribunal to admit the additional evidence in its discretion if the Tribunal holds the view that such additional evidence would be necessary to do substantial justice in the matter. It is well settled that the procedure is handmade of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect.\" 43. Ld.AR also relied upon various judicial pronouncements for admission of additional claim of deduction which include the judgement of Hon’ble Delhi High Court in the case of CIT vs Sam Global Securities Ltd. [2014] 360 ITR 682 (Del.) and in the case of CIT vs Jai Parabolic Springs Ltd. 306 ITR 42 (Del.). Ld. AR thus submits that additional claim of deduction u/s 80IA of the Act account of transfer of steam has taken though additional grounds ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 43 of appeal be admitted and additional evidences filed in support of the additional claim may deserves to be admitted in the interest of justice. 44. On the other hand, Ld. CIT DR seriously objected the admission of additional grounds as well as admission of additional evidences by making a detailed submissions which reads as under- 1. “With regard to above mentioned appeal, the assessee has raised two additional grounds of appeal (GOA 32 and 33) vide its submission dated19.05.2023, which are reproduced below as under :- \"32. That the Hon'ble ITAT may be pleased to re-determine the arm's length price of steam transferred from eligible unit to non - eligible units at Rs. 4,15,89,33,008/- [instead at its cost of production at 1,09,61,42,586/-) which is computed by multiplying the equivalent quantity of such steam in terms of unit of electricity (KWH) as certified by the Chartered Engineer with the ALP rate of electricity\"; 33. That the Hon'ble ITAT may be pleased to allow the consequential enhanced deduction u/s 80-IA of the Act that would be available to the assessee by considering the equivalent value of steam as determined above in ground no. 32.\" 2. Further, in order to re-determine the arm's length value of steam and consequently to enhance the deduction under section 80 IA of the Act, the assessee has also made application for submission of following additional evidences under Rule 29 of ITAT: a) Detailed working of enhanced deduction u/s 80-IA of the Act. b) Chartered engineer's certificate computing the equivalent value of steam. c) Supplementary Form 10CCBs along with power accounts of all the eligible plants. d) Addendum to Form 3CEB for the AY 2016-17. e) Supplementary Transfer Pricing Study. f) Directions dated 26.03.2021 of Hon'ble DRP-2, New Delhi in assessee group's concern case namely SRF Limited for the AY 2016-17. 3. At the outset, objection is raised for admission of above mentioned additional grounds of appeal and the additional evidences for the detailed reasons mentioned below: (i) The additional grounds filed by the assessee are not in respect of a question of law. Rather, the same pertains to an issue that is entirely factual in nature. The adjudication of the said grounds will require ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 44 examination and discovery of new facts, which are not on the records of the Assessing Officer. (ii) On perusal of the additional grounds raised and the additional evidence sought to be admitted, it is noted that the assessee has changed the basis on which the value of steam transferred from the eligible unit to the non- eligible unit is to be determined. This is entirely a new issue, that was not raised before the Assessing Officer or the Hon'ble DRP earlier. This issue is now sought to be raised before the Hon'ble Tribunal for the first time. This issue is entirely factual in nature and facts required for determination of such issue are not on the file of the lower authorities. In support of its changed stand, the assessee is now seeking admission of additional documents such as Chartered engineer's certificate, supplementary T.P.study, supplementary form 10CCB, addendum to Form 3CEB. Etc. These documents were never filed/produced before the lower authorities. Thus, the assessee is trying to make an entirely new case which was not before the lower authorities. In my respectful submission, as per the law, the assessee cannot raise an entirely new issue or make out an entirely new case, which was not before the lower authorities, for the first time before the Hon'ble Tribunal, when the facts required for determination of such issue are not available on the file of the lower authorities i.e. Assessing Officer or the Hon'ble DRP. (iii) If an entirely new set of evidences are admitted by the Hon'ble Tribunal at this stage, and additional grounds of appeal are also admitted to determine an issue on the basis of such new evidences for the first time before the Tribunal, it would be akin to carrying out a fresh assessment in the case for determination of a new issue. In my respectful submission, it would be contrary to the provisions of the law. (iv) It is pertinent to highlight here that enhanced claim of deduction under section 801A is not being made by the assessee on account of some error in computation of deduction in the return of income filed or documents filed before the Assessing Officer. Rather, the assessee is trying to change entire basis of determination of value of steam by relying on fresh sets of documents and evidences. Therefore, it cannot be considered as mere enhancement of the claim of deduction made before the Assessing Officer. Rather, it will qualify as making a new claim relying on new evidences produced before Tribunal. (v) Even though enhanced claim is in respect of transaction of transfer of steam from eligible unit to non-eligible unit which was before the Assessing officer, since whole basis of determination of value of such steam is sought to be changed, it would qualify as a new issue being raised for the first time before Hon'ble Tribunal. Materially different method of determination of value of steam by taking help of entirely new set of documentary evidences would tantamount to raising a new issue. (vi) As per ITAT Rule 29, none of the parties to the appeal is entitled to admission of additional evidence as a matter of right. However, Hon'ble ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 45 Tribunal has the authority to allow production of additional evidence for the reasons mentioned in ITAT Rule 29. It is respectfully submitted that such discretion vested with Hon'ble Tribunal is required to be exercised to bring on record those relevant documents, which are necessary for judicious adjudication of the issues arising from proceedings before the lower authorities. In other words, such discretion should not be allowed to be used to enable a party to the dispute-i.e., the assessee in this case to create an entirely new factual issue before the Hon'ble Tribunal for the first time. (vii) The assessee has contended that similar issue of redetermination of ALP of steam and consequent enhancement of deduction under section 801A has been restored to the Assessing officer by the Hon'ble Tribunal for verifying the claim of the assessee and deciding the issue in the case of its group concern, i.e., DCM Shriram Industries Ltd.(combined order dated 15.03.2023 in ITA No.1000/Del/2022 for AY 17-18 and ITA No. 539/Del/2021 for AY 16-17). In this regard, it is noted that in said order of Hon'ble Tribunal, there is no discussion with regard to any objection raised to admission of additional ground and additional evidences and disposal of such objection by the Hon'ble Bench. Thus, said order is silent on this aspect. Hence, the finding of Hon'ble Tribunal in the said case can not be any help to the assessee in light of specific objection being raised to admission of additional grounds of appeal and additional evidences by the undersigned. (viii) In view of the above discussion, it is respectfully submitted that both the additional evidence and the additional ground of appeal sought to be admitted by the assessee in this case may kindly be rejected in light of the discussion made above. (ix) In this regard, reliance is placed upon the judgment of the Hon'ble Allahabad High Court in the case of Sarika Jain [84 taxmann.com 64], where the Hon'ble High Court while explaining the power of the ITAT under section 254 of the I.T.Act has held as under: \"16. In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an addition can be made under Section 69-A of the Act. 17. In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that \"it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 46 in adding the aforesaid amount in the income of the appellant- assessee under Section 68 of the Act. 18. In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act. the entire order of the Tribunal stand vitiated in law.\" (Emphasis supplied) In the instant case too, the issue based on which enhanced claim of deduction is being sought by the assessee was not subject matter of dispute all through before ITAT. Hence ration of above judgment of Hon'ble High Court is squarely applicable to the case of assessee. 4. In addition to the above, it is submitted that it is a fact that the assessee had not claimed the so-called enhanced deduction in the return of income. The moot question is as to whether the assessee entitled to claim any new deduction u/s Chapter-VIA without claiming the same in the original return of income filed u/s 139(1) of the IT Act. The relevant provisions of Income Tax Act with regard to claim of deductions u/s Chapter VIA are discussed below. 4.1 Whether the person can claim 801A deductions by filing letter during assessment proceedings? The provisions of 'Income Tax Act' for claiming deductions in chapter VIA: Sub section 5 of section 80A provides that no deductions under chapter VIA shall be allowed, if not claimed in the return of income. For ready reference, the provision of section 80A (5) are reproduced below:- \"5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 108 or section 10BA or under any provision of this Chapter under the heading \"C.-Deductions in respect of certain incomes\", no deduction shall be allowed to him thereunder.\" Further the section 80AC of I.T. Act provides that no deductions shall be allowed unless the return is filed or before the due date mentioned in the section 139(1) of the IT Act. For ready reference, the provision of section 80AC are reproduced below:- 80AC. Deduction not to be allowed unless return furnished.-Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after- (I) The 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-18 or section 80-IC or section 80-ID or section 80-IE; (ii) The 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading \"C.-Deductions in respect of certain incomes\", ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 47 no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.\" Thus both these sections i.e. section 80A (5) and section 80AC lays down the primary conditions for claiming deductions and the conjoint reading of both the sections bring out the following pre conditions for claiming deductions under chapter VIA. (1) No deductions u/s 801A/80 IB/80 IC etc. shall be allowed if the deductions are not claimed in the return of income. (2) The return of income must be filed on or before the due date mentioned in the section 139(1) of the IT Act. Thus, the I.T. Act clearly provides that both the above conditions are to be satisfied as these are primary conditions for claiming deductions under chapter VIA. If the assessee satisfies these primary conditions, only then the AO verifies the eligibility of the assessee for claiming these deductions. From the facts of the case, it is crystal clear that the assessee company has not claimed such enhanced deductions u/s 801A for transfer of steam in the original return of income. The assessee is now claiming the enhanced deduction u/s 801A based on some Chartered engineer's certificate. Thus, as the assessee failed to claim the so-called enhanced deductions u/s 801A in the original return of income, it is clearly hit by the provision of section 80A(5) r.w.s. 80AC of the IT Act and accordingly these deductions under chapter VIA cannot be allowed to the assessee. 4.2 Reliance is placed on the decision of Hon'ble Rajkot Tribunal in the case of M/S Patel Brass Works Pvt. Ltd. Vs. ACIT, Circle 5 Rajkot in ITA No. 60/RJT/2020. The facts of the case are similar, as in that case also, the assessee had made a claim under section 80 IA during the assessment stage. The AO and the CIT appeal had rejected the claim by relying on Goetze India judgement and also relying on the provisions of section 80 A(5) and 80 IA (7) and because form no. 10 CCB was not furnished along with return of income. The assessee in that case had also relied on the decision of Hon'ble Apex Court in the case of Jute Corp. Of India for admission of the claim, however, the Hon'ble Tribunal while relying on section 80 A(5) of the Act and the decision of Hon'ble Gujarat High Court in the case of Rachna infrastructure Pvt. Ltd. (2022) 138 taxmann.com 416 (Gujarat) has rejected the claim of the assessee. Reliance is also placed on the recent decision of the Hon'ble Coordinate Pune Bench in the case of Income Tax Officer vs. Jagtap Patil Promoters and Builders in 147 taxmann.com 199 (2023) In this case, the Hon'ble Tribunal after analyzing several case laws and the provisions of the Income Tax Act, has clearly held that assessee is not eligible for deduction u/s 801B(10) as it had not claimed such deductions in the original return of income. The Ratio of the above cases squarely applies in the instant case also. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 48 4.3 Whether the assessee can claim deductions in chapter VIA by filing letter/report of chartered engineer during assessment proceedings? As per section 139(5) of the IT Act, a person can revise his return of income if he discovers any omission or wrong statement in the original return of income. Thus, revised return can be filed only when there is an omission or any wrong statement. Revised return cannot be transformed into a return u/s 139(1) of the IT Act, meaning thereby, that even by filing the revised return of income, the assessee cannot be permitted to substitute the original return of income filed u/s 139(1) of the IT Act. Thus a person cannot make any new claim under the revised return of income on the ground that he has forgotten to file a claim in the original return of income filed u/s 139(1) of the IT Act. Thus, by the conjoint reading of section 80A(5), 80AC and section 139(1) and 139(5) of the IT Act, it is clear that the assessee cannot file a fresh claim of chapter VIA deductions, by filing the revised return of income. This proposition of claiming exemptions/benefits u/s 10(8) even in the revised return of income has been discussed by the Hon'ble Supreme Court of India in the case of Pr. CIT vs. Wipro Ltd. in 140 taxmann.com 223 (SC) 2022. It has been held that for claiming benefit u/s 108, the claim has to be made in the original return of income filed u/s 139(1) of the IT Act. Being pertinent, the relevant para of the Hon'ble Supreme Court decision is reproduced below; \"9. In such a situation, filing a revised return under section 139(5) of the IT Act claiming carrying forward of losses subsequently would not help the assessee. In the present case, the assessee filed its original return under section 139(1) and not under section 139(3). Therefore, the Revenue is right in submitting that the revised return filed by the assessee under section 139(5) can only substitute its original return under section 139(1) and cannot transform it into a return under section 139(3), in order to avail the benefit of carrying forward or set-off of any loss under section 80 of the IT Act. The assessee can file a revised return in a case where there is an omission or a wrong statement. But a revised return of income, under section 139(5) cannot be filed, to withdraw the claim and subsequently claiming the carried forward or set-off of any loss. Filing a revised return under section 139(5) of the IT Act and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible. By filing the revised return of income, the assessee cannot be permitted to substitute the original return of income filed under section 139(1) of the IT Act. Therefore, claiming benefit under section 108 (8) and furnishing the declaration as required under section 108(8) in the revised return of income which was much after the due date of filing the original return of income under section 139(1) of the IT Act, cannot mean that the assessee has complied with the condition of furnishing the declaration before ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 49 the due date of filing the original return of income under section 139(1) of the Act. As observed hereinabove, for claiming the benefit under section 108 (8), both the conditions of furnishing the declaration and to file the same before the due date of filing the original return of income are mandatory in nature.\" The provision of section 801A(7) provides that deductions from profits and gains shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deductions is claimed, have been audited by accountant. Further Income Tax Rules 18888 provides the conditions for claiming deductions u/s 801A/8018/80IC. The sub rule 2 of Income Tax Rule 18BBB, provides that a separate report is to be furnished by each undertaking or enterprise of the assessee claiming deductions 801 or u/s 801A or 8018 or 80IC Act shall be accompanied by P&L account and balance sheet of the enterprises as if the undertaking or the enterprise were a distinct entity. Also the Form No.10CCB has been provided in the Income Tax Rules which is for audit report ought to be filed by all assessee who wants to claim deductions u/s 801A/801/80IC. This form/report is to be filed for each undertaking and audit report has to be furnished one month prior to the due date of filing of return of income. From the facts of the case, it is clear that at the time of filing of original return of income, the assessee company did not comply with the rule 18BBB and form 10CCB on account of transfer of steam, and the same has not been filed before furnishing of return of income for claiming the enhanced deduction u/s 801A. The conditions prescribed in Rule 18BBB are almost similar to the provisions of section 10B(8) of the IT Act. In the above referred decision of Pr. CIT vs. Wipro Ltd, the Hon'ble Supreme Court has clearly laid down that for claiming benefit u/s 108(8), the twin conditions i.e. of furnishing of the declaration to the AO in writing and the same to be furnished before the due date of filing of return of income under section 139 (1) of the IT Act are required to be fulfilled. Being very pertinent, the relevant extract, i.e. para 8 of the Hon'ble Supreme Court judgment is reproduced below:- 8. While considering the issue involved, whether the time limit within which the declaration is to be filed as provided under section 10B (8) is mandatory or directory, Section 108 (8) is required to be referred to, which reads as under: \"10B (8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of Section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years.\" On a plain reading of section 108 (8) of the IT Act as it is, i.e., \"where the assessee, before the due date for furnishing the return of income ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 50 under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of section 108 may not be made applicable to him, the provisions of section 108 shall not apply to him for any of the relevant assessment years\", we note that the wording of the section 108 (8) is very clear and unambiguous. For claiming the benefit under section 108 (8), the twin conditions of furnishing the declaration to the assessing officer in writing and that the same must be furnished before the due date of filing the return of income under sub-section (1) of section 139 of the IT Act are required to be fulfilled and/or satisfied. In our view, both the conditions to be satisfied are mandatory. It cannot be said that one of the conditions would be mandatory and the other would be directory, where the words used for furnishing the declaration to the assessing officer and to be furnished before the due date of filing the original return of income under sub-section (1) of section 139 are same/similar. It cannot be disputed that in a taxing statute the provisions are to be read as they are and they are to be literally construed, more particularly in a case of exemption sought by an assessee. Thus, from the perusal of the above, it has been made crystal clear by the Hon'ble Supreme Court that both the conditions i.e. declaration in writing and submission of the same before the filing of return of u/s 139(1) are to be mandatory satisfied for claiming exemptions. The ratio of the Hon'ble Supreme Court decision is applicable to this case also and in the instant case the assessee was required to mandatory comply with the conditions of filing of the audit report for each project and the same was required to be filed before the due date of filing of return of income u/s 139(1) of IT Act. From the perusal of the facts of the instant case, above noted mandatory conditions were not complied by the assessee for the so called enhanced claim of deductions u/s chapter VIA and accordingly the assessee has to be denied the enhanced deduction on account of transfer of steam, as claimed by filing of letter during assessment stage based on some chartered engineers report. The same has been reiterated by the Hon'ble Supreme Court in the case of Wipro Ltd. (cited above) in its operative part, which being very pertinent is reproduced below:- \"14. In view of the above discussion and for the reasons stated above, we are of the opinion that the High Court has committed a grave error in observing and holding that the requirement of furnishing a declaration under section 108(8) of the IT Act is mandatory, but the time limit within which the declaration is to be filed is not mandatory but is directory. The same is erroneous and contrary to the unambiguous language contained in section 108(8) of the IT Act. We hold that for claiming the benefit under section 108(8) of the IT Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with. Accordingly, the question ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 51 of law is answered in favour of the Revenue and against the assessee. The orders passed by the High Court as well as ITAT taking a contrary view are hereby set aside and it is held that the assessee shall not be entitled to the benefit under section 10B(8) of the IT Act on non-compliance of the twin conditions as provided under section 108(8) of the IT Act, as observed hereinabove. The present Appeal is accordingly Allowed. However, in the facts and circumstances of the case, there shall be no order as to costs. Thus in the instant case also, the assessee was required to furnish the form 10CCB before the due date of filing of original return of income u/s 139(1) and because of the failure of the assessee to do the same, the enhanced deduction under chapter VIA cannot be allowed to the assessee on account of transfer of steam of Rs 350,71,75,273/-. Also, in the Wipro case, it is specifically mentioned by the Hon'ble Supreme Court that in taxing statute, the provisions are to be read as they are and they are to be literally construed, more particularly in a case of exemption as sought by an assessee. In the instant case also, as the assessee is claiming deductions, the provisions of the IT Act are to be strictly applied and accordingly the deductions are to be denied to the assessee. In view of the above discussion, the assessee is not entitled to enhance the claim of deduction under section 80-1A of the Income Tax Act at this stage.” 45. The assessee in re-joinder has made a submission on 01.05.2025 and submits that the judgement relied upon by the Ld. CIT DR in the case of Pr.CIT vs Wipro Ltd. [2022] 140 taxmann.com 223 (SC) is distinguishable on the facts as the assessee has not made any fresh claim under section 80IA of the Act but it is an enhanced/revised claim of deduction already made int eh return of income filed. The relevant rejoinder filed by the AR is as under- “At the outset it is submitted that that submission of ld. DR which runs in 9 pages has nothing new in terms of arguments, contentions, reliance on case laws etc. The written submission by the Id. DR is merely a written version of the oral arguments made during the course of hearing before your honours on 24th April, 2025 wrt. the issue mentioned in the subject viz. the enhanced claim on account of transfer of steam ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 52 However, against said submission, the assessee would like to briefly reiterate its earlier submission for the sake of ready reference for your honours. Brief facts The assessee has filed an application on 19.05.2023 with a copy to the Id. DR vide which some additional ground of appeal has been raised as identified in the said application as also additional evidence under Rule 29 has been filed with a prayer to admit the same. As submitted in the detailed explanation as to what triggered the assessee to file the additional ground of appeal, it is submitted that additional ground of appeal enhances the claim u/s 80-IA upon existing claim made in the return. In fact, your honour would notice that the assessee had already filed a claim u/s 80-IA which has also been partially allowed by the Assessing Officer after making some adjustments as per the order of the Transfer Pricing Officer. As per law, the assessee should have claimed a higher deduction u/s 801A which had been omitted to claim because the determination of the enhanced claim u/s 801A arising from the transfer of steam came to knowledge of assessee by certain judgements namely Nectar Lifesciences Limited, Shahi Exports Pvt. Ltd. as also the directions of the Hon'ble DRP-II, New Delhi in the case of SRF Limited based on which judgements, the assessee realized that it should have claimed a higher amount of deduction u/s 801A of the Income Tax Act on account of transfer of steam. During the course of hearing, the Id. DR requested the bench to allow him to file a written submission against the said issue. The written submission filed by the Id. DR does not have any new point on the said issue, all points in the submission are same which were raised/argued orally during the hearing on 24th April, 2025 and the assessee hereby is filing rejoinder against the said submission as follows: - We would like to respectfully submit with regard to the admission of additional evidence as under: Rule-29, Income-tax (Appellate Tribunal) Rules, 1963: Production of additional evidence before the Tribunal \"29. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.\" ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 53 As discussed above, the assessee realized that enhanced deduction could be claimed only after the judgments supporting such methodology came to its knowledge and therefore, the assessee could not submit the said evidences at the time of proceedings before the Id. AO. Hence, it is prayed that contention of Id. DR are not acceptable and assessee's grounds and evidence be admitted on this point. In this regard, further reliance is placed on the observation made by the Hon'ble Supreme Court, which defines the term \"for any other substantial cause\", in case of K. Venkatramaiah v. A. Seetharama Reddy, AIR 1963 SC 1526, that under rule 27(1) of Order 41 of the Code of Civil Procedure, \"That the appellate court has power to allow additional evidence not only if it requires such evidence \"to enable it to pronounce judgment\" but also for \"any other substantial cause.\" There may be cases where even though the court finds that it is able to pronounce judgment on the state of the record as it is and so it cannot strictly say that it requires additional evidence \"to enable it to pronounce judgment,\" it still considers that in the interest of justice something which remains obscure should be filled up so that it can pronounce its judgment in a more satisfactory manner. Such a case will be one for allowing additional evidence \"for any other substantial cause\",\" Similarly, the Hon'ble Delhi High Court in case of Text Hundred India Pvt. Ltd. [TS-13-HC-2011(DEL)] places reliance on the said judgements of Hon'ble Supreme Court (supra) and observed that: A copy of the said judgement was filed before your honours on 25.04.2025. \"Para 12. The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the parties to the appeal and it need not to be a suo motto action of the Tribunal. The aforesaid rule is made enabling the Tribunal to admit the additional evidence in its discretion if the Tribunal holds the view that such additional evidence would be necessary to do substantial justice in the matter. It is well settled that the procedure is handmade of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect.\" Further, reliance is hereby placed on the following cases wherein the additional evidences as filed by the assessee has been accepted, which have a material bearing and go to the root of the matter needs to be decided by the Tribunal deserves to be accepted to impart complete justice to the assessee: ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 54 a) South Konkan Distilleries [AIR 2009 SC 1177 b) HL. Malhotra and Company Private Limited vs. DCIT [ITA 211/2020], Delhi High Court as reported in 2021-TIOL-507- HC(Delhi), c) Seven N Consulting Pvt Ltd [TS-342-ITAT-2016(DEL)-TP d) GE Energy Parts Inc. [TS-400-ITAT-2014(DEL)], e) Rolls-Royce Marine India Private Limited [TS-841-ITAT- 2017(Mum)-TP, f) Bhrigus Software (India) Pvt. Ltd. [TS-179-ITAT-2013(HYD)-TP). Furthermore, Id. DR's submission on the assessee's reliance on the ITAT ruling in the case of assessee's group concern namely DCM Shriram Industries Limited [ITA no. 1000/D/2022 for AY 2017-18 and ITA no. 539/D/2021 for AY 2016-17] stating that \"since there is no discussion with regard to any objection raised to admission of additional ground and additional evidences in the order and order is silent on this aspect, therefore the finding of Hon'ble Tribunal in the said case cannot be of any help to the assessee in light of specific objection raised to admission of additional grounds of appeal and additional evidences\" is unjustified, misplaced and suffers from illegality as it beyond the scope and authority of Id. DR to pass such comments on Hon'ble ITAT order and moreso where said ITAT order has not been challenged by the department. The Id. DR has incorrectly interpreted the Id. AR's contention. The reliance on the said decision by Id. AR was not in relation to the admission of additional grounds or evidence. Rather, the Id. AR cited the judgment solely on the basis of factual similarity, as in the case of DCM Shriram Industries Limited (supra), the Hon'ble ITAT had remitted the identical issue back to the file of the Assessing Officer to examine the said issue as fresh as per provisions of law. The relevant extract of the said order is reproduced herewith as follows: - \"8. The next issue is with reference to re-determination of ALP of steam transferred from eligible unit to non-eligible units and consequent enhancement of deduction under section 801A of the Act. This issue arises in assessment years 2016-17 and 2017-18. 9. We have considered rival submissions and perused the materials on record. As could be seen from the materials placed before us, this issue was raised for the first time by the assessee before the Tribunal through additional grounds in assessment year 2016-17. In assessment year 2017-18, as well, the assessee did not raise the issue in course of assessment proceedings. Even, before learned DRP no specific objection was raised in this regard. It is the say of the assessee, in course of proceedings before the DRP, the assessee has raised the issue of enhanced claim of deduction under section 801A of the Act through submissions. However, learned DRP has completely ignored the issue while issuing the directions. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 55 10. Having heard the parties and considering the fact that neither the Assessing Officer, nor learned DRP have examined this particular claim of the assessee, we are inclined to restore this issue to the file of the Assessing Officer for verifying assessee's claim and deciding the issue in accordance with law, However, the Assessing Officer is directed to provide reasonable opportunity of being heard to assessee. The grounds are allowed for statistical purposes.\" Further, it may also be noted that the evidences and ground pertaining to this issue for enhanced claim has been raised/filed in AY 2016-17 before your honours, while for rest of the years, i.e. AY 2018-19 and AY 2020-21, the claim was raised before Id. AO/TPO, for which the Id. DR did not place any objections / arguments. Therefore, in the interest of justice, it was the request of the assessee that since all three years have the identical issue with regard to the enhanced claim same treatment should be afforded in all three years. The Id. DR during the course of hearing and in the written submission has also relied upon the section 80A and 80AC of the Act, Rule 18BBB of the Act stating that the assessee failed to claim the so-called enhanced deduction u/s 80-IA in the original return of income, it is clearly hit by provision of section 80(5) r.w.s 80AC of the IT Act and accordingly these deductions under chapter VI-A cannot be allowed to the assessee. He further relied upon the following judicial precedents to contend that the assessee cannot file a fresh claim of chapter VI-A deductions by filing the revised return of income at the assessment stage and not in original return of income. a) M/s Patel Brass Works Pvt. Ltd. Vs. ACIT, Circle 5 Rajkot [ITA no. 60/RJT/2020] b) Rachna infrastructure Pvt. Ltd. [2022] 138 taxmann.com 416 (Gujarat) c) ITO vs. Jagtap Patil Promoters and Builders 147 taxmann.com 199(2023) The Id. DR also placed reliance on the judgment of Hon'ble Supreme Court in the case CIT vs. Wipro Ltd. In 140 taxmann.com 223(SC) 2022 stating that mandatory conditions were not complied by the assessee for the so- called enhanced claim of deduction u/s 80-IA as it was claimed by filing a letter during assessment stage based on the chartered engineer certificate. In this regard, it is submitted that assessee has raised an enhanced claim of deduction which is not a fresh claim of deduction u/s 80-1A of the Act, it is only a correction/revision of the original claim of deduction under section 80-IA of the Act already claimed by the assessee in the original return of income filed u/s 139(1) of the Act on or before the due date. In the instant case of the assessee, the claim was duly raised in the return of income originally filed before the due date of the return filing. Thus, the contentions of ld. DR on this point are not acceptable. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 56 Reliance is placed on the following judicial precedents which are applicable to the assessee's case and has also distinguished the ruling of Hon'ble Supreme Court in CIT vs. Wipro Ltd. In 140 taxmann.com 223(SC) 2022: - a) Shree Bhavani Power Projects (P) Ltd. Vs. ITO [2024] 165 taxmann.com 733(Delhi) (P.no 409-419 of CLC) \"31. One of the reasons which appears to have weighed upon the Supreme Court while rendering its decision in Wipro Limited (supra) was of Section 10B being an exemption provision. This is evident from the Supreme Court significantly observing that Section 10B(8) being an exemption provision not being liable to be compared with Section 32(1)(ii-a) and which was concerned with a claim for additional depreciation. Regard must also be had to the fact that Section 10B(1) is essentially concerned with the grant of exemptions to newly established hundred per cent export-oriented undertakings and the deduction of profits and gains derived by such an enterprise. Sub-section (8) thereof enables an assessee to opt out of the exemption provisions contained therein subject to a requisite declaration being submitted. Since such a declaration would have an immediate and indelible bearing on the assessment of the Return of Income itself, it would clearly be liable to be viewed as a mandatory requirement warranting such a declaration being made at the outset itself and the statutory prescriptions made in that regard being liable to be strictly adhered to. 32. The aforesaid position may be contrasted with Section 80-IA(7), and which is principally concerned with deductions that may be claimed and the Audit Report being made available for examination by the AO. In these writ petitions, we are in any case concerned solely with whether a failure to digitally upload the Audit Report could be said to be destructive. It is for the aforenoted reasons that we are inclined to hold that Wipro Limited (supra) is distinguishable and that it would be the principles enunciated in G.M. Knitting (supra) which would govern the present matters.\" b) PCIT vs. Oracle (OFSS) BPO Services Ltd. [2019] 102 taxmann.com 396(Delhi) \"22. Our attention was, however, drawn to the observations of the Division Bench that the objective behind the amendment was to defeat multiple claims of deduction and ensure hetter compliance. Certainly, the amended provisions ensure better compliance of the statutory provisions. Reference to the expression 'multiple claims of deduction' would be with reference to the stipulation that deduction should be claimed under a particular provision and it cannot be shifted and treated as deduction claimed under the other provision. Language of Sub-section 5 to Section 80 A does not state that the deduction once claimed under a particular section cannot be ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 57 corrected and modified before the Assessing Officer. Indeed, the Assessing Officer can examine the claim for deduction and can make adjustment/disallowance. We would not read in the amended provision, a stipulation barring and restricting the assessee from revising the computation/claim for deduction made in accordance with Section 80A (5) of the Act.\" Thus, based on the above submissions and judicial position, it is prayed before your honours that the ground and evidence filed by the assessee on the issue of enhanced claim of deduction w/s 80-IA may kindly be admitted and respectfully following the order of Hon'ble ITAT in the case of DCM Shriram industries Limited (ITA No 1000/D/2022 for AY 2017-18), the claim of the enhanced deduction under section 80-IA may kindly be remitted back to the file of the assessing officer for verification and to be allowed as per law.” 46. On careful consideration of the facts of the matter and after considering the arguments put forth by both the parties, it is seen that the assessee in the original return of income u/s 139(1) claimed deduction u/s 80IA of the Act on the transfer of steam from eligible units to non-eligible units at INR 1,04,88,00,979/-. Such claim was disallowed in terms of the adjustment proposed by the TPO and upheld by the Ld. DRP however, while deciding the assessee’s ground of appeal No.2 to 5, we have already allowed such claim of deduction by following the judgement of Co-ordinate Bench of Tribunal in assessee’s own case for AY 2014-15 and also by the judgement of hon’ble jurisdictional high court who in revenue’s appeal had not admitted substantial question of law on this issue. 47. Now by taking additional grounds of appeal, the assessee has made revised / additional claim of INR 2,99,49,20,010/- of deduction u/s 80 IA towards transfer of steam from eligible units to non-eligible units. The assessee has claimed that it is based on the order of Hon’ble DRP-II, New Delhi dated 26.03.2021 in case of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 58 group concerns M/s. SRF Ltd. for AY 2016-17 where the additional claim was considered and allowed by the Hon’ble DRP. The assessee’s claim is that the Hon’ble DRP while allowing the additional claim in the case of group concern M/s. SRF Ltd. placed reliance on the certificate issued by Chartered Engineer. As the Ld. DRP had issued directions only on 26.03.2021, it was not possible for the assessee to make such additional claim before the AO who has already passed the final assessment order after the directions of Ld. DRP on 28.12.2019. Thus under these circumstances, this additional claim is made for the first time before the Tribunal by filing additional grounds of appeal and further by filing additional evidences. With regard to the admission of additional grounds of appeal, we find that the additional ground taken are legal in nature where the assessee has claimed the revised / additional deduction u/s 80 IA of the Act. The Hon’ble Supreme Court in the case of NTPC vs CIT 229 ITR 383 has held that any legal claim could be made at any stage of the proceedings. It is further seen that the Revenue has challenged the admission of additional grounds for the reason that it is a fresh claim made by the assessee. Since it is not made through the income tax return filed u/s 139(1) of the Act, such claim could not be admitted. For this reliance was placed in the case of PCIT vs Wipro Ltd.(supra) wherein the Hon’ble Supreme Court has held that, one of the mandatory conditions is that for claiming the benefit u/s 10B(8) of the Act, the twin conditions of furnishing the declaration to the AO in writing and the same must be furnished before the due date of filing of return of income u/s 139(1) of the Act are required to be fulfilled and are satisfied which ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 59 conditions are mandatory. It cannot be said that one of the conditions would be mandatory and other is directory. However, in the instant case, it is seen that the assessee has not made afresh claim of deduction u/s 80IA of the Act before us, but the claim of the deduction u/s 80IA of the Act was made in the return of income which was revised to an upward figure and for which the additional claim is lodged before the Tribunal for the first time. Therefore, the judgement of Hon’ble Supreme Court in the case of Wipro Ltd. (supra) is not applicable to the facts of the present case. The Hon’ble Delhi High Court in the case of PCIT vs Oracle (OFSS) BPO Services Ltd. (2019) 102 taxmann.com 396 (Del.) has held that “the Act does not debar the assessee to correct or modify the deduction once claimed under particular section.” The AO indeed can examine the claim of deduction and can make additions/disallowances. 48. In view of the overall discussion, we admit the additional grounds of appeal taken by the assessee with respect to the additional / revised claim of deduction u/s 80IA of the Act. 49. With respect to the admission of additional evidences, we find that these evidences are crucial to decide the quantum of deduction of additional / revised claim of deduction u/s 80IA made by the assessee in the additional grounds of appeal taken before us. The assessee while filing the additional grounds of appeal in categorical terms has admitted that the said claim is made only after the directions given by Hon’ble DRP in the case of group concern ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 60 M/s.SRF Ltd in terms of order passed on 26.03.2021 and prior to that making, such claim is not possible. The additional evidences also contained the Chartered Engineer certification with regard to the working of enhanced claim and supported by the revised certificate in this regard. 50. In the instant case, since the draft assessment order, the direction by the Hon’ble DRP and the final assessment order was passed prior to the direction given by ld.DRP in the case of M/s. SRF Ltd. therefore, these evidences could not be filed before the lower authorities. This is a reasonable cause for admission of the additional evidences at this stage. 51. In view of these facts and by respectfully following the judgments as relied upon by the assessee in particular, the judgement of Hon’ble Jurisdictional Delhi High Court in the case of Text Hundred India Pvt.Ltd. [TS-13-HC-2011 (Del.)], we find that the assessee has shown sufficient cause for non-filing of these evidences before the lower authorities and therefore, the same are hereby admitted for adjudication. 52. Now coming to the merits of the issue taken in the additional grounds of appeal, Ld.AR for the assessee contended that identical issue has been decided by the Co-ordinate Bench of the Tribunal in assessee’s group company namely DCM ShriRam in ITA No.1000/Del/2002 for AY 2017-18 and in ITA No.539/Del/2021 for AY 2016-17. In the said case, the Co-ordinate Bench has remitted ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 61 back all the issues of additional claim of deduction u/s 80IA of the Act on transfer of steam to the file of AO for fresh consideration on the basis of additional evidences and direct to decide the issue as per law. The relevant observations made by the CO-ordinate Bench are as under:- 8. “The next issue is with reference to re-determination of ALP of steam transferred from eligible unit to non-eligible units and consequent enhancement of deduction under section 801A of the Act. This issue arises in assessment years 2016-17 and 2017-18. 9. We have considered rival submissions and perused the materials on record. As could be seen from the materials placed before us, this issue was raised for the first time by the assessee before the Tribunal through additional grounds in assessment year 2016-17. In assessment year 2017-18, as well, the assessee did not raise the issue in course of assessment proceedings. Even, before learned DRP no specific objection was raised in this regard. It is the say of the assessee, in course of proceedings before the DRP, the assessee has raised the issue of enhanced claim of deduction under section 801A of the Act through submissions. However, learned DRP has completely ignored the issue while issuing the directions. 10. Having heard the parties and considering the fact that neither the Assessing Officer, nor learned DRP have examined this particular claim of the assessee, we are inclined to restore this issue to the file of the Assessing Officer for verifying assessee's claim and deciding the issue in accordance with law, However, the Assessing Officer is directed to provide reasonable opportunity of being heard to assessee. The grounds are allowed for statistical purposes.\" 53. As observed above, the issue of additional / revised claim of deduction u/s 80IA of the Act on transfer of steam is raised for the first time by the assessee before us, by filing the additional grounds of appeal and supported by the additional evidences. The assessee has not made such claim either before the AO or before the Hon’ble DRP and thus the veracity of the additional claim remained to be examined on the merits by the lower authorities. In view of these facts, we restore back this issue to the file of AO to verify the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 62 assessee’s claim of additional / revised deduction 80IA of the Act and decide the same in accordance with law. The assessee has also directed to file all the necessary evidences and further filed any other details as called for from time to time by the AO in respect to verification of such additional /s revised claim. With these directions, the additional grounds of appeal taken by the assessee are allowed for statistical purposes. 54. Ground Nos.6 to 9 are in relation to disallowance of INR 54,14,870/- made by the AO by invoking the provision of rule 8D(2) of the Rules. 55. Heard both the parties and perused the material available on record. This issue has already been decided by us in favour of assessee in Revenue’s appeal for AY 2015-16 in ITA No. 927/Del/2022. Thus, by following the observations made therein, the disallowance u/s 14A made in the year under appeal is hereby deleted. Accordingly, Ground of appeal Nos.6 to 9 are allowed. 56. Ground No.10 raised by the assessee is in relation to the adjustment of disallowance u/s 14A to the book profits computed u/s 115JB of the Act. 57. Heard both the parties and perused the material available on record. The identical issue has already been decided in favour of the assessee while disposing the additional grounds of appeal taken by the Revenue in its appeal in ITA No.927/Del/2022 for AY 2015- ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 63 16. Thus, by respectfully following the observations made therein, we hold that no adjustment could be made in the book profits on account of disallowance made u/s 14A of the Act. Ground No.10 of the assessee is accordingly, allowed. 58. Ground No.11 raised by the assessee is in respect to the deduction of INR 1,33,85,194/- u/s 37 of the Act. 59. This issue has been settled in terms of the Hon’ble Supreme Court in the case of Sesa Goa Ltd. vs Joint Commissioner of Income Tax 155 taxmann.com 342 wherein the Hon’ble Supreme Court has held that “education cess cannot be allowed as deduction while computing the income under head business or profession”. The Hon’ble apex Court further observed that the amendment made by Finance Act, 2022 is retrospective in nature. 60. In view of these facts, we find no infirmity in the order of Ld. AO/ DRP in not allowing the expenses claimed towards education cess by the assessee. Thus, Ground No.11 raised by the assessee is dismissed. 61. Ground Nos.12 & 13 taken by the assessee are not pressed therefore, the same are dismissed. 62. Ground No.14 raised by the assessee in respect of initiation of penalty proceedings u/s 271(1)(c) which is pre-mature at this stage and therefore, is dismissed. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 64 63. Ground No.15 raised by the assessee is with respect of charging of interest u/s 234C of the Act. 64. After considering the submissions, we direct the AO that the interest u/s 234C of the Act be charged on the income declared by the assessee in the return of income filed accordingly, Ground No.15 raised by the assessee is partly allowed for statistical purposes. 65. In the result, appeal of the assessee is partly allowed. ITA No.2587/Del/2022 (AY- 2018-19) [Assessee’s appeal] 66. This appeal is filed by the assessee against the assessment order dated 30.08.2022 passed u/s 143(3) r.w.s.144C(13) of the Act as a consequence of directions by Hon’ble DRP vide its order dated 16.06.2022 pertaining to assessment year 2018-19. 67. Brief facts of the case are that the assessee has filed the return of income on 27.11.2018, declaring total income at INR 4,20,48,46,610/- which was processed u/s 143(1) of the Act. Thereafter, by way of issue of notice u/s 143(2) of the Act on 22.09.2019, the case of the assessee was taken for scrutiny. The AO found that the assessee has entered into international transactions and specified domestic transaction and therefore, a reference was made to the TPO for the determination of ALP of such transactions. The TPO after considering the submissions and going through the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 65 facts of the case has proposed following adjustments to the domestic as well as international transactions:- Sl.No. Particulars (Nature of Adjustment) Amount (In Rs.) 1. Transfer of Steam 98,20,41,276 2. Transfer of electricity from eligible unit to non-eligible unit 70,40,57,860 3. Sale of Seeds 1,49,75,000 4. Interest on Loan given 1,61,77,929 5. Interest on receivables 36,77,478 Adjustment u/s92CA 172,09,29,543 68. The AO thereafter, passed the draft assessment order dated 21.09.2021 wherein in addition to the adjustments proposed by the TPO, various other additions/disallowances were also proposed and total income was assessed at INR 6,49,05,22,270/- and Long Term Capital loss was assessed at INR 3,05,94,029/-. The AO has also computed the book profit in terms of section 115JB of INR 8,96,94,97,676/- declared by the assessee. 69. Against this draft assessment order, the assessee filed objections before the Hon’ble DRP. The Hon’ble DRP vide impugned order dated 16.06.2022 has partly accepted the objections raised by the assessee. The TPO in compliance to the directions given by the Hon’ble DRP passed the effect order on 30.08.2022 wherein the adjustments as proposed in draft assessment order at INR 1,72,09,29,543/- were reduced to INR 1,69,03,44,466/-. Thereafter, the AO has passed the final assessment order dated 30.08.2022 u/s 143(3)/144C(13) of the Act wherein income of the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 66 assessee is assessed at INR 6,45,99,37,190/- and Long Term Capital loss was assessed at INR 3,05,94,029/-. The book profits was assessed at INR 8,96,94,97,676/-. 70. Against such order, the assessee is in appeal before the Tribunal. The assessee has taken the following grounds of appeals:- General Grounds 1. “That the Ld. Assessing Officer (\"AO\") has erred in law and on facts, in the circumstances of the assessee's case in making the addition/ adjustment to tune of 1,69,03,44,466/- on account of transfer pricing issues and addition /disallowance of 11,37,92,673/- on account of corporate tax issues. The Id. AO has also erred in making an addition of 8,70,000/- in the computation of 'books profits' u/s 115JB of the Act under the MAT provisions. 2. That the ld. AO has erred in not entertaining and granting the enhanced claim of deduction to tune of 6,74,78,23,731 u/s 80-1A of the Act raised by the assessee during the course of transfer pricing proceedings / assessment proceedings as well as before the Id. DRP and also inspite of specific directions of the ld. DRP to consider such claim of the assessee. 3. That the assessment order passed by the ld. AO u/s 143(3) r.w.s. 144C(13) of the Act dated 30th August, 2022 is bad in law. The adjustment/ addition/disallowances are on wholly illegal, untenable and on erroneous grounds. COMMON GROUND OF OBJECTIONS AGAINST THE FINAL ASSESSMENT ORDER Incorrect name as well as incorrect PAN mentioned in the directions passed by the ld.DRP u/s 144C(5) of the Act 4. That the Id. DRP has erred in facts and on the circumstances of the case by mentioning the incorrect PAN in the directions passed u/s 144C(5) of the Act dated 16th June, 2022 as well the incorrect name and incorrect PAN in the intimation letter of order u/s 144C(5) of the Act dated 28th June, 2022. 5. It is humbly prayed before the Hon'ble ITAT that directions passed by the lid. DRP dated 16th June, 2022 being vitiated by a non- curable defect u/s 292B of the Act and consequently the final assessment order passed by the Id. AO u/s 143(3) r.w.s. 144C(13) of the Act dated 30th August, 2022 pursuant to such directions of ld. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 67 DRP u/s 144C(5) of the Act be held as null & void and hence liable to be quashed. Draft Assessment order and final assessment order are null & void 6. That the draft assessment order dated 21\" September, 2021 passed by the Id. AO is null & void and is liable to be quashed being passed in gross violation to the statutory provisions of the Act on the following accounts: a) that principles of natural justices have been flouted as both the transfer pricing adjustment and corporate tax additions have been made by the Id. AO without issuing any show cause notice on any issue and thus depriving the assessee of its fair and reasonable opportunity of being heard; and b) that statutory procedure laid down in clause (xvi)(b) of sub-section (1) of section 144B of the Act r.w. sub-section (9) of that section prescribing the issuance of show cause notice along with draft assessment order in prescribed manner has not been followed by the Id. AO before passing the draft assessment order u/s 144C of the Act dated 21\" September, 2021. 7. That the Id. DRP has erred in law and in facts and circumstances of the case in not quashing the draft assessment order which is vitiated being null and void and instead validating the action of ld. AO by giving him direction to pass speaking order. 8. That without prejudice to above ground, the Id. AO has erred in law and the facts and circumstances of the case by not granting hearing to the assessee in terms of section. 144B of the Act and by not passing a speaking order in this regard, inspite of the specific binding directions of the Id. DRP vide para no. 4.2.2 & para no. 4.2.3. 9. It is humbly prayed before the Hon'ble ITAT that both the draft assessment order dated 21 September, 2021 and final assessment order u/s 143(3) r.w.s. 144C(13) of the Act dated 30th August, 2022 may be quashed being null & void. Income computed as per intimation u/s 143(1) of the Act is inaccurate and erroneous 10. That the Id. AO has erred in law and in facts and circumstances of the case in not rectifying the following mistakes apparent from the records, inspite of the specific directions of the Id. DRP vide para no. 4.3.1 of its directions.: a) Inadvertent addition of an amount of 1,03,10,987/-, being the dividends received from mutual funds which is exempt u/s 10(35) of the Act and the same has been duly disclosed by the assessee at the time of filing its return of income. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 68 b) not giving the allowance of deduction u/s 43B of the Act amounting to 45,04,47,576/-claimed by the assessee in its return of income, being the amounts actually paid during the year which were earlier added back in the computation of previous assessment year(s). 11. That the Id. AO has erred in facts and circumstances of the case in not rectifying the above mistakes apparent from records by incorrectly holding that assessee did not provide any documentary evidence and failed to explain the same. 12. That the Hon'ble ITAT may be pleased to direct the Id. AO to rectify the above mistakes apparent from records while computing the total income of the assessee. GROUNDS OF OBJECTIONS AGAINST TRANSFER PRICING ADJUSTMENTS Transfer of Electricity from Eligible to Non-Eligible Units- adjustment of ₹70,40,57,860/- 13. That the Id. DRP has erred in not dealing with/ adjudicating the assessee's various grounds of objections on merits, in the backdrop of favourable order of the Hon'ble ITAT in assessee's own case for the AY 2014-15 on the issue. 14. That even otherwise, the Id. TPO/AO has erred in law and on facts and circumstances of the case in not following the binding directions of the Id. DRP by not deleting the aforesaid adjustment/addition as according to the best of the knowledge of the assessee no intimation of filing any appeal before the Hon'ble High Court has been received and further no records of filing such an appeal is available on the official website of Delhi High Court till the passing of the order dated 30th August, 2022 by the Id. AO. Grounds on merits not adjudicated by ld. DRP 15. That Ld. TPO and consequently the Ld. AO have erred in law and on facts and in circumstances of the assessee's case in: a) taking 6.36 per unit as arm's length price (ALP) for transfer of electricity being the average of following: (i) Indian Energy Exchange (IEX) rates @3.25 per unit [external price obtained by the Id. TPO from IEX website]; and (ii) assessee's comparable uncontrolled price data in form actual purchase of electricity from respective state electricity board (SEB)- JVVNL[@ 9.47 per unit); and then b) comparing the above average rate with assessee's actual transfer price [@ 8.52 per unit) and making adjustment of 70,40,57,860/- being the difference between the two rates i.e. [8.52 (-) 6.36 per unit] ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 69 multiplied with quantities of electricity transferred i.e. 32,59,52,713 units by assessee's eligible power plant at Kota to non-eligible unit. 16. The Ld. TPO and consequently Ld. AO have erred in law and on facts and circumstances of the case in using an additional external data in the form of rates obtained from IEX when reliable internal CUP data in form of actual purchase of electricity from SEB, Kota was available with the assessee. 17. That Ld. TPO and consequently the Ld. AO have erred in law and on facts and in circumstances of the assessee's case in treating the rates of electricity traded on IEX, as comparable uncontrolled rates/prices. IEX Transactions are not at all comparable with the assessee's transactions on account of following factors: - a) that modus operandi and business model of IEX which is an spot energy exchange b) that rates obtained from IEX which is only a platform and not SEB do not qualify as an appropriate comparable data under CUP method. c) that there are material differences between the functional profile and terms and conditions of transaction entered into by the assessee and those taken from IEX. 18. The Ld. TPO and consequently the Ld. AO have erred in law and on facts and circumstances of the case in averaging the data of two different systems viz. assessee's internal CUP and IEX spot rates and erroneously treating such average rate as ALP for the purpose of making the aforesaid adjustment in respect of transfer of electricity by eligible power plant at Kota. 19. That the Ld. TPO has erred in ignoring the assessee's reliance on Safe harbor rules (SHR) provided in Rule 10THC of Income-tax Rules, 1962 and on various judicial precedents on the issue which corroborates the assessee's methodology of taking SEB rates as comparable uncontrolled price. 20. That without prejudice, the Id. TPO and consequently the Id. AO have erred in not appreciating that IEX rates as obtained are only basic rates and various other charges viz. fixed charges, POC charges, RPO Charges, distribution charges, NLDC Charges, load charges, electricity duty, cesses etc. have been completely disregarded. 21. The Ld. TPO and consequently the ld. AO have erred in law and on facts and circumstances of the case in not following the rule of consistency by disregarding the methodology followed by the assessee for transfer of electricity since assessment year 1997-98 which has been accepted by the department in past and has also been upheld by the Hon'ble ITAT and the Id. CIT(A) in assessee's own case for the AY 2014-15 and AY 2015-16 respectively. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 70 22. It is humbly prayed before the Hon'ble ITAT that the transfer pricing adjustment of ₹70,40,57,860/- in respect of transaction of transfer of electricity by the eligible power plant at Kota be directed to be deleted. Transfer of Steam from Eligible to Non-Eligible Units-adjustment of 98,20,41,276/- 23. That the Id. DRP has erred in not dealing with adjudicating the assessee's various grounds of objections on merits, in the backdrop of favourable order of the Hon'ble ITAT in assessee's own case for the AY 2014-15 on the issue. 24. That even otherwise, the Id. TPO/AO has erred in law and on facts and circumstances of the case in not following the binding directions of the Id. DRP by not deleting the aforesaid adjustment/addition as according to the best of the knowledge of the assessee no intimation of filing any appeal before the Hon'ble High Court has been received and further no records of filing such an appeal is available on the official website of Delhi High Court till the passing of the order dated 30th August, 2022 by the Id. AO. Grounds on merits not adjudicated by ld. DRP 25. That the Ld. DRP/TPO and consequently the Id. AO have erred in law and facts and in circumstances of the case in making an adjustment of 98,20,41,276/- in respect of specified domestic transaction of transfer of steam by eligible power units to non- eligible units [at its cost of production] by treating its arm's length price /cost of production at NIL on wholly erroneous, superficial and arbitrary grounds. 26. That the Ld. TPO and consequently the Ld. AO have erred in not appreciating the modus-operandi of the assessee's eligible power plants which is based on the co-generation model and thus erred in making irrelevant, incorrect and unnecessary observations about the assessee's business process. 27. That the Ld. TPO and consequently the Ld. AO have exceeded their jurisdictions by questioning the business expediency of the transaction of steam by treating the value of a commercially valuable product at NIL which is beyond the mandate of transfer pricing statute. 28. The Ld. TPO and consequently the Ld. AO have erred in law and on facts and circumstances of the case in not following rule of consistency by disregarding the same methodology followed by assessee since inception i.e. FY 2005-06 which has also been upheld by the Hon'ble ITAT & the Id. CIT(A) in assessee's own case for the AY 2014-15 and the AY 2015-16 respectively. Enhanced Claim of deduction u/s 80-IA of the Act raised during the assessment proceedings as well as before the Id. DRP ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 71 29. That the Id. TPO and consequently the Id. AO has erred in law and the facts and circumstances of the case by not entertaining the enhanced claim of deduction u/s 80-IA of the Act inspite of the specific binding directions of the Id. DRP vide para no. 4.6.1 w.r.t. the enhanced claimed raised by the assessee during the course of transfer pricing proceedings / assessment proceedings as well as before the Id. DRP w.r.t. the re-determination of value of steam and consequent enhancement of deduction u/s 80-IA of the Act. 30. That the Id. TPO and consequently the Ld. AO have erred in not entertaining the submissions of assessee to re-determine the arm's length price of steam transferred from eligible units to non eligible units at 8,33,02,05,098/- [instead at its cost of production at 1,58,23,81,367/-], which is computed by multiplying the equivalent quantity of such steam in terms of unit of electricity (KWH) as certified by the Chartered Engineer with the ALP rate of electricity and corroborated by the supplementary form no. 10CCBs. 31. That the id. TPO and consequently the Id. AO have erred in not allowing the consequential enhancement deduction of₹ 6,74,78,23,731 u/s 80-1A of the Act claimed by the assessee from 3,28,60,68,984/- to ₹ 10,03,38,92,715/-, by considering the equivalent value of steam as determined above in ground no. 30 (viz. 8,33,02,05,098/). 32. It is prayed that the Hon'ble ITAT may be pleased to pass the following order: a. that assessee be allowed the enhanced claim of 6,74,78,23,731/-u/s 80-IA of the Act considering the equivalent value of steam based on the certificate of chartered engineer and corroborated by the supplementary form no. 10CCBs, which is in line with Id. DRP-II directions in case of SRF Limited for the AY 2016-17. b. without prejudice to above and in any case, the assessee's approach of transferring the steam at cost of production is at arm's length and hence adjustment made amounting to 98,20,41,276/- in respect of transfer of steam may be deleted. Sale of hybrid seeds - Adjustment of 14,17,000/- 33. That the Id. DRP/TPO and consequently the Id. AO have erred in law and facts and circumstances of the case in making an adjustment of 14,17,000/- in respect of international transaction of sale of hybrid seeds to the associated enterprise on wholly illegal and erroneous grounds. 34. The Ld. TPO and consequently the Id. AO have erred in law and facts and in circumstances of the case by not accepting the comparability analysis conducted by the assessee on account of following erroneous grounds: ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 72 a) rejecting the turnover filter applied by the assessee contending the same as not being an appropriate filter. b) Rejecting some of the assessee's comparables by allegedly claiming that the comparables are either persistent losses making or functionally not comparable with the assessee's bioseed segment. 35. The Ld. TPO and consequently the Id. AO have erred in law and facts and in circumstances of the case by conducting a fresh search process and resultantly adding new companies as comparables, which should not be accepted due to following reasons: a) that the FAR analysis, output of each stage of quantitative filter and PLI computation of the comparables as selected by the Ld. TPO has not been provided to the assessee neither as part of the SCN nor separately, which is against the principles of natural justice. b) that on the basis of FAR analysis conducted by the assessee, the new comparables of Id. TPO are both product-wise and functionally incomparable with the assessee's bioseed segment. c) without prejudice to the above, the PLIs of new comparables as computed by the Ld. TPO are at variance with the PLIs as computed by the assessee and if correct PLIs are considered, then assessee's PLI falls within such ALP range and hence no adjustment is warranted. 36. That the Id. TPO and consequently the Id. AO has erred in law and the facts and circumstances of the case by not considering the submissions of the assessee and by passing a non-speaking order inspite of the specific binding directions of the Id. DRP vide para no. 4.7.3 to verify the factual contentions of the assessee w.r.t. the comparability analysis of the comparables selected/rejected by the Id. TPO. 37. That the Ld. TPO and consequently the Id. AO have erred in ignoring the fact that the AEs of the assessee have been incurring losses. Therefore, there is no profit shifting by the assessee to its AEs by virtue of the transaction under consideration and hence no ALP adjustment is warranted on the same. 38. That the Id. TPO has failed to appreciate that assessee's SBG division PLI [OP/OC] @18.86% is same for AE sales of hybrid seeds which is only ₹11.38 Crores and non-AE sales of hybrid seeds which is around 400.27 Crores and thus AE sales are ALP under internal TNMM as well. 39. That the Ld. TPO and consequently the Id. AO have erred in law and on the facts & circumstances of the assessee's case by not following the rule of consistency as regards to the selection of filters and benchmarking process in respect to the aforementioned international transaction of sale of hybrid seeds. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 73 40. It is prayed before the Hon'ble ITAT that adjustment made by the Ld. TPO/AO in respect of sale of hybrid seeds may kindly be deleted by upholding the assessee's approach determination of ALP. Interest on Loan Given-Adjustment of NIL 41. Without prejudice to the fact that adjustment made on account interest income on foreign currency loan granted to the AE has been deleted following the Id. DRP directions [ being a rectification of apparent mistake), the Id. DRP/TPO and consequently the Id. AO have erred on principle in imputing the adhoc interest rate @LIBOR+400 basis points and rejecting the interest charged by the assessee @ LIBOR+350 basis points i.e. 4.72% on foreign currency loan granted to its AE [Subsidiary- Bioseed Holding PTE Ltd.]. 42. The Ld. TPO and consequently the Ld. AO have erred in imputing the above ad-hoc interest rate by: a) disregarding, without affording any cogent reason, the comparability analysis carried out by the assessee in its TP study which is based on the RBI Master Circular and OECD guidelines. b) not appreciating that assessee's interest rate is at ALP having regard to the internal comparable uncontrolled prices (CUP) data available at LIBOR+220 basis points being interest rate charged by IFC and LIBOR+145 basis points being interest rate charged by SCB from the assessee. c) ignoring the settled judicial position on the issue which have held that 'LIBOR only without any spread is an appropriate benchmark for the purpose of benchmarking foreign currency loans to AEs. 43. The Id. TPO and consequently Id.AO have erred on the facts and in law in imputing adhoc interest rate @ LIBOR+400 basis points i.e. 6.49%, without providing any basis to arrive at such rate in the show cause notice issued by him. 44. That the Ld. TPO and consequently the Ld. AO has erred in law and on facts and in circumstances of the case in erroneously justifying the rate of LIBOR+400 bps directly in its order by making reference to arbitrary parameters like credit ratings, country risk premium, miscellaneous factors etc. 45. That the Ld. TPO and consequently the Id. AO have erred in ignoring the fact that the assessee has earned interest income on loan granted to its AE, while on the other hand the AE has been incurring losses. Therefore, there is no profit shifting to its AE by virtue of this transaction and hence no variation of benchmark interest rate is warranted on the same. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 74 46. That the Ld. TPO and consequently the Ld. AO have erred in law and facts and in circumstances of the case in not following the rule of consistency ignoring that same methodology has been consistently followed by the assessee for past many years, which has been accepted by the revenue in past. 47. That the Ld. TPO and consequently the Ld. AO have erred in making the factual computational error apparent from records by considering the LIBOR rate from globalrates.com @ 2.49% which relates to FY 2018-19 (instead of correct LIBOR rate of 1.475% which pertains to current FY 2017-18). 48. It is prayed that the Hon'ble ITAT may be pleased to pass the following order: a. That 'LIBOR only' is the appropriate interest rate to benchmark the transaction of foreign currency loan granted to the AE. b. Without prejudice, to the above, the assessee's approach of computing the interest income by considering interest rate @ LIBOR+350 basis points i.e. 4.72% meets the arm's length principle. Interest on Receivables- Adjustment of ₹28,28,330/- 49. That the Id. DRP/TPO and consequently the Id. AO has erred in law and on facts and circumstances of the case in making an adjustment of 28,28,330/- on the ground that interest income offered by the assessee @ 4.75% on outstanding receivables from AEs does not meet the arm's length principle. 50. That the Id. DRP/TPO and consequently the Id. AO have erred in making the above adjustment by disregarding the credit period offered by the assessee to its AEs at 175 days from date of invoice and instead taking a credit period of 60 days only which is unjustified and unreasonable and against the rule of commercial expediency. 51. That the Id. TPO and consequently the Ld. AO have erred in ignoring the fact that interest cost for a period of 6 months has already been factored by the assessee while computing the sale price for sale of hybrid seeds to its AEs and thus no benefit has been provided to the AEs by way of delay in receipt of outstanding receivables. 52. That the Id. TPO and consequently the Ld. AO has erred in making the adjustment in respect of receivables ignoring that the said transaction is intrinsically connected and subsumed in transaction of sale of hybrid seeds itself which has already been benchmarked and examined under TNMM and thus no separate adjustment on account of interest on receivable is warranted under the law. 53. That the Id. TPO and consequently the Ld. AO have erred in not appreciating: ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 75 a) that the assessee has a granted the credit period of 175 days or more to both AEs and the third parties; and b) that the assessee has not been charging interest on account of delay in receipt of outstanding receivables from third parties wherein the delay in receipt of payment is much higher as compared to the delay in case of AEs. 54. The Ld. TPO and consequently the Ld. AO have erred in making such an adjustment by: a) disregarding the comparability analysis carried out by the assessee in its TP study which is based on the RBI Master Circular and OECD guidelines, without affording any cogent reason. b) ignoring the settled judicial position on the issue which have held that 'LIBOR only without any spread is an appropriate benchmark for the purpose of benchmarking interest on receivables from its AEs. 55. The Id. TPO and consequently the Id. AO have erred on the facts and in law in imputing ad-hoc interest rate @ LIBOR+400 basis points i.e. 6.49%, without providing any basis to arrive at such rate in the show cause notice issued by him. 56. The Ld. TPO has erred in law and facts and in circumstances of the case in erroneously justifying the rate of LIBOR+400 bps directly in its order by making reference to arbitrary parameters like credit ratings, country risk premium, miscellaneous factors etc. 57. That the Ld. TPO and consequently the Id. AO have erred in ignoring the fact that the assessee has earned interest income on delayed receipt from outstanding receivables from its AE, while the said AEs have been incurring losses. Therefore, there is no profit shifting to its AE by virtue of this transaction and hence no ALP adjustment is warranted on the same. 58. That the Ld. TPO and consequently the Ld. AO have erred in law and facts and in circumstances of the case without appreciating the fact that the same methodology has been followed by the assessee for many previous years, which has been accepted by the department in past. 59. The Ld. TPO and consequently the Ld. AO have erred in making following factual computational errors which are apparent from records while working out the adjustment of interest on receivables from its AE: a) the Ld. TPO has also considered the delay pertaining to preceding year/succeeding year and hence computed the interest wrongly for the said extended period ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 76 b) the Ld. TPO has considered the LIBOR rate from globalrates.com @ 2.49% which relates to FY 2018-19 (instead of correct LIBOR rate of 1.475%which pertains to current FY 2017-18). 60. It is prayed before Hon'ble ITAT that adjustment made in respect of Interest on delayed payment of receivables may kindly be deleted by upholding the assessee's approach of charging interest on receivables from AEs above the LIBOR rate at ALP. GROUNDS OF OBJECTIONS AGAINST CORPORATE TAX ISSUES Additional disallowance u/s 14A-28,70,000/- 61. The Ld. AO has erred in law and in facts and in the circumstances of the case in making an additional disallowance to the tune of ₹8,70,000/- u/s 14A of the Act r.w.r 8D(2)(ii) without issuing any show cause notice and also in contravention of statutory procedure laid down in clause (xvi)(b) of sub-section (1) of section 144B of the Act r.w. sub-section (9) that section. On merits-without prejudice to above 62. The Ld. AO has erred in law and in facts and in the circumstances of the assessee by making additional disallowance u/s 14A of the Act r.w.r. 8D(2)(ii), to the tune of 8,70,000/- based on the assumption that some kind of expenditure has to be incurred to carry out the investment activities and earning exempt income which is wholly untenable in law and based on conjectures and surmises. 63. The Id. AO has failed to appreciate that assessee has already disallowed an amount of ₹7,30,000/- u/s 14A of the Act and no further disallowance is warranted under the said provision. 64. The Ld. AO has while upholding/enhancing disallowance u/s 14A of the Act r.w.r 8D(2)(ii) of the Income Tax rules, erred in disregarding the fact that no expenditure is disallowable, as assessee's own interest free funds/surplus funds are much more than the amount of investments. 65. The Ld. AO has erred in making the above disallowance u/s 14A of the Act by not following the Judgment of Hon'ble Jurisdictional High Court in assessee's own case for the AY 2008-09, Hon'ble ITAT's order for the AY 2010-11 and Hon'ble CIT(A)'s order for AY 2011-12, AY 2013-14 and AY 2015-16 all in favour in assessee's own case. 66. That the Id. AO has erred in law and on facts and circumstances of the case in not following the binding directions of the Id. DRP by not deleting the aforesaid disallowance as according to the best of the knowledge of the assessee no intimation of filing any appeal before the Hon'ble High Court has been received and further по records of filing such an appeal is available on the official website of Delhi High Court till the passing of the order dated 30th August, 2022 by the Id. AO. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 77 67. It is prayed before Hon'ble ITAT that additional disallowance u/s 14A r.w.r.8D(2)(ii) by the Ld. AO may kindly be deleted. Addition to Books profits u/s 115JB-adjustment of₹ 8,70,000/- 68. That the Ld. AO has erred in law and in facts and circumstances of the case by making an addition of ₹8,70,000/- to the book profits u/s 115JB on account of enhanced disallowance u/s 14A of the Act. 69. That the Id. AO has erred in law and on facts and circumstances of the case in not following the binding directions of the Id. DRP by not deleting the aforesaid addition as according to the best of the knowledge of the assessee no intimation of filing any appeal before the Hon'ble High Court has been received and further no records of filing such an appeal is available on the official website of Delhi High Court till the passing of the order dated 30th August, 2022 by the Id. AO. 70. It is prayed before the Hon'ble ITAT to delete above addition of 8,70,000/-by Ld. AO to the book profits of the assessee. Addition u/s 50C-adjustment of 98,05,125/- 71. The Ld. AO has erred in law and in facts and in the circumstances of the case in making an addition to the tune of ₹98,05,125/- u/s 50C of the Act without issuing any show cause notice providing and also in contravention of statutory procedure laid down in clause (xvi)(b) of sub-section (1) of section 144B of the Act r.w. sub-section (9) that section. On merits-without prejudice to above 72. The Ld. AO has erred in law and in facts and in the circumstances of the case by making an addition to the tune of ₹98,05,125/- u/s 50C of the Act, by substituting the sale consideration of two lands with their stamp duty values on illegal and erroneous grounds. 73. The Ld. AO has erred in law and in facts and in the circumstances of the case by considering the valuation as made by the stamp value authorities, which is merely a prima facie rate and can only be a starting point of an inquiry but the same cannot be a sole concluding reason for making addition u/s 50C of the Act. 74. That the assessee hereby objects before the Hon'ble ITAT, the action of Id. AO of adopting the stamp duty value of lands as their full value of consideration u/s 50C of the Act against their actual sale consideration which should also be treated as arm's length price as the lands have been sold to independent third parties only. 75. Without prejudice, the ld. AO has erred in law in making the above addition u/s 50C without referring the valuation of lands to valuation officer in accordance with the provisions of section 50C(2) of the Act. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 78 76. That the Id. AO has erred in law and on facts and circumstances of the case by sustaining the above addition merely to keep the issue alive by blindly following the order of preceding year without carrying out any independent enquiry or without referring the matter to the valuation officer to determine the fair market value of the property. 77. That the Id. AO has erred in law and on facts and circumstances of the case in not following the binding directions of the Id. DRP by not deleting the aforesaid addition as according to the best of the knowledge of the assessee no intimation of filing any appeal before the Hon'ble High Court has been received and further no records of filing such an appeal is available on the official website of Delhi High Court till the passing of the order dated 30th August, 2022 by the Id. AO. 78. It is prayed before Hon'ble ITAT that addition u/s 50C of the Act made by the Ld. AO may kindly be deleted. Addition on account of notional Interest- 8,73,37,548/- 79. The Ld. AO has erred in law and in facts and in the circumstances of the case in making the addition of 8,73,37,548/- being notional interest without issuing any show cause notice and in contravention of statutory procedure laid down in clause (xvi)(b) of sub-section (1) of section 144B of the Act r.w. sub-section (9) that section. 80. Without prejudice to above, the Ld. DRP/AO has erred in ignoring the fact that such interest income has not been recognized by the assessee due to inherent uncertainty in realization of such income which is in accordance with the recognized principles of accounting of income. 81. It is prayed before Hon'ble ITAT that the addition made by the Ld. AO in relation to interest income not recognized by the assessee may kindly be deleted. Addition on the basis of undisclosed sale (mismatch in form 26QB)- 1,57,80,000/- 82. The Ld. AO has erred in law and in facts and in the circumstances of the case in making an addition of ₹1,57,80,000/-on the basis of mismatch between sale of property reported in ITR and reflecting in form no. 26QB without issuing any show cause notice and in contravention of statutory procedure laid down in clause (xvi)(b) of sub-section (1) of section 144B of the Act r.w. sub-section (9) that section. 83. That the Ld. AO has erred in law and in facts and in the circumstances of the case in making the ad-hoc and arbitrary addition in respect of above mismatch solely on the basis of amount reflected in the Form no.26QB and in complete disregard to the assessee's submission that based on the records there is no such ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 79 sale of captioned land by the assessee during the year under consideration. 84. That the Id. DRP/AO has erred in law in not making the further enquiries after the assessee's submissions and further failed to provide the relevant information and documentary evidences in relation to sale of captioned land to the assessee for rebuttal. 85. That the Id. AO has erred in law and the facts and circumstances of the case by not considering the submissions of the assessee and by not passing a speaking order inspite of the specific binding directions of the Id. DRP vide para no. 4.14.1 w.r.t. in this regard. 86. It is prayed before Hon'ble ITAT that the ad-hoc addition made by the Ld. AO for mismatch between ITR and Form no.26QB may kindly be deleted. ADDITIONAL CLAIMS RAISED BEFORE HON'BLE DRP Allowance of Foreign tax Credit-18,27,359/- 87. That the Id. DRP and consequently the Id. AO has erred in law and in facts and circumstances of the case in rejecting the assessee's claim of foreign tax credit (FTC) amounting to 18,27,359/- solely on the technicality of the issue that since claim does not fall in the category of 'variation made by the AO' no intervention of the Id. DRP at this stage is called for. 88. That the Hon'ble ITAT may be pleased to grant an claim of foreign tax credit (FTC) amounting to 18,27,359/- against the tax liability of the assessee u/s 90 of the Act, which had not been claimed and granted to the assessee due to late deduction and deposit of the same by the deductor. The said FTC pertains to the interest income receivable by the assessee from its subsidiary company- Bioseed Holdings Pte, Singapore for the AY 2018-19. Penalty 89. The Ld. AO has erred in law & circumstances of the case by initiating penalty proceedings u/s 270A of the Act. Others 90. The aforesaid grounds of appeal are without prejudice to one another. 91. The assessee craves leave to add, amend, alter, change vary or substitute any of the aforesaid grounds or raise an additional ground if it becomes necessary to do so in the interest of justice.” 71. Ground No.1 to 3 and 89 to 91 are general in nature, hence dismissed. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 80 72. Ground Nos. 4 to 9 raised by the assessee are in respect of the deficiencies in the draft assessment order and final order with respect to name, PAN etc. since they were not pressed by the assessee therefore, same are dismissed. 73. Ground Nos. 10 to 12 raised by the assessee are in relation to the adjustment made by the CPC in the order passed u/s 143(1) of the Act on account of dividend from mutual fund claimed as exemption u/s 10(35) of the Act of INR 1,03,10,987/- and further not allowing the deduction u/s 43B of the Act of INR 45,04,47,576/-. 74. Before us, Ld.AR for the assessee submits that the return of income was processed by the CPC u/s 143(1) of the Act wherein these two adjustments were made however, no reason was given with respect to such adjustments. Ld.AR drew our attention to the computation of income available at pages 70 to 74 of the Paper Book wherein the assessee has claimed deduction of INR 1,03,10,987/- on account of dividend income claimed exempt u/s 10(35) of the Act being earned on the units of mutual funds. Ld.AR further submits that the assessee in the return of income filed has claimed deduction towards the payment made on statutory dues liable u/s 43B of the Act which are as under:- Nature of Item Amount (In Rs.) Cane Purchase Tax 1,41,17,189/- Excise Duty 39,84,81,896/- Water Cess 19,92,876/- ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 81 Bonus 3,58,55,281/- Entry Tax 335/- 75. He thus prayed that the disallowance was made without providing any reason for making such addition/disallowance. Ld.AR for the assessee also submits that the ld. DRP has directed the AO to allow the claim after making verification of the same. However, the AO simply stated that no details were filed by the assessee and therefore, dismissed the claim of the assessee. Ld.AR therefore, requested to delete the disallowance so made by the CPC. 76. On the other hand, Ld. CIT DR for the Revenue supports the order of the lower authorities and submits that the assessee has not provided any details of actual date of payments of statutory dues nor the details of the dividend income was filed to claim that the said dividend was received from mutual funds and thus exempt u/s 10(35) of the Act. 77. Heard both the parties and perused the material available on record. From the perusal of the computation of income and return of income filed, it is seen that the assessee has specifically claimed the exemption of dividend u/s 10(35) of INR 1,03,10,987/-. In the computation of income, a note to this effect was also given. Further, in Note No.22 of the financial statement, income under the head “dividend income on short term investment” at INR 1.03 crores was disclosed which is evident from Paper Book at page 23. Admittedly, the dividend was received on mutual funds therefore, the same is exempted u/s 10(35) of the Act. Accordingly, we direct ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 82 the AO to delete the addition so made to the total income of the assessee. 78. With regard to the disallowance of INR 45,04,47,576/- made u/s 43B, it is seen that the assessee has claimed deduction of the said amount on payment basis however, no details of actual date of payment and the proof of payments were filed before the lower authorities therefore, in the interest of justice and to provide one more opportunity to the assessee, this issue is remitted back to the file of the AO with the direction that the same be allowed in accordance with law after making necessary verification of actual dates of payments. The assessee is directed to file all the necessary evidences in respect to the claim made in this regard. Hence, Ground Nos. 10 to 12 raised by the assessee are partly allowed as discussed. 79. Ground Nos.13 to 22 raised by the assessee are with respect to the deduction of section 80IA of the Act on transfer of power from eligible unit to non-eligible unit amounting to INR 70,40,57,860/-. 80. Heard both the parties and perused the material available on record. This issue has came up before us in Revenue’s appeal for AY 2015-16 in assessee’s own case in ITA No.927/Del/2022 wherein by following the judgement of Hon’ble High Court in ITA No.566/Del/2023 dated 21.01.2025, wherein the Hon’ble Jurisdictional High Court upheld the order of the Co-ordinate Bench of the Tribunal in ITA No.7632/Del/2018 for AY 2014-15. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 83 Thus, by following the observations made therein, we allow Ground Nos. 13 to 22 of the assessee and direct the AO to allow the deduction u/s 80IA of the Act of INR 70,40,57,860/- being the amount of deduction claimed towards sale of electricity from eligible units to non-eligible units. 81. Ground Nos.23 to 28 raised by the assessee are in relation to the adjustment made by AO/TPO of INR 98,20,41,276/- in respect of specified domestic transaction of transfer of steam by eligible units to non- eligible units wherein the assessee has taken transfer price at cost however, the TPO/AO has treated the ALP/cost of production at NIL into the reduction to such extent in the deduction claimed under section 80 IA of the Act. 82. We have heard the rival contentions and perused the material available on record. Similar issues has come up for consideration before us in Revenue’s appeal for AY 2015-16 in ITA No.927/Del/2022 wherein by following the judgement of Hon’ble Co-ordinate Bench of the Tribunal in assessee’s own case for AY 2014-15 wherein the Co-ordinate Bench has held that the steam is not a by-product but a joint product and has some value therefore, cost of production cannot be taken as NIL and thus, the deduction claimed under section 80 IA on the transfer price charged by the eligible units to non-eligible units was held as allowable. This order of Co-ordinate Bench in AY 2014-15 was got confirmed by the Hon’ble Jurisdictional High court wherein Hon’ble High Court vide order dated 02.05.2024 in ITA No. 566/2023 has held that it is a pure question of fact and no substantial question of law is involved ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 84 in this issue. Accordingly, the Hon’ble High Court has not admitted the Revenue’s appeal against such observations of the Co-ordinate Bench of the Tribunal. In view of these facts, the issue of allowability of deduction u/s 80IA of the Act on transfer of steam from eligible unit to non-eligible unit stood settled in assessee’s own case and by following same observations in Revenue’s appeal for AY 2015-16 in ITA No.927/Del/2022, was dismissed by us herein above. 83. In view of these facts and by respectfully following the findings made in Revenue’s appeal for AY 2015-16 in ITA No.927/Del/2022, Ground Nos.23 to 28 of the assessee are allowed. 84. Ground Nos.29 to 32 taken by the assessee are in relation to the additional / revised claim of deduction u/s 80IA of the Act on the transfer of steam from eligible units to non-eligible units. The issue in hand is common with the issue taken in AY 2016-17 with a difference that in the year under appeal, the assessee has made additional / revised claim of deduction u/s 80IB before the TPO during the course of assessment proceedings which was dismissed by the TPO and assessee’s objections were dismissed by Ld. DRP whereas in AY 2016-17, the claim was made for the first time before the Tribunal by taking additional grounds of appeal and by following the additional evidences. As the facts for claiming enhanced deduction are identical with the facts of AY 2016-17 thus, by following the observations made therein in this year also, we set aside the issue to the file of AO for making necessary verification of ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 85 the claim of the assessee and allow the same in accordance with law. Accordingly, Grounds of appeal Nos. 29 to 32 raised by the assessee are partly allowed for statistical purposes. 85. Grounds of appeal Nos.33 to 40 raised by the assessee are in relation to transfer pricing adjustment of sale of hybrid seeds. The assessee has benchmarked the transactions by using TNMM as most appropriate method with combined PLI of Shri Ram Bio Seeds and Generic Bio Seeds Research India at 6.51%. The TPO has rejected the approach of the assessee by observing that the assessee has not used appropriate filters and conducting its own search by modifying the filters and determined the ALP at 20.52% PLI resulting into adjustment of Rs. 1,49,75,000/-. The TPO has rejected three comparables taken by the assessee and had inserted six additional comparables. Against this order, assessee filed abjections before the ld. DRP, who though upheld the filters applied by the TPO for selection of comparables and however, has directed the TPO for making fresh working according to which the TPO has reworked out the adjustments on sale of hybrid seeds of INR 14,17,000/- as against INR 1,49,75,000/- made in the order passed u/s 92CA(3) dated 29.07.2021. 86. Before us, Ld.AR for the assessee submitted that the TPO has rejected the comparables selected by the assessee by applying incorrect filters and further submits that the TPO has not followed the directions given by Ld. DRP wherein the ld. DRP has directed the TPO to consider the comparables taken by the assessee and ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 86 verify the factual contention regarding net worth and also functional comparison and then decide this issue afresh. For this, he placed reliance on the judgment of Co-ordinate Bench of ITAT, Delhi in the case of Olympus Medical Systems India Pvt. Ltd. vs DCIT, Circle- 3(1), Gurugram reported in TS-14-ITAT-2020 (Delhi)-TP and further in the case of L.G. Electronics INC (Page - 50) reported in TS-68-ITAT-2022 (Delhi)-TP. With regard to the rejection of comparables taken by the assessee by the TPO, the assessee has made detailed submissions at page 51 to 57 of the WS filed before us wherein the main contention of the assessee is that the approach of TPO in rejecting the comparables is not based on the actual facts of the case. Ld. AR for the assessee further submits that TPO has considered the wrong PLI and therefore, requested for exclusion of the comparables included by the TPO. 87. On the other hand, Ld. CIT DR supports the order of the TPO and submits that in para 9.3 of TPO’s order, he has given detailed reasons for rejection of the comparables taken by the assessee and further provided the reasons for inclusion of the fresh comparables. The ld. CIT DR thus requested for the confirmation of the adjustment made which has already been reduced substantially in terms of the directions given by the ld. DRP. He requested accordingly. 88. Heard the contentions of both the parties and perused the material available on record. In the instant case, the assessee while computing the ALP, followed the TNMM with OP/OC as most ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 87 appropriate method for ascertaining the ALP of sale of Hybrid seeds and the margin was shown at 6.51 %. The assessee has applied the filters which were partly accepted by the TPO and TPO has further applied additional filters for choosing final set of comparables. The assessee has taken seven comparables out of which TPO has rejected three comparables and further added six comparables and accordingly after final set of comparables of 10 companies, the median margin of 20.52% was taken and proposed the total adjustments of INR 1,49,75,000/-. Thereafter, the ld. DRP while disposing off the objections raised by the assessee, confirmed the filters applied by the TPO and direct the TPO to consider the factual submissions to ascertain that the relevant data has been taken into consideration to arrive at the correct PLI of OP/OC under Hybrid seeds segment sought to be benchmarked based on the filters applied by the TPO. In compliance to such directions, the TPO has corrected the margins and as against the proposed adjustment of INR 1,49,75,000/-, the same is reduced to INR 14,17,000/-. It is relevant to state that before us, the main thrust of the assessee is with regard to the exclusion of three comparables taken by the assessee in its TPSR. The ld. AR for the assessee submits that the TPO while rejecting the these comparables had observed that either the comparables had failed the filters applied by the TPO or functionally not comparable. We thus discuss whether the comparable selected by the assessee could be included in the final set of comparables which is as under:- ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 88 (i) Basant Agro Tech (India) Ltd. The TPO has rejected this comparable as it has failed net worth filter. It was the contention of the assessee that as per financial statement of the company, it could be seen that the company has positive net worth in preceding as well as in succeeding years. In this regard, the table of net worth of the year under appeal in the preceding and succeeding years is as under:- Financial Year Net Worth [Amount (Rs.) in Crore] 2015-16 99.6 (PB P.No.978) 2016-17 104.56(PB P.No.980) 2017-18 110.64 (PB P.No.982) 2018-19 117.31 (PB P. No.984) 2019-20 126.15 (PB P.No.986) Since the company M/s Basant Agro Tech (India) Ltd. has positive net worth and also the same is accepted suitable comparison for benchmarking the transaction in subsequent AY. Under these circumstances we find no reason to exclude the same from the final set of comparables accordingly, we direct the AO/TPO to include this company as a suitable comprable. (ii) Maharastra Hybrid Seeds Co.Ltd. This comparable was rejected by TPO for the reason that it had failed in PBT (“profit before tax”) filter since the said company is in losses consistently. In this regard, the Ld.AR drew our attention to the financial statements of the company available in Paper Book pages 988 to 990 according to which, in the year under appeal, the company is having profit before taxes of INR 8.07 crores in FY ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 89 2016-17 which is 1.82 % of the sales. Further, it is seen that in the year under appeal and in FY 2015-16 relevant to YA 2016-17, the company was in losses and therefore, we are not in agreement with the contention of the assessee that this company is to be included in the final set of comparable accordingly, we find no infirmity in the order of AO/TPO to exclude the same from the final set of comparables. (iii) Metahelix Life Science Ltd. (Now Rallis India Ltd.) The TPO has rejected this comparable by holding that it is not functionally comparable. In this regard, Ld. AR drew our attention to page 998 of Paper Book which is the financial statement of Rallies India Ltd. wherein in Note No.43 of the financial statement for the year ended on 31.03.2018, the function of the company of the Seed Division is stated. According to it, the company is having identical product line of hybrid seeds and also engaged in production, R&D and activity of marketing seeds. The turnover of the bio-seeds segment is also at similar level if compared with the assessee. In view of these facts, in our considered opinion, this company could be included in the final set of comparables. Accordingly, we direct to include this company in the final set of comparables. 89. With the above directions for the inclusion of two more companies in the final set of comparables, we direct the AO to re- compute the PLI (OP/OC) to benchmark the transactions and worked out the amount of ALP on sale of hybrid seeds. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 90 90. In view of above discussion, Ground Nos. 33 to 40 raised by the assessee are partly allowed. 91. Grounds of appeal Nos. 41 to 48, in these grounds, the assessee has challenged the action of the AO/TPO in making adjustment on account of interest on income on foreign currency where the assessee has charged interest @ LIBOR + 350 basis point as against which the AO/TPO applied LIBOR + 400 basis points. 92. The assessee in its grounds and further the chart given during the course of hearing stated that there is NIL adjustments made on this issue after the order of the Ld. DRP and no specific submission is made on this ground in the year under appeal therefore, the captioned grounds of appeal taken by the assessee are dismissed. 93. Grounds of appeal Nos. 49 to 60 raised by the assessee are in respect of the interest on receivables. 94. The assessee has benchmarked the transactions using other method as most appropriate method for benchmarking. As per the assessee, it has sold hybrid seeds on a credit period of 175 days based on acceptable market practice following in this line of trade and charged interest @ 4.75 % on receivable where the delay is over and above 175 days, as mutually agreed. During the year, the assessee has received INR 57,97,251/- on such outstanding receivables however, the TPO instead of 180 days has taken the period of 30 days for computing the delay. Ld. DRP while deciding ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 91 the objections raised by the assessee has directed the TPO to use LIBOR + 400 basis points as benchmark rate for computing interest on receivables and further directed to take credit period of 60 days as against 30 days taken by the TPO. Accordingly, the TPO has computed the adjustment of INR 28,28,330/-. The ld. AR submits that the TPO has taken incorrect LIBOR of 2.49% which is applicable for year 2018 whereas the correct rate was 1.37% prevailing in the year under consideration. For this, he referred the TP study report wherein the average rate is taken at 1.37% as LIBOR rate of FY 2017-18. Regarding the credit period, the assessee contended that the credit period was allowed at 60 days by Ld. DRP whereas in assessee’s own case for AY 2020-21, the credit period of 175 days has been accepted by the TPO itself. 95. Ld.AR further submits that the credit period should be considered as stated in the invoices raised. Ld. AR also contended that the assessee has not charged interest from independent third party and outstanding receivables whereas charged interest @ 4.75% from its AE thus, no adjustment is required to be made. He placed reliance on various judgements which are as under:- i. DHR Holding India Pvt Ltd [TS-30-ITAT-2022 (DEL)-TP] ii. Lily Jewellery Pvt. Ltd [TS-70-ITAT-2021 (Mum)-TP] iii. WNS Global Services Pvt Ltd [TS-131-ITAT-2020(Mum)-TP] iv. Gitanjali Exports Corporation Limited [TS-192-ITAT-2016(Mum)-TP] v. Dania Oro Jewellery Pvt Ltd [TS-349-ITAT-2020(Mum)-TP] vi. S Vinodkumar Diamonds Pvt Ltd [TS-393-ITAT-2020(Mum)-TP] vii. Gimpex Pvt Ltd [Formerly known as GIMPEX Ltd.] [TS-705-ITAT- 2020(CHNY)-TP] ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 92 95. Ld.AR further submits that the assessee has already factored the benefit to the AE by way of delay payment on receivables while computing the cost of sale of hybrid seeds and thus no adjustment is required to be made. In this regard, he placed reliance on the judgement of Hon’ble Jurisdictional High Court in the case of Kusum Health Care Pvt.Ltd. reported in TS-412-SC-2017 (Del)- TP. In the last, he submits that in the case of group concerns, M/s. SRF Ltd., this issue has been decided in favour of the assessee by the Co-ordinate Bench in AY 2010-11 in ITA No.356/Del/2015 and in ITA No.6620/Del/2018 for AY 2014-15 and thus requested for deletion of the adjustment made. 96. On the other hand, Ld. CIT DR for the Revenue supported the order of the lower authorities and submits that the DRP has already allowed the net of receivable and payables. He further submits that the currency devalued on year to year basis and therefore, taken LIBOR +400 points is justified. Ld. CIT DR further submits that the TPO has taken the basis as per credit rating and thus, he relied upon the order of TPO in this regard and requested for the confirmation of the adjustment made. 97. Heard both the parties and perused the material available on record. The claim of the assessee is that it had not charged interest from independent parties on receivables whereas interest is charged from AEs on outstanding receivables. It is further claimed that the necessary adjustments has already been made in the cost of sale of hybrid seeds. Hon’ble Delhi High Court in the case of CIT Vs. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 93 Kusum Helathcare Pvt. Ltd. reported in 398 ITR 66 (Delhi) after considering these facts has held as under:- (i) The inclusion in the Explanation to Section 92B of the Act of the expression \"receivables\" does not mean that de hors the context every item of \"receivables\" appearing in the accounts of an entity, which may have dealings with foreign AEs would automatically be characterized as an international transaction, and (ii) With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-a-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re- characterized the transaction. 98. This view is further confirmed by the Hon’ble Delhi high court in the case of Avenue Asia Advisors Pvt. Ltd. vs. DCIT reported in 398 ITR 120 (Delhi). 99. Thus by following respectfully the judgement of Hon’ble Delhi High Court in the case of Kusum Health Care Pvt.Ltd. (supra) and further considering the fact that in preceding years, the Revenue has accepted benchmarking done by the assessee also considering the fact that no interest is charged from independent parties, we direct to delete the adjustment made on account of interest on receivable in addition to the interest income already disclosed by the assessee. Thus, Grounds of appeal Nos.49 to 60 raised by the assessee are allowed. 100. Grounds of appeal Nos.61 to 67 raised by the assessee are in relation to the disallowance made u/s 14A of the Act at INR ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 94 8,70,000/- and Grounds of appeal Nos. 68 to 70 are in relation to the adjustments in the book profit computed u/s 115JB of the Act on account of addition/disallowance made u/s 14A of the Act. 101. This issue has already been decided by us in assessee’s appeal for AY 2017-18 in ITA No.704/Del/2021 while disposing the Ground Nos. 6 to 10 wherein we followed the judgement of Hon’ble Jurisdictional High Court in assessee’s own case in ITA No.566/2023 for AY 2014-15. Thus, by following the observations made therein in AY 2016-17 in ITA No.704/Del/2021, we direct the AO/TPO to delete the addition of INR 8,70,000/- made u/s 14A of the Act and further directed to exclude the same from the computation of book profit for the purposes of charging of MAT. Thus, Grounds of appeal Nos. 61 to 70 raised by the assessee are allowed. 102. Grounds of appeal Nos. 71 to 78 are in relation to disallowance made u/s 50C of the Act at INR 98,05,125/-. 103. The addition has been made by the AO, being the difference between actual sale consideration and the value determined by stamp value authorities for charging stamp duty on the sale of two pieces of land situated in Pharenda and Salon wherein the difference was INR 59,28,125/- and INR 38,77,000/- respectively. The assessee claimed before Ld. DRP that the issue is squarely covered by the decision of Co-ordinate Bench of the ITAT in assessee’s own case for AY 2014-15 for which Ld. DRP has given directions that if the said order is not challenged before the higher ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 95 forums, the disallowance made be deleted. The AO in final assessment order observed that the issue pertaining to Section 50C of the Act. It is seen that AO while making the addition in final assessment order observed that in AY 2015-16, the issue has been set aside to the file of the AO by the Co-ordinate Bench of the Tribunal with the direction to refer the matter to DVO for determination of fair market value and the assessee was also directed to raise all the issues before the DVO about real character of the property. 104. Before us, Ld.AR for the assessee submits that the addition has been made without issue show cause notice and further by ignoring the fact that the actual price of land was less than the consideration received. It is further submitted by Ld. AR that the assessee has objected the valuation made by the Stamp Authority therefore, it is the duty of the AO to refer the matter for valuation to determine the FMV however, this has not been done. He thus requested that addition made deserves to be deleted. In the alternate, Ld. AR requested that the matter may be referred to DVO for determination of FMV as on the date of transfer. 105. On the other hand, Ld. CIT DR made no objection if the matter is sent back to the file of the AO with the direction to refer the DVO for determination of the FMV of the lands sold during the year. 106. Heard the contentions raised by both the parties and perused the material available on record. In the assessee’s own case for AY 2014-15, the Co-ordinate Bench of Tribunal in ITA No. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 96 7326/Del/2018 has sent back the issue to the file of the AO with a direction to refer the issue of determination of FMV as on the date of transfer of assets to DVO. AS admitted by both the parties, there is no change in the circumstances, thus, by respectfully following the decision of ITAT in ITA No.7362/Del/20218 for AY 2014-15, we set aside this issue to the file of AO with a direction to make reference to DVO for determination of FMV of both the pieces of land. The assessee is also directed to raise all the objections before the DVO/AO in this regard. The AO is further directed to decide this issue in accordance with law after obtaining the report from DVO. With these directions, grounds of appeal Nos. 71-78 raised by the assessee are allowed for statistical purposes. 107. Grounds of appeal Nos. 79 to 81 raised by the assessee are in respect of the addition made at INR 8,73,37,548/- as notional interest. 108. Facts involved in this case are that the assessee has given loan to its subsidiary company namely, M/s. Sri Ram Boiseed Ventures Ltd. and no interest was charged on the same. As there was uncertainty towards the recovery of interest therefore, the assessee has only recorded the amount of TDS made by the company on the interest payable to assessee and the principal amount of interest was offered for tax in the year when it was actually received. The objection of the assessee was dismissed by Hon’ble DRP by holding that interest must be accounted for on the accrual basis. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 97 109. Before us, Ld.AR for the assessee submits that the subsidiary company was incurring heavy losses and short of funds, therefore, the recovery of interest was doubtful. Accordingly, it was decided to account for the amount of TDS as income only which was received in the shape of tax credit. It is further submitted that the balance amount of interest was received in FY 2022-23 and offered for taxation in AY 2023-24 relevant to FY 2022-23 and therefore, taxing the same on accrual basis in the year under appeal would tantamount to double taxation of same income and thus, it is requested that the addition made deserves to be deleted. 110. On the other hand, Ld. CIT DR for the Revenue vehemently supports the order of the lower authorities and submits that interest was booked by the payee company and TDS was deducted and therefore, it is the duty of the assessee to include the same in its income and therefore, he prayed for the confirmation of the order of the lower authorities. 111. Heard both the parties and perused the material available on record. The main contention of the assessee is that the interest income was offered for tax on receipt basis whereas the Revenue taxed the same on accrual basis. The assessee has duly offered the amount of TDS received by it as tax credit in this year and further stated the balance amount of interest was received in FY 2022-23 and the same was offered for tax in AY 2023-24 therefore, if the same is taxed in the year under appeal, it would be double taxation of income. Looking to these facts, we find force in the arguments of the assessee that an income should not be taxed twice. Once the ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 98 interest income is offered for tax in the year of receipt i.e. in AY 2023-24 and has been accepted by the department, same should not be included in the income for the year under appeal on accrual basis. Accordingly, the AO is directed to verify the claim of the assessee whether interest income was offered in AY 2023-24 and if the claim is found correct, no addition is required to be made in the year under appeal on account of interest on accrual basis. With these directions, Grounds of appeal Nos.79 to 81 raised by the assessee are partly allowed for statistical purposes. 112. Grounds of appeal Nos. 82 to 86 raised by the assessee are related to the addition of INR 1,57,80,000/- made towards mis- match in sales reported in ITR and as reflected in From 26QB. 113. Before us, Ld.AR for the assessee submits that the assessee has filed necessary re-conciliation before the AO and submits that no such transaction as reported in Form 26QB was carried out by the assessee. The addition was made without issuing show cause notice and further without considering the submissions made. Ld.AR further submits that Ld. DRP has directed the AO to consider the submissions of the assessee and decide the issue however, in final assessment order, the AO without making verification as directed by Ld. DRP, made the addition. With respect to the merits of the additions, Ld.AR submits that during the year under appeal, assessee had sold property situated at Village Raghupur, Salon for INR 2.20 crores which includes the consideration for both land and building. The assessee has already reported this transaction under the head “Income from Capital Gains” and paid due taxes thereon. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 99 Ld.AR further drew our attention to the addition made u/s 50C of INR 38,77,000/- being the difference between sale consideration and stamp value of the said property and thus submits that the AO has already considered this transactions however, made the addition which tantamount to double addition. Ld. AR, therefore, requested for the deletion of the addition. 114. On the other hand, Ld. CIT DR requested that the matter may be sent back to the file of the AO for necessary verification of the facts. 115. Heard both the parties and perused the material available on record. From the perusal of the details filed, it is seen that the AO has made the addition solely on the basis of difference reported in AIR between the sale price declared by the assessee and as appearing in 26QB statement. The AO has failed to consider the fact that the assessee has already disclosed this transaction of sale of property under the head ‘Income from capital gains’ and further addition u/s 50C was also made by the AO in respect of this property. Though apparently the claim of the assessee appears to be correct however, in the interest of justice, we direct the AO to verify the correctness of the claim made by the assessee and if it is found correct, no addition is required to be made. With these directions, Grounds of appeal Nos.82 to 86 raised by the assessee are allowed for statistical purposes. 116. Ground Nos. 87 to 88 raised by the assessee are in respect of the additional claim of foreign tax credit of INR 18,27,359/-. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 100 117. Before us, Ld.AR for the assessee submits that during the year under appeal, the assessee has received interest on loan given to its subsidiary company namely Bio Seeds Holding Pte, Singapore of INR 1.02 crores. The interest was duly recorded in the books of accounts and shown as receivable by the respective companies. As per the DTAA between India and Singapore, withholding tax @ 15% was required to be deducted by Singapore based company however, due to inadvertent mistake on the part of the Counsel of the subsidiary company, the tax was deposited delayed on 24.01.2020 and the certificate was issued on 03.02.2020. Since the assessee had filed its return of income for the impugned order u/s 139(1) much prior to 03.02.2020 and time limit f to file revised return u/s 139(4) was also expired, a request was made for allowing the credit through an application filed before the AO. The claim of the assessee was rejected by the AO and DRP by holding that the matter is pending before Ld. Pr. CIT. It is, therefore, requested by the Ld.AR that the claim of the assessee being genuine and delay is not caused for the default committed on the part of the assessee therefore, foreign tax credit deserves to be allowed. 118. Per contra, Ld. CIT DR for the Revenue submits that since the application filed by the assessee for condoning the delay is pending before Ld. Pr. CIT and therefore, the orders of the lower authorities in rejecting the claim is correct and he prayed accordingly. 119. Heard both the parties and perused the material available on record. From the submissions made, it is seen that the assessee ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 101 has duly accounted for the interest from subsidiary company and paid the taxes thereon. Thus, there is no dispute with regard to the treatment of interest received by the assessee from the subsidiary companies. The sole issue is with respect to the foreign tax credit of INR 18,27,359/- deducted by subsidiary company on this amount of interest. The delay in depositing the tax with appropriate authorities at Singapore was on account of inadvertent error on the part of the subsidiary companies and assessee has already moved an application for condonation of delay in filing TDS u/s 119(2)(b) of the Act before the ld. Pr. CIT and further placed reliance on the CBDT Circular No.9/2015. In view of these facts, we direct Ld. Pr. CIT to dispose-off the application filed by the assessee for condonation of delay in claiming foreign tax credit in accordance with law and allow the same if it is in accordance with law. With these directions, Ground Nos. 87 to 88 raised by the assessee are partly allowed for statistical purposes. 120. As a result the appeal filed by the assessee is partly allowed. ITA No.4328/Del/2024 (AY : 2020-21) [Assessee’s appeal] 121. The present appeal has been filed by the assessee against the final assessment order dated 24.07.2024 passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 [“the Act”] pertaining to AY 2020-21 arising out of the order of ld. Dispute Resolution Panel (DRP) dt. 30.06.2024. 122. Grounds of appeal Nos. 1 to 3 raised by the assessee are general in nature, require no adjudication. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 102 123. Ground of appeal No.4 raised by the assessee is in relation to the adjustments made in the intimation order passed u/s 143(1) of the Act wherein total adjustments of INR 4,80,80,77,340/- were made to the total income of the assessee by CPC without any basis. As there is no discussion about the adjustments made by CPC in the final assessment order before us. Further the assessee has challenged the intimation order passed u/s 143(1) of the Act separately before us in ITA No.1495/Del/2024. In view of these facts and considering that the issues raised in this ground are not borne out from the impugned order appealed by the assessee, the ground of appeal No. 4 taken by the assessee is dismissed. 124. Ground of appeal No.5 is with regard to the computation of tax as per the computation sheet forming part of the final order u/s 143(3). In this regard, we direct the AO to compute the tax and the interest thereon in terms of the income finally computed giving effect to the order of the Tribunal in the present appeal of the assessee. With this direction, Ground No.5 raised by the assessee is partly allowed. 125. Ground of appeal No.6 taken by the assessee is with regard to the adjustments reducing the amount of deduction u/s 80IA of the Act on account of transfer of power to eligible unit to non- eligible unit. 126. Heard both the parties and perused the material available on record. This issue has came up before us in Revenue’s appeal for AY 2015-16 in assessee’s own case in ITA No.927/Del/2022 ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 103 wherein by following the judgement of Hon’ble High Court in ITA No.566/Del/2023 dated 21.01.2025, wherein the Hon’ble Jurisdictional High Court upheld the order of the Co-ordinate Bench of the Tribunal in ITA No.7632/Del/2018 for AY 2014-15. Thus, by following the observations made by us in ITA no. 927/Del/2022, Ground No.6 of the assessee is allowed. 127. Ground No.7 taken by the assessee is in relation to the additional / revised claim of deduction u/s 80IA of the Act on the transfer of steam from eligible units to non-eligible units. The issue in hand is common with the issue taken in AY 2016-17 with a difference that in the year under appeal, the assessee has made additional / revised claim of deduction u/s 80IB before the TPO during the course of assessment proceedings which was dismissed by the TPO and assessee’s objections were dismissed by Ld. DRP whereas in AY 2016-17, the claim was made for the first time before the Tribunal by taking additional grounds of appeal and by following the additional evidences. As the facts for claiming enhanced deduction are identical with the facts of AY 2016-17 thus, by following the observations made therein in this year also, we set aside the issue to the file of AO for making necessary verification of the claim of the assessee and allow the same in accordance with law. Accordingly, Ground of appeal No. 7 raised by the assessee is partly allowed for statistical purposes. 128. Ground of appeal No.8 raised by the assessee is with respect to the interest on loan given. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 104 129. In this ground, the assessee has challenged the adjustment of INR 24,99,155/- made by the AO/TPO on account of interest on loans given. 130. Identical issue has been decided in assessee’s appeal for AY 2018-19 while deciding Ground No.41 to 48 in ITA No.2587/Del/2022 for AY 2018-19, we have deleted the adjustment made. As admitted by both the parties that there is no change in the circumstances, thus, by following the same observation ground of appeal No. 8 is decided in favour of the assessee. 131. In Grounds of appeal No.9, the assessee has challenged the adjustment of INR 5,72,744/- on the interest on receivables made by the AO/TPO. 132. Identical issue has been decided by us in assessee’s own case of AY 2018-19 in ITA No.2587/Del/2022 wherein while adjudicating Ground Nos.49 to 60, we deleted the adjustments made by relying upon the judgement of Hon’ble High Court in the case of Kusum Health Care Pvt.Ltd. (Supra). As there is no change in circumstances, thus, by following the observations made in ITA No.2587/Del/2022 for AY 2018-19, the adjustment of INR 5,72,744/- is hereby deleted. The, Ground of appeal No.9 raised by the assessee is allowed. 133. Ground of appeal No.10, the assessee has challenged the disallowance of interest for non-deduction of tax at source of INR ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 105 47,73,07,262/- being 30% of the interest paid of INR 1,59,10,24,209/-. 134. Brief facts are that the assessee has claimed INR 1,59,93,84,217/- as finance cost in P&L Account. The AO by observing that the assessee has deducted tax at source only on the payment of INR 83,60,008/- and therefore, made the disallowance @ 30% on the remaining amount of INR 1,59,10,24,209/- in terms of the provision of section 40a(ia) of the Act. Ld. DRP sought for the Remand Report in the matter as the assessee claimed that the interest was paid to the financial institution on which TDS is not required to be made or the interest was paid against Government dues where TDS is not required to be made. However, Ld. DRP directed the AO to consider the submissions of the assessee and pass a speaking order. However, the AO in the final assessment order has made the disallowance without following the directions given by Ld. DRP and therefore, the assessee is in appeal before us. Ld. AR for the assessee submitted that at the fag-end of the proceedings in terms of the show cause notice issued, AO proposed to make such disallowance and assessee was not provided reasonable opportunity of being heard in the matter. It is further submitted by Ld.AR that the directions given by Ld. DRP were not followed by the AO. With regard to the merits, it is submitted that the interest was paid to the banks and financial institutions on the loans taken thus no TDS is required to be made on such payments and are out of purview of section 194A. Ld.AR further submits that this includes the sum paid for upfront fees and other charges and ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 106 also foreign currency transactions on which TDS is not deductible and therefore prayed for the deletion of the disallowance made. 135. On the other hand, Ld. CIT Dr for the Revenue supports the order of the lower authorities and requested to confirm the disallowance made. 136. Heard both the parties and perused the material available on record. From the perusal of the assessment order and the order of DRP, we find that the AO has not followed the directions given by Ld. DRP in this regard. The assessee has filed detailed chart of the item-wise payment made to various entities of gross amount of finance cost of INR 1,59,93,84,217/- as claimed in the Profit & Loss Account, which is as under:- ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 107 137. From perusal of the above chart, it is seen that most of the payments were made to the financial institutions. Besides this certain payment of interest was made towards the late payment of GST/custom duty. Assessee has deduction tax at source on the payments wherever applicable however, item-wise verification is not possible at this stage. Therefore, we direct the AO to verify the claim of the assessee in terms of the chart given herein above and decide this issue in accordance with law. With this direction, Ground of appeal No.10 raised by the assessee is partly allowed for statistical purposes. 138. Ground of appeal No.11 taken by the assessee is with regard to the addition of notional interest of INR 9,05,70,244/-. 139. The identical issue has been decided in assessee’s own case in AY 2018-19 in ITA No.2587/Del/2022 while deciding the assessee’s Ground of appeal Nos.79 to 81. 140. As there is no change in circumstances thus, by following the observations made therein, Ground of appeal No.11 raised by the assessee is allowed for statistical purposes with the same directions. 141. Ground of appeal No.12 is with regard to the addition of INR 6,42,00,000/- on account of sale of motor car. The AO made the addition on the basis of information available in insight portal according to which the assessee had sold motor vehicle at INR 6.42 crores. The assessee claimed that during the year, vehicles amounting to INR 5.81 crores were sold and the sale price was ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 108 reduced from the value of gross block of assets. Ld. DRP while disposing the objections raised by the assessee directed the AO to make necessary verification of the claim and decide the issue however, the AO has failed to make such verification and made the addition. 142. Ld.AR further submits that the show cause notice was issued at the fag end of the proceedings therefore, the necessary details could not be filed. Ld. AR further submits that as per insight portal, the details of INR 6.42 crores was with regard to the purchase of vehicles and however, assessee had sold the vehicles which fact was grossly ignored by the AO and therefore, requested for the deletion of the addition so made. 143. On the other hand, Ld.CIT DR for the Revenue stated that matter may be sent to the AO for necessary verification of the facts. 144. Heard both the parties and perused the material available on record. In this regard, it is seen that the AO claimed that the assessee has sold the vehicles whereas the claim of the assessee is that it had purchased the vehicles amounting to INR 6.42 crores. Therefore, in the interest of justice, the matter is set aside to the file of the AO for making necessary verification of the facts. The AO is directed to make necessary verification and decide this issue in accordance with law. Ground of appeal No.12 raised by the assessee is accordingly, partly allowed for statistical purposes. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 109 145. Ground of appeal No.13 taken by the assessee is with regard to the disallowance of INR 7,36,890/- made by invoking the provision of section 14A of the Act. 146. The Identical issue is decided by us in assessee’s appeal for AY 2016-17 in ITA No.704/Del/2021 wherein under identical circumstances, while deciding Ground Nos. 6 to 9 of the assessee, we have decided the issue in favour of the assessee. Thus, by following the same, Ground of appeal No.13 raised by the assessee is allowed. 147. Ground No.14 taken by the assessee is with regard to the addition on account of foreign exchange fluctuation of INR 6,85,505/-. 148. In this regard, Ld.AR submitted that while processing the return u/s 143(1) of the Act, the CPC vide its order dated 25.12.2021 has made addition of INR 17,29,52,164/- which includes loss on sale of fixed assets of INR 17,22,66,659/- and loss on foreign exchange fluctuation of INR 6,85,505/-. The assessee in order to avoid litigation, has accepted such disallowance however, in regular assessment u/s 143(3) of the Act, the AO further made this disallowance of INR 6,85,505/- thus, it is double addition. Accordingly, Ld.AR requested for the deletion of the same. 149. On the other hand, ld.CIT DR submits that the matter may be sent back to the file of the AO for necessary verification of the facts. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 110 150. Heard both parties and perused the material available on record. From the perusal of the intimation order passed u/s 143(1) of the Act, it is seen that the CPC has already made disallowance of INR 6,85,505/- however, the AO in final order without following the directions of Ld. DRP of making factual claim of double addition, made further disallowance of INR 6,85,505/-. Thus, it is double disallowance made both by the CPC and AO. 151. In view of these facts, we direct the AO to delete this disallowance being made twice. Ground of appeal No.14 raised by the assessee is accordingly, allowed. 152. Ground of appeal No.15 raised by the assessee is with respect to the addition of INR 7,36,890/- u/s 14A of the Act made in the book profits computed u/s 115JB for the purpose of charging MAT. 153. This issue has been decided by us in assessee’s appeal for AY 2016-17 in ITA No.704/Del/2021 wherein we direct the AO to delete this disallowance u/s 14A from the book profits computed for the purpose of MAT u/s 115JB of the Act. 154. Since there is no change in the circumstances, thus, by following the observations made in the order for AY 2016-17 in ITA No. 704/Del/2021, we direct the AO to delete the addition of INR 7,36,890/- from the book profits of the assessee. Accordingly, Ground of appeal No.15 raised by the assessee is allowed. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 111 155. Grounds of appeal Nos.16 to 19 are general in nature, need no adjudication. Hence, Ground Nos.16 to 19 raised by the assessee are dismissed. 156. In the result, appeal of the assessee is partly allowed. ITA No.1495/Del/2024 (AY : 2020-21) [Assessee’s appeal] 157. This appeal is filed by the assessee against the order of ld. Addl/JCIT(A)-5, Mumbai dismissing the appeal of the assessee vide order dated 06.02.2024 in Appeal No. ADDL/JCIT(A)-5 MUMBAI/10002/2019-20 arising out of the intimation order passed u/s 143(1) of the Act dated 25.12.2021 by CPC. 158. Brief facts of the case are that the assessee has filed its return of income for the year under appeal which was revised on 14.05.2021, declaring total income at INR 3,01,48,60,400/- under normal provision of Income Tax and book profits of INR 9,11,26,17,812/- u/s 115JB of the Act was declared. The return was processed by CPC vide intimation dated 25.12.2021 u/s 143(1) of the Act wherein the total income under normal provisions of Act was computed at INR 7,82,29,37,740/- as against the income of INR 3,01,48,60,000/- declared by the assessee resulting into creating of demand of INR 1,40,08,91,370/- as against the refund of INR 4,80,90,240/- claimed by the assessee. 159. Against the said intimation, the assessee has filed various rectification applications before the AO, NFAC and Jurisdictional Assessing Officer (“JAO”). The assessee also filed rectification ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 112 application against the draft assessment order wherein the AO while computing the income has taken the income as processed u/s 143(1) and thereafter, made further additions proposed in the draft assessment order to compute the final income of the assessee. The assessee also filed objections before Ld. DRP however, Ld. DRP without deciding the objections on merits, had given directions to AO for disposal of rectification applications of the mistakes apparent on record as pointed out by the assessee in the intimation order passed u/s 143(1) of the Act. However, the applications pending before the JAO were not dispose of nor the directions given by Ld. DRP were followed by JAO and final assessment order was passed on 24.07.2024 wherein while computing the total income of the assessee, the JAO has taken the income as computed u/s 143(1) and thereafter, proceeded to make further additions on various issues discussed in the order and accordingly the final income was computed at INR 9,53,46,75,062/-. The assessee filed a rectification application dated 06.08.2024 indicating the errors and re-iterated the facts that the rectification applications filed earlier remained pending and thus requested to rectify the order passed u/s 143(3) dated 24.07.2024. However, it is the statement at bar by the ld. AR for the assessee that such applications are not dispose of by the department till the date of hearing before us. With this background, the appeal of the assessee is heard on merits. 160. Before dwelling upon the issues taken by the assessee, we first discussed the mode and manner of disposal of appeal by the Additional/JCIT (A) in not accepting the appeal of the assessee. Ld. Additional/JCIT (A) in para 5 of impugned order dated 06.02.2024 ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 113 observed that the assessment in the case of assessee was picked up for complete scrutiny and draft assessment order was passed u/s 144C of the Act and therefore, the intimation order passed u/s 143(1) merged in the said order. It is further observed that subsequently when this draft assessment order has been considered and final assessment order u/s 143(3) r.w.s. 144C(13) of the Act was passed, the intimation order u/s 143(1) stood merged in the final order and does not survive under the Statute and therefore, the order u/s 143(1)(a) does not survive and appeal of the assessee against such order is not maintainable. For this, reliance was placed on the judgement of Hon’ble Supreme Court in the case of CIT vs Gujarat Electricity Board [2003] (Vol.260) 84 and the judgement of Hon’ble Madras High Court in the case of Tamilnadu Magnetise Ltd. vs The Commissioner of Income Tax, WP No.17819 of 2001 and the judgement of Hon’ble Kolkata High Court in the case of C.E.S.C. Ltd. vs DCIT [2003] ITR (Vol.262) 243. 161. Ld. CIT DR while supporting the orders of lower authorities submits that once the order is passed u/s 143(3) of the Act, there is no scope of any rectification of the order of CPC passed u/s 143(1) and therefore, he prayed that the order passed by Additional/JCIT deserves to be uphold. 162. On the other hand, Ld. AR submits that neither in the draft assessment order nor in the final assessment order, any discussion was made in respect of the adjustments made to the total income of the assessee as has been done in the order passed u/s 143(1) by ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 114 CPC. He drew our attention to both draft assessment order as well as to final assessment order where the AO starts computing the total income of the assessee by taking the figure of total income at Rs. 7,82,29,37,740/- i.e. the income computed in the intimation order passed u/s 143(1) and proceeded to make other additions / disallowances. Ld. AR thus argued that the assessee has left with no other option but to challenge the order passed u/s 143(1) by CPC separately. 163. In this regard, reliance is placed on the judgement of Co- ordinate Bench of Tribunal in the case of McAfee Software (India) Pvt. Ltd. vs DCIT in ITA No.110/Bang/2024 dated 10.05.2024 wherein under identical circumstances, the Hon’ble Bench while disposing the appeal has directed the assessee to file separate appeal for the order passed u/s 143(1) as there was no discussion of the issue on which the adjustments were made by CPC in the order passed u/s 143(1) of the Act. The facts of the present case are identical where CPC has made adjustment to the tune of INR 4,80,93,54,296/- however, as observed above, there is no whisper in the draft assessment order or in the final assessment order of these adjustment made by CPC. Further, the AO has not followed the directions given by Ld. DRP who in para 4.2.1 of the order while disposing objection No.4 directs the AO to verify the facts on record and rectify the mistake apparent from record, if any. However, till date no order was passed by the AO on the rectification application filed by the assessee firstly, against the intimation order passed u/s 143(1)(a) filed on 05.09.2023 thereafter, filed against the draft assessment order dated 25.10.2023 thereafter the addendum ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 115 rectification filed and application filed on 12.07.2024 before the JAO, requesting for passing the order in terms of the directions of Ld. DRP. Finally, on 06.08.2024, the rectification application was filed requesting for correction of mistake in final assessment order. This series of events clearly indicates that Revenue has not taken the issue raised by the assessee in rectification applications filed on so many times to rectify the mistakes apparent on records as pointed in the intimation order passed u/s 143(1)(a) of the Act. To add further, the appeal filed by the assessee against such intimation order was dismissed ny Adl./ JCIT(A) by holding the appeal as non-maintainable, leaving the assessee with no remedy other than to knock of the doors of the Tribunal for justice against such huge and arbitrary adjustments to the tune of INR 4,80,93,54,296/- made by CPC without issuing any show cause notice prior to such adjustments or even after on many occasions, by not disposing the applications filed for rectification of the said intimation. Moreso, nowhere in the draft assessment order or in final assessment order, there is a whisper of the issues on which adjustments were made by the CPC to the total income declared by the assessee. 164. Under these circumstances, we are left with no other alternative but to address the issues raised by the assessee against such intimation order passed u/s 143(1) even when the final assessment order u/s 143(3) of the Act was passed. The judgement relied upon by Additional/JCIT while dismissing the appeal of the assessee are distinguishable on facts as in none of the case, the lower authorities have made no discussion about the adjustments ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 116 made vide processing the return in the final order and thus these cases are not applicable to the facts of the present case. 165. In view of the above observations, we proceed to decide the present appeal preferred by the assessee against the intimation order u/s 143(1) of the Act. Here it is also relevant to state that the assessee in the appeal filed against the assessment order in ITA No.4328/Del/2024 has raised Ground No.4 wherein the assessee has specifically challenged the adjustments made in the intimation inaccurate or erroneous. While deciding Ground No.4 in ITA No.4328/Del/2024, we observed that since a separate appeal is preferred by the assessee, challenging each and every adjustment in the intimation passed u/s 143(1)(a) and there is no discussion about the adjustments made therefore, Ground No.4 raised by the assessee was dismissed. With these observations, the each individual issue on which the adjustments were made by CPC for which rectification of applications were pending before the lower authorities are decided as under:- 166. Ground of appeal No.1 raised by the assessee is general in nature, needs no adjudication hence, dismissed. 167. In Grounds of appeal Nos. 2 to 4, the assessee has challenged the action of CPC in not allowing the deduction u/s 80IA of INR 4,34,15,54,788/- claimed in the return of income filed. 168. Before us, ld. AR for the assessee submits that while computing the total income in Annexure-“Deduction under Chapter VIA” deduction u/s 80IA of the Act claimed by assessee is ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 117 disallowed by observing that the assessee has claimed deduction u/s 80IA more than the sum of amounts mentioned in Form 10CCB. Hence, deduction u/s 80 IA will be restricted to the extent of amounts mentioned in Form 10CCB. In this regard, Ld. AR for the assessee drew our attention amounts certified by auditors in Form 10CCB eligible for deduction u/s 80IA on each eligible project which are available at pages 280 to 477 of the Paper Book relating to eligible units situated at Hariawan, Lakhimpur, Ajbapur, Loni and Bharuch. It is further stated by ld. AR that in final assessment order transfer pricing adjustment of INR 1,01,70,00,629/- were made towards the withdrawal/deduction u/s 80IA from transfer of power/steam from the eligible unit to non-eligible unit thus the remaining deduction claimed u/s 80IA was allowed. However, from the perusal of tax computation sheet, it is seen that the deduction u/s 80IA was not allowed to the assessee and further addition was made on account of transfer price adjustment made which tantamount to double addition. 169. In view of these facts, we hereby direct the AO to allow the deduction u/s 80IA in terms of Form 10CCB filed by the assessee, as available in paper book pages 280 to 477, of the eligible units for which the deduction u/s 80IA was claimed at INR 4,34,15,54,788/- by the assessee in the computation of income. It is also relevant to state that the adjustment made in 80IA by the AO have already been deleted by us while deciding the assessee’s appeal in ITA No. 4328/Del/2024 herein above. Accordingly, Grounds of appeal Nos. 2 to 4 taken by the assessee are allowed for statistical purposes with the directions given herein above. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 118 170. Ground No.5 raised by the assessee is in respect of the adjustment of provision of gratuity of INR 1,10,62,352/-. 171. After hearing both parties, it is seen that in the computation of income placed at page 478 of the Paper Book, assessee has already made disallowance of INR 2,17,37,648/- which includes INR 1,10,62,352/- disallowed u/s 43B of the Act by the assessee itself. The CPC has made further addition of the same by observing that there is inconsistency in the amount debited to Profit & Loss Account in the previous year but disallowable u/s 43B of the Act and claimed in the return of income and audit report. The said observations of the CPC are contrary to the fact that once the assessee itself disallowed this amount and added back to the total income, any further adjustments towards the same tantamount to double addition. Accordingly, we direct the AO to delete the same. Accordingly, Ground of appeal No.5 raised by the assessee is allowed. 172. Ground of appeal No.6 is with respect to the adjustment of INR 21,98,611/- made on account of late payment of PF/ESI. In this regard, after considering the submissions, it is seen that the assessee has stated that a sum of INR 43,289/- was paid after due date under the respective Acts however, inadvertently the CPC has taken the figure of INR 21,98,611/-. This facts is further established from the order of CPC u/s 143(1) of the Act where CPC itself has observed that the amount of INR 43,289/- is the amount which was paid inconsistently with the provisions of the relevant ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 119 Acts and thus, disallowable u/s 36(1)(va) of the Act. Accordingly, we reduce the disallowance of INR 21,98,611/- to INR 43,289/-. As a result, Ground of appeal No.6 raised by the assessee is partly allowed. 173. Ground of appeal No.7 taken by the assessee is with regard to the adjustment of INR 17,29,52,164/- made on account of loss on sale of fixed assets and loss suffered on account of foreign exchange fluctuation of INR 6,85,505/-. 174. Heard both the parties and perused the material available on record. Regarding loss on sale of fixed assets of INR 17,22,66,659/-, we find that this amount of loss on sale of fixed assets as claimed in P&L Account was added back to the total income by the assessee which is evident from the computation of income available at paper book pages 478 to 480. Further, since the assessee is claiming the depreciation on vehicle on block of assets concept, the said amount was already reduced from the gross value of the block and therefore, again making disallowance of this amount tantamount to double addition. With regard to the addition/disallowance of INR 6,85,505/-, the assessee has not pressed this issue and while deciding the assessee’s appeal for AY 2020-21 in ITA No. 4328/Del/2024, further addition of this amount was deleted by us by observing that this adjustment has already been done by CPC u/s 143(1a) of the Act. In view these facts, the disallowance of INR 17,29,52,164/- is reduced to 6,85,505/-. Accordingly, Ground of appeal No.7 raised by the assessee is partly allowed. ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 120 175. Ground of appeal No.8 raised by the assessee is with regard to the adjustment of INR 5,40,85,615/- towards the bonus payable which is disallowed u/s 43B of the Act. 176. Heard both the parties and perused the material available on record. The assessee claimed that it had already made disallowance of INR 5,24,52,389/- and therefore, remaining amount of INR 16,33,326/-could only be further added to the total income of the assessee. From the perusal of computation of income available at paper book pages 474 to 480 it is seen that gross amount of INR 7,45,40,905/- was added to the total income u/s 43B of the Act which includes disallowance towards bonus also. Thus, the amount od addition of INR 5,24,52,389/- is double addition. In view of these facts, we direct the AO to verify the claim of the assessee and delete the addition of the amount already added to the total income by the assessee in the return of income. Accordingly the Ground of appeal No.8 is partly allowed for statistical purposes. 177. Ground No.9 raised by the assessee is with regard to the adjustment of INR 22,57,72,816/- on account of provision of leave encashment. 178. Heard both the parties and perused the material available on record. From the perusal of the computation of income available at paper book page 478, it is seen that the assessee has added back a sum of INR 15,97,10,673/- to the total income, after reducing the amount of INR 6,60,62,143/- from the gross value of provisions of INR 22,57,72,816/-, being the amount of leave encashment paid ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 121 during the year. Thus, further disallowance of INR 22,57,72,816/- is double taxation of the income already offered for tax by assessee. Accordingly, we delete the addition made by CPC of INR 22,57,72,816/-. Ground of appeal No.9 raised by the assessee is thus, allowed. 179. Ground of appeal No.10 taken by the assessee towards the adjustment of INR 4,51,000/- on account of penalty and fines. 180. Heard both the parties and perused the material available on record. It is seen that this amount has already been added back by the assessee in the computation of income as is evident from page 79 of the Paper Book, therefore, being double addition, the same is hereby deleted. Ground of appeal No.10 raised by the assessee is accordingly, allowed. 181. Ground of appeal No.11 taken by the assessee with respect to the double taxation relief of the tax paid in Singapore u/s 90 of the Act. In this regard, it is seen that in the intimation under Annexure FSI as provided and as computed, the CPC has accepted the foreign tax credit available to the assessee at INR 12,76,950 however, while computing the tax liability, credit of the same is not given without stating any reason. The same is reproduced as under: ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 122 O ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 123 ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 124 182. From the perusal of the above, it is established, there is no dispute with regard to the availability of the foreign tax in the hands of assessee even by CPC, therefore, the AO is directed to allow foreign tax credit of INR 12,76,950/- to the assessee. Ground of appeal No.11 of the assessee’s appeal is accordingly, allowed. 183. Ground No.12 is with regard to the MAT credit available to the assessee and not allowed. After considering the argument of both the parties, the AO is directed to verify the MAT credit available to the assessee and further directed to allow the same as per law. 184. In the result, appeal of the assessee is partly allowed in terms of the discussion herein above. 185. In the final result, captioned appeal of the Revenue in ITA 927/Del/2022 [AY 2015-16] is dismissed and captioned appeals of the assessee in ITA No.704/Del/2021 [AY : 2016-17], ITA No.2587/Del/2022 [AY:2018-19], ITA No.4328/Del/2024 [AY : 2020-21] and ITA No.1495/Del/2024 [AY : 2020-21] are partly allowed. Order pronounced in the open Court on 30.06.2025. Sd/- Sd/- (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER ITA Nos.927 & 2587/Del/2022, 704/Del/2021, 4328 & 1495/Del/2024 Page | 125 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "