Asst. Commissioner of Income Tax, Circle-1(2), Hyderabad V. M/s. Deccan Cements Limited., Hyderabad

ITA 1469/HYD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98411 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: V SIVA KUMAR; C S SUBRAHMANYAM
• Keywords: Tax effect
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA.NO.1468/HYD/2013 ASSESSMENT YEARS 2007-2008 D CIT, CIRCLE 1 7 ( 1 ) HYDERABAD. VS. M/S. DECCAN C EMENTS LIMITED, HYDERABAD-082. PAN AAACD8406G (APPELLANT) (RESPONDENT) ITA.NO.1469/HYD/2013 ASSESSMENT YEARS 2008-2009 ACIT, CIRCLE 1(2) HYDERABAD. VS. M/S. DECCAN CEMENTS LIMITED, HYDERABAD-082. PAN AAACD8406G (APPELLANT) (RESPONDENT) FOR RE VENUE : MR. RAMAKRISHNA BANDI FOR ASSESSEE : MR. C.S. SUBRAHMANYAM & MR. V. SIVAKUMAR DATE OF HEARING : 13.08.2015 DATE OF PRONOUNCEMENT : 28 .08.2015 ORDER PER P.M. JAGTAP, A.M. ONE OF THE TWO ISSUES INVOLVED IN THESE TWO APPEALS FILED BY THE REVENUE IS COMMON AND THE SAME THEREFORE HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER. FIRST, WE SHALL TAKE-UP THE APPEAL FILED BY THE REVENUE FOR A.Y. 20 07- 2008 BEING ITA.NO.1468/HYD/2013 WHICH IS DIRECTED 2 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. AGAINST THE ORDER OF LD. CIT(A)-V, HYDERABAD DATED 31.07.2013. THE SOLITARY ISSUE INVOLVED IN THIS APP EAL RELATES TO THE DELETION BY THE LD. CIT(A) OF THE AD DITION OF RS.53,19,838 MADE BY THE A.O. ON ACCOUNT OF DIFFERE NCE IN THE VALUATION OF BANKED ENERGY. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING O F CEMENT. DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2 007- 2008, IT COMMISSIONED A NEW WIND ELECTRICITY GENERA TING UNIT IN TAMILNADU. IT WAS ALREADY HAVING A WIND POW ER GENERATION UNIT IN ANDHRA PRADESH AND HAD ENTERED I NTO POWER PURCHASE AGREEMENT WITH TRANSMISSION CORPORATION OF ANDHRA PRADESH LIMITED. A SURVEY UND ER SECTION 133A WAS CARRIED OUT ON 13.03.2007 IN THE BUSINESS PREMISES OF THE ASSESSEE. SUBSEQUENT TO TH E SURVEY, THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 31.10.20 07 DECLARING TOTAL INCOME OF RS.35,97,73,410. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON BY THE A.O. TO FURNISH THE DETAILS REGA RDING ELECTRICITY POWER GENERATED BY HYDEL POWER UNIT AND WIND POWER UNIT. ON VERIFICATION OF THE SAID DETAILS AS WELL AS FURTHER DETAILS FURNISHED BY THE ASSESSEE, IT WAS N OTICED BY THE A.O. THAT THE CLOSING STOCK OF POWER UNITS GENERATED AT HYDEL A.P. DURING THE PERIOD FROM 22.03.2007 TO 31.03.2007 OF 22,25,874 UNITS WAS VAL UED BY THE ASSESSEE AT RS.0.71 PER UNIT AS AGAINST THE MARKET PRICE OF RS.3.10 PER UNIT. WHEN THE ASSESSEE WAS CA LLED 3 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. UPON BY THE A.O. TO EXPLAIN ITS STAND IN THE MATTE R, THE FOLLOWING EXPLANATION WAS OFFERED BY THE ASSESSEE. 'THE POWER GENERATED FROM MONTH TO MONTH IS EVACUATED TO APCPDCL. THEN, APCPDCL, OUT OF THE POWER GENERATED, ADJUSTS A PORTION OF THE GENERATED UNITS AGAINST THE POWER CONSUMPTION FOR EACH MONTH AND THE BALANCE OF UNITS REMAINING UNADJUSTED FROM THE CONSUMPTION REPRESENTS UNITS OF POWER' RETAINED BY THE APCPDCL. THE APPELLANT EXPLAINED THAT FROM THE TOTAL POWER GENERATED IN A YEAR THE UNITS REMAINING UNADJUSTED ARE CONSIDERED AS BANKED UNITS UNBILLED AND ARE VALUED AT COST. HENCE, WITHO UT THE ACKNOWLEDGEMENT OF HAVING UTILIZED THE POWER BY APCPDCL THE SALE IS NOT' COMPLETE. THE SALE IS COMPLETE, IN THIS CASE, ONLY UPON. THE POWER SUPPLI ED IS ADJUSTED AGAINST POWER CONSUMPTION BILLS AT THE RATE AGREED UPON. THE APPELLANT ALSO EXPLAINED THAT EVERY BUSINESS ENTITY SHOULD RECOGNIZE THE INVENTORY/GOODS REMAINING UNSOLD AT THE END OF THE YEAR AT COST OR MARKET VALUE WHICHEVER IS LOWER. FO R A BUSINESS OF POWER GENERATION BANKED UNITS REPRESENTS THE CLOSING STOCK WHICH ARE ACCORDINGLY VALUED AT COST BEING THE LOWER OF THE TWO. THE PROF IT ARRIVED AT BY VALUING OPENING STOCK AND CLOSING STO CK AT COST IN COMPLIANCE WITH THE ACCOUNTING STANDARDS REFLECTS THE TRUE ECONOMIC PROFIT MADE BY THE ENTERPRISE. THE APPELLANT REQUESTED FOR ACCEPTANCE OF THE METHOD OF VALUATION CONSISTENTLY FOLLOWED FOR BANKED UNITS WHICH ALSO ACCORDS WITH ACCOUNTING STANDARDS. 2.1. THE ABOVE EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE A.O. ACCORDING TO HIM, AS P ER THE POWER PURCHASE AGREEMENT WITH CPDCL, THE POWER GENERATED BY THE ASSESSEE WAS BEING EVACUATED TO CP DCL THROUGH POWER GRID AND ONCE THE POWER WAS SO EVACUATED, THE BANKED UNITS DID NOT REMAIN THE PROP ERTY 4 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. OF THE ASSESSEE COMPANY. HE HELD THAT WHEN THE ELEC TRICITY GENERATED BY THE ASSESSEE WAS EVACUATED TO THE CPDC L AT THE INTER-CONNECTION POINT, THE TRANSACTION WAS COM PLETED AS PER THE POWER PURCHASE AGREEMENT AND THE VALUE O F SUCH BANKED UNITS FOR THE PURPOSE OF RECOGNIZING TH E REVENUE SHOULD BE TAKEN AT THE AGREEMENT PRICE OF R S.3.10 PER UNIT. ACCORDINGLY, ADOPTING THE SAID RATE, THE VALUE OF BANKED ENERGY UNITS OF 22,25,874 WAS WORKED BY THE A.O. AT RS.69,00,209 AS AGAINST RS.15,80,371 TAKEN BY TH E ASSESSEE AND THE DIFFERENCE OF RS.53,19,838 WAS ADD ED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSE SSMENT COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 31.12.2009. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSE SSEE BEFORE THE LD. CIT(A) DISPUTING THE ADDITION OF RS.53,19,838 MADE BY THE A.O. ON ACCOUNT OF THE ALL EGED DIFFERENCE IN THE VALUATION OF BANKED UNITS. DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE FO LLOWING SUBMISSIONS WERE MADE ON BEHALF OF THE ASSESSEE IN SUPPORT OF ITS CLAIM ON THIS ISSUE. '2. THE APPELLANT-COMPANY. IN ADDITION TO MANUFACTURE AND SALE OF CEMENT, ALSO OPERATES POWER GENERATING UNITS. THE POWER SO GENERATED IS SOLD AS PER THE POWER PURCHASE AGREEMENT THAT THE APPELLANT - COMPANY ENTERED INTO WITH APCPDCL. THE APPELLANT COMPANY ALSO UTILIZES POWER FOR ITS MANUFACTURING ACTIVITY IN THE, CEMENT MANUFACTURING UNIT. WHILE BILLING THE APPELLANT FOR POWER CONSUMED, APCPDCL GIVES CREDIT FOR THE POWER SOLD TO IT UNDER THE POW ER 5 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. PURCHASE AGREEMENT. HOWEVER, APCPDCL ADJUSTS ONLY A PORTION OF THE GENERATED UNITS AGAINST THE POWER CONSUMPTION OF THE APPELLANT FOR EACH MONTH. OUT OF THE REMAINING UNADJUSTED UNITS, THE APPELLAN T HAS VALUED UNBILLED UNITS AT COST. THIS PRACTICE H AS BEEN CONSISTENTLY FOLLOWED OVER THE YEARS NOT ONLY BY THE APPELLANT BUT BY VARIOUS POWER GENERATING UNITS TO REFLECT THE POWER GENERATED, POWER SOLD AND POWE R REMAINING UNSOLD AT THE END OF THE YEAR. 3. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED ASSESSING OFFICER MADE ENQUIRIES WITH THE APPELLANT ABOUT THE VALUATION ADOPTED IN RESPECT OF THE BANKED UNITS. T HE APPELLANT EXPLAINED THAT THE POWER GENERATED FROM MONTH TO MONTH IS EVACUATED TO APCPDCL. THEN APCPDCL, OUT OF THE POWER GENERATED, ADJUSTS A PORTION OF THE GENERATED UNITS AGAINST THE POWER CONSUMPTION FOR EACH MONTH AND THE BALANCE OF UNITS REMAINING UNADJUSTED FROM THE CONSUMPTION REPRESENTS UNITS OF POWER RETAINED BY THE APCPDCL. THE APPELLANT EXPLAINED THAT FROM THE TOTAL POWER GENERATED IN A YEAR THE UNITS REMAINING UNADJUSTED ARE CONSIDERED AS BANKED UNITS UNBILLED AND ARE VALUED AT COST. HENCE, WITHOUT THE ACKNOWLEDGEMENT OF HAVING UTILIZED THE POWER BY APCPDCL THE SALE IS NOT COMPLETE. THE SALE IS COMPLETE, IN THIS CASE, O NLY UPON THE POWER SUPPLIED IS ADJUSTED AGAINST POWER CONSUN1PTION BILLS AT THE RATE AGREED UPON. 4. THE APPELLANT ALSO EXPLAINED THAT EVERY BUSINESS ENTITY SHOULD RECOGNIZE THE INVENTORY / GOODS REMAINING UNSOLD AT THE END OF THE YEAR AT CO ST OR MARKET VALUE WHICHEVER IS LOWER. FOR A BUSINESS OF POWER GENERATION BANKED UNITS REPRESENTS THE CLOSIN G STOCK WHICH ARE ACCORDINGLY VALUED AT COST BEING TH E LOWER OF THE TWO. THE PROFIT ARRIVED AT BY VALUING OPENING STOCK AND CLOSING STOCK AT COST IN COMPLIAN CE WITH THE ACCOUNTING STANDARDS REFLECTS THE TRUE ECONOMIC PROFIT MADE BY THE ENTERPRISE. THE APPELLA NT REQUESTED FOR ACCEPTANCE OF THE METHOD OF VALUATION CONSISTENTLY FOLLOWED FOR BANKED UNITS WHICH ALSO ACCORDS WITH ACCOUNTING STANDARDS. 6 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. 5. HOWEVER, THE ASSESSING OFFICER OPINED THAT ONCE POWER GENERATED IS EVACUATED THROUGH POWER GRID, IT NO LONGER REMAINS THE PROPERTY OF TH E APPELLANT AND THAT THE APPELLANT HAS TO RECEIVE THE AGREED PRICE I.E., RS.3.10 PER UNIT FROM APCPDCL. H E OPINED THAT BANKED ENERGY IS PART OF THE DELIVERED ENERGY FROM THE APPELLANT TO APTRANSCO AT THE INTER CONNECTION POINT OF THE GRID SYSTEM AND MADE ADDITION OF RS.53,19,838 REPRESENTING THE DIFFERENC E IN BANKED ENERGY VALUE. 6. THE ASSESSING OFFICER FAILED TO APPRECIATE THAT ELECTRIC POWER GENERATED BY THE APPELLANT CANN OT BE STORED LIKE OTHER COMMODITIES. IT IS FOR THIS RE ASON THAT THE POWER GENERATED IS EVACUATED INTO GRID IN ACCORDANCE WITH THE AGREEMENT ENTERED INTO WITH APCPDCL. ONCE THE POWER SO EVACUATED IS UTILIZED BY THE APPELLANT FOR ITS CEMENT PLANT, (SUBJECT TO PAY MENT OF WHEELING CHARGES AND BANKING CHARGES) THE APPELLANT REALIZES THE SALE VALUE TO THE EXTENT OF UNITS ADJUSTED AGAINST THE CONSUMPTION BY THE CEMENT PLANT. IT IS OF UTMOST IMPORTANCE TO NOTE THAT APCPDCL ITSELF ACKNOWLEDGES THE QUANTITY OF BANKED UNITS WHICH INDICATES THAT BANKED UNITS CONSTITUTE CLOSING STOCK OF THE ASSESSEE ACKNOWLEDGED AS SUCH BY APCPDCL. ONCE THIS IS ACKNOWLEDGED AS A FACT, THE VALUATION OF CLOSING STOCK IN ACCORDANCE WITH ACCEPTED METHODS OF ACCOUNTING CANNOT BE THE SUBJEC T MATTER OF DISPUTE. IN THIS VIEW OF THE MATTER, AND HAVING REGARD TO THE FACTS SUBMITTED ABOVE, THE APPELLANT PRAYS THAT THE TREATMENT OF THE QUANTITY OF BANKED UNITS BY THE APPELLANT AS CLOSING STOCK, WHI CH HAS BEEN CONSISTENTLY FOLLOWED OVER THE PAST SEVERA L YEARS, MAY BE UPHELD AND THE ADDITION OF RS.53,19,838/- MADE BY THE ASSESSING OFFICER MAY BE DELETED. 7. IT IS SUBMITTED THAT THE METHOD OF ACCOUNTING F OR UNBILLED UNITS HAS BEEN CONSISTENTLY FOLLOWED BY TH E ASSESSEE OVER THE YEARS AND HAS BEEN ACCEPTED BY THE DEPARTMENT. IN THE LIGHT OF THE FACT THAT THERE HAS BEEN NO CHANGE EITHER ON THE FACTS OR IN ANY OTHER CIRCUMSTANCES OF THE CASE, IT IS SUBMITTED THAT THE 7 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. A.O. IS NOT CORRECT IN IMPOSING A DIFFERENT METHOD OF ACCOUNTING IN THE YEAR UNDER ACCOUNT. IN THIS REGAR D, THE ASSESSEE RELIES ON THE DECISION OF THE APEX COU RT IN THE CASE OF CIT VS BILAHARI INVESTMENT (P) LIMIT ED (299 ITR I SC. 8. THE ASSESSEE ALSO SUBMITS THAT EVEN OTHERWISE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, INCOME TO THE EXTENT REPRESENTED BY THE PRODUCTION OF THE UNBILLED UNITS IN QUESTION DOES N OT ACCRUE TO THE ASSESSEE TILL IT IS RECOGNIZED/ADJUST ED AGAINST THE CONSUMPTION IN THE ASSESSEE'S USER OF ELECTRICITY IN ITS CEMENT MANUFACTURING UNIT, AND T HE AO IS NOT CORRECT IN MAKING ADDITION OF RS.53,19,83 8 WHICH MAY BE DIRECTED TO BE DELETED. 4. THE LD. CIT(A) FOUND MERIT IN THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AND DELETED THE ADDI TION MADE BY THE A.O. ON ACCOUNT OF DIFFERENCE IN THE VA LUATION OF BANKED UNITS OBSERVING THAT THE METHOD OF VALUAT ION OF BANKED UNITS HAVING BEEN CONSISTENTLY FOLLOWED BY T HE ASSESSEE IN THE PAST YEARS AND THE SAME HAVING BEEN ACCEPTED BY THE DEPARTMENT, THERE WAS NO JUSTIFICAT ION FOR THE A.O. TO TAKE A DIFFERENT STAND IN THE YEAR UNDE R CONSIDERATION. THE LD. CIT(A) NOTED THAT AS PER THE METHOD CONSISTENTLY FOLLOWED BY THE ASSESSEE, THE B ANKED POWER UNITS TAKEN IN THE CLOSING STOCK IN THE YEAR UNDER CONSIDERATION WERE DULY CONSIDERED AS PART OF SALES IN THE IMMEDIATELY SUCCEEDING YEAR AND THEREFORE, THERE WA S NO LOSS TO THE REVENUE ON THIS COUNT. HE ALSO HELD THA T THERE BEING NO CHANGE IN THE RELEVANT FACTS AND CIRCUMSTA NCES OF THE CASE AS INVOLVED IN THE YEAR UNDER CONSIDERA TION VIS--VIS THE EARLIER YEARS, THE A.O. WAS NOT CORRE CT IN CHANGING THE METHOD OF VALUATION CONSISTENTLY ADOPT ED BY 8 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. THE ASSESSEE FOR VALUATION OF BANKED POWER UNITS. ACCORDINGLY, RELYING ON THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF CIT VS. BILHARI INVESTMENT (P) LIMITED 299 ITR 1 (SC), THE LD. CIT(A) DELETED THE ADDITION MADE BY THE A.O. BY CHANGING THE METHOD OF VALUATION OF BANKED POWER UNITS IN THE YEAR UNDER CONSIDERATION. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVEN UE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED DR RELIED ON THE ORDER OF THE A.O. IN SUPPORT OF RE VENUES CASE ON THE ISSUE UNDER CONSIDERATION WHILE THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) IN SUPPORT OF ASSESSEES CASE THAT THE ADDITION MADE BY THE A. O. ON THIS ISSUE WAS RIGHTLY DELETED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSE RVED THAT ALTHOUGH 22,25,874 BANKED ENERGY UNITS PRODUCE D BY HYDEL POWER UNIT A.P. DURING THE PERIOD FROM 22.03.2007 AND 31.03.2007 AND INCLUDED IN THE CLOSI NG STOCK WERE VALUED BY THE ASSESSEE AT RS.0.71 PER UN IT AS AGAINST THE MARKET PRICE OF RS.3.10 PER UNIT, THE B ASIS OF SUCH VALUATION WAS DULY EXPLAINED BY IT BEFORE THE A.O. AS WELL AS BEFORE THE LD. CIT(A). AS SPECIFICALLY POI NTED OUT BY THE ASSESSEE BEFORE THE LD. CIT(A), A SIMILAR BA SIS WAS ADOPTED BY IT EVEN IN THE EARLIER YEARS AND THIS ME THOD OF VALUATION CONSISTENTLY FOLLOWED IN THE EARLIER YEAR S WAS 9 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. ACCEPTED BY THE DEPARTMENT. IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) BY THE ASSESSEE THAT AS PE R THE SAID METHOD CONSISTENTLY FOLLOWED, THE BANKED ENERG Y UNITS INCLUDED IN THE CLOSING STOCK WERE DULY CONSI DERED AS PART OF THE SALES IN THE IMMEDIATELY SUCCEEDING YEAR AND THERE WAS THUS NO LOSS TO THE REVENUE. RELIANCE IN THIS REGARD WAS ALSO PLACED BY THE ASSESSEE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. BILHARI INVESTMENT (P) LIMITED (SUPRA) WHEREIN IT W AS HELD THAT THE METHOD OF ACCOUNTING ADOPTED BY THE ASSESS EE HAVING BEEN CONSISTENTLY FOLLOWED OVER THE PAST SEV ERAL YEARS, THE SAME WOULD NOT RESULT IN DISTORTION OF P ROFITS. KEEPING IN VIEW THE RATIO OF THE SAID DECISION OF H ONBLE SUPREME COURT IN THE CASE OF CIT VS. BILHARI INVEST MENT (P) LIMITED (SUPRA), WHICH IS SQUARELY APPLICABLE T O THE FACTS INVOLVED IN THE ASSESSEES CASE, THE LD. CIT( A) ACCEPTED THE METHOD FOLLOWED BY THE ASSESSEE FOR VALUATION OF BANKED POWER UNITS AND DELETED THE ADD ITION MADE BY THE A.O. BY CHANGING THE METHOD OF VALUATIO N CONSISTENTLY FOLLOWED BY THE ASSESSEE IN THE EARLIE R YEARS. IN OUR OPINION, THE RELIEF ALLOWED BY THE LD. CIT(A ) TO THE ASSESSEE ON THIS ISSUE IS WELL FOUNDED AND SINCE TH E LEARNED D.R. HAS ALSO NOT BEEN ABLE TO DISPUTE OR CONTROVERT THIS POSITION, WE FIND NO JUSTIFIABLE RE ASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE. THE SAME IS T HEREFORE UPHELD AND THE APPEAL OF THE REVENUE FOR A.Y. 2007- 2008 IS DISMISSED. 10 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. 7. NOW WE SHALL TAKE-UP THE APPEAL OF THE REVENUE FOR A.Y. 2008-2009 BEING ITA.NO.1469/ HYD/2013 WHICH IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-V, HYDERABAD DATED 31.07.2013. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE AS UNDER : I. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS IN LAW AND ON FACTS OF THE CASE. II. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.5,40,326/- BEING DIFFERENCE IN VALUE OF BANKED UNITS OF POWER DISCLOSED BY THE ASSESSEE. III. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.3,16,480/- BEING DIFFERENCE IN VALUE OF POWER GENERATION BETWEEN THE ASSESSEE AND APCPDCL. IV. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE UNDER SECTION 14A. V. ANY OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON REC ORD. ALTHOUGH THE LEARNED REPRESENTATIVES OF BOTH THE SI DES HAVE RAISED THE ARGUMENTS IN SUPPORT OF THEIR RESPE CTIVE STAND ON THE ISSUES INVOLVED IN THIS APPEAL ON MERI T, IT IS OBSERVED THAT THE TAX EFFECT INVOLVED IN THIS APPEA L OF THE REVENUE IS LESS THAN THE MONETARY LIMIT OF RS.4 LAK HS PRESCRIBED BY THE CBDT VIDE INSTRUCTION NO.5 OF 201 4 ISSUED ON 10.07.2014 FOR FILING THE APPEALS BEFORE THE TRIBUNAL. ALTHOUGH THE SAID INSTRUCTION IS APPLICAB LE TO 11 ITA.NO.1468 & 1469/HYD/2013 M/S. DECCAN CEMENTS LIMITED, HYDERABAD. THE APPEALS FILED ON OR AFTER 10.07.2014, HONBLE G UJRAT HIGH COURT IN THE CASE OF SURESH CHANDRA DURGA PRAS AD KHATOD (HUF) 253 CTR 492 (GUJ.) HAS HELD THAT KEEPI NG IN VIEW THE MAIN OBJECTIVE OF THE INSTRUCTION ISSUE D BY THE CBDT TO REDUCE THE PENDING LITIGATION WHERE THE TAX EFFECT IS CONSIDERABLY LOW OR SMALL, THE SAME WOULD APPLY TO PENDING APPEALS ALSO. WE ACCORDINGLY HOLD THAT THE PRESENT APPEAL FILED BY THE DEPARTMENT INVOLVING A TAX EFFECT OF LESS THAN THE MONETARY LIMIT OF RS.4 LAKH S FIXED BY THE CBDT IN ITS INSTRUCTION NO.5 OF 2014 DATED 1 0 TH JULY, 2014 FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL, IS NOT MAINTAINABLE. THE SAME IS ACCO RDINGLY DISMISSED. 9. IN THE RESULT, ITA.NO.1468/HYD/2013 AND ITA.NO.1469/HYD/2013 OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.0 8.2015. SD/- SD/- (SMT. P. MADHAVI DEVI) (P.M. JAGTAP) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED 28 TH AUGUST, 2015 VBP/- COPY TO : 1. DCIT, CIRCLE 17 (1), 6 TH FLOOR, B BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. ACIT, CIRCLE 1(2), 4 TH FLOOR, AAYAKAR BHAVAN, HYDERABAD. 3. M/S. DECCAN CEMENTS LIMITED, 6 - 3 - 666/B, 3 RD FLOOR, DECCAN CHAMBERS, SOMAJIGUDA, HYDERABAD 082. 4. CIT( A) - V, HYDERABAD 4. CIT - I, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE