M/s. THDC India Ltd., Uttrakhand V. ACIT, Haridwar

ITA 1560/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0651 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NOS.1384/DEL/2015, 1385/DEL/2015 ASSESSMENT YEARS: 2010-11 & 2011-12 DCIT, CIRCLE, RISHIKESH, IDPL CAMPUS VEERBHADRA, RISHIKESH. VS. THDC INDIA LTD., BHAGIRATHI BHAWAN, PRAGTIPURAM, BYE PASS ROAD, RISHIKESH. PAN: AAACT7905Q ITA NOS.1560/DEL/2015, 2733 & 3313/DEL/2017 ASSESSMENT YEARS: 2011-12, 2012-13 & 2013-14 THDC INDIA LTD., BHAGIRATHI BHAWAN, PRAGTIPURAM, BYE PASS ROAD, RISHIKESH. PAN: AAACT7905Q VS. DCIT, CIRCLE, RISHIKESH, IDPL CAMPUS VEERBHADRA, RISHIKESH. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. PANDA, ADVOCATE REVENUE BY : SHRI PRAKHAR VIPLAVA GUPTA, SR. DR DATE OF HEARING : 26.03.2019 DATE OF PRONOUNCEMENT : 28.03.2019 ORDER PER BENCH : ITA NO.1384/DEL/2015 FILED BY THE REVENUE IS DIRECT ED AGAINST THE ORDER DATED 18 TH DECEMBER, 2014 OF THE CIT(A), DEHRADUN, RELATING T O ASSESSMENT YEAR 2010-11. ITA NOS.1560/DEL/2015 FILED BY THE ASSESSEE AND IT A NO.1385/DEL/2015 FILED BY THE ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 2 REVENUE ARE CROSS APPEALS AND ARE DIRECTED AGAINST THE ORDER DATED 18 TH DECEMBER, 2014 OF THE CIT(A), DEHRADUN FOR ASSESSMENT YEAR 20 11-12. ITA NOS.2733 & 3313/DEL/2017 FILED BY THE ASSESSEE ARE DIRECTED AG AINST THE SEPARATE ORDERS DATED 24 TH JANUARY, 2017 AND 29 TH MARCH, 2017 OF THE CIT(A), HALDWANI FOR ASSESSMENT YEARS 2012-13 & 2013-14, RESPECTIVELY. SINCE COMMON GROU NDS ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER ITA NO.1384/DEL/2015 (BY THE REVENUE FOR A.Y. 2010- 11) 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A JOINT VENTURE COMPANY OF THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF UTTAR PRA DESH. IT IS ENGAGED IN THE BUSINESS OF GENERATION OF HYDRO ELECTRICITY. IT FIL ED ITS RETURN OF INCOME ON 28 TH SEPTEMBER, 2010 DECLARING TOTAL INCOME OF RS.96,07, 767/- AFTER CLAIMING DEDUCTION U/S 80IA AT RS.720,67,93,799/-. IT HAS ALSO DISCLOSED B OOK PROFIT AT RS.492,69,24,248/-. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS OBSERVED FROM THE PROFIT & LOSS ACCOUNT THAT THE ASSESSEE HAS SHOWN OTHER INCOME OF RS.7,20,33,761/- THE DETAILS OF WHICH ARE AS UNDER:- INTEREST ON BANK DEPOSITS RS. 22,28,026/- INTEREST FROM EMPLOYEES RS.1,16,02,595/- INTEREST FROM OTHERS RS. 12,27,885/- MACHINE HIRE CHARGES RS. 1,57,957/- RENT RECEIPT RS. 9,51,753/- SUNDRY RECEIPT RS.1,34,59,075/- EXCESS PROVISION WRITTEN BACK RS. 2,48,115/- PROFIT ON SALE OF ASSETS RS.3,59,11,054/- LATE PAYMENT OF SURCHARGE RS. 62,47,301/- RS.7,20,33,761/- ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 3 3. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80IA ON THE FOLLOWING INCOME:- INTEREST FROM EMPLOYEES RS.1,16,02,595/- MACHINE HIRE CHARGES RS. 1,57,957/- RENT RECEIPT RS. 9,51,753/- SUNDRY RECEIPT RS.1,34,59,075/- EXCESS PROVISION WRITTEN BACK RS. 2,48,115/- LATE PAYMENT OF SURCHARGE RS. 62,47,301/- RS.3,26,66,796/- 4. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F LIBERTY INDIA VS. CIT, 183 TAXMAN 349 (2009) THE ASSESSING OFFICER HELD THAT THESE INCOMES WERE DERIVED FROM INDEPENDENT SOURCE OF INCOME AND DID NOT HAVE ANY F IRST DEGREE NEXUS WITH THE GENERATION OF POWER. THE ASSESSING OFFICER ACCORDI NGLY DENIED DEDUCTION U/S 80IA ON THE ABOVE ITEMS. IN APPEAL, THE LD.CIT(A), FOLLOWI NG THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2009-10, ALLOWED THE CLAIM OF DEDUC TION U/S 80IA ON INCOME FROM EXCESS PROVISION WRITTEN BACK AND LATE PAYMENT SURC HARGE. HE, HOWEVER, UPHELD THE ACTION OF THE ASSESSING OFFICER IN DENYING DEDUCTIO N U/S 80IA ON THE REMAINING AMOUNTS. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- 1. THE LD.CIT(APPEALS)HAS ERRED IN LAW AND ON FACT S IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IA ON INCOME FROM 'EXCESS PROVISION WRITTEN BACK AND 'LATE PAYMENT SURCHARGE' IN SPITE OF CLEAR CUT FINDING GI VEN IN THE ASSESSMENT ORDER THAT THESE WERE NOT DERIVED BY ASSESSEE FROM THE AC TIVITY OF THE ELIGIBLE BUSINESS. ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 4 2. THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON FACT S BY UPHOLDING THE SUBMISSION OF THE ASSESSEE IGNORING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT, 183 TAXMAN 349(2 009). 3. THE ORDER OF LD. CIT(APPEALS) BE SET-ASIDE AND THAT OF THE AO BE RESTORED. 6. WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH T HE SIDES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND IDE NTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS I.E., 2008-09 AND 2009-10. WE FIND THE TRIBUNAL IN ITA NOS.3956 & 6457/DEL/2012 FILED BY THE REVENUE AND IN CO NOS.91 & 92/DEL/2014 FILED BY THE ASSESSEE VIDE ORDER DATED 3 RD MARCH, 2015 HAS DECIDED THE ABOVE TWO ISSUES IN FA VOUR OF THE ASSESSEE BY OBSERVING AS UNDER:- 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVA NT MATERIAL. THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSEE. HERE, IT IS RELEVANT TO MENTION THAT THE APPEAL WAS PREPONED FOR TODAY AT THE WRITTEN REQUES T OF THE ASSESSEES COUNSEL. DESPITE THAT, A REQUEST FOR ADJOURNMENT HAS BEEN FI LED, WHICH HAS BEEN REJECTED BY US. WE ARE, THEREFORE, GOING AHEAD WITH THE DISP OSAL OF THESE APPEALS EX PARTE QUA THE ASSESSEE, ON MERITS. 7. IT IS SEEN THAT THE ENTIRE CONTROVERSY LIES IN A NARROW COMPASS, AS TO WHETHER THE ABOVE ITEMS OF INCOME QUALIFY FOR DEDUC TION U/S 80-IA. AT THIS JUNCTURE, IT IS RELEVANT TO SET OUT SUB-SECTION (1) OF SECTION 80IA WHICH PROVIDES THAT : `WHERE THE GROSS TOTAL INCOME OF AN ASSESSE E INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS R EFERRED TO IN SUB- SECTION (4) (SUCH BUSINESS BEING HEREINAFTER REFERR ED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSES SEE, A DEDUCTION OF AN AMOUNT EQUAL TO HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. A PERUSAL OF TH E MANDATE OF SUB-SECTION (1) MANIFESTLY DIVULGES THAT THE DEDUCTION IS AVAILABLE AT THE RATE OF 100% OF THE PROFITS AND GAINS DERIVED FROM THE ELIGIBLE BUSINESS. THE EXPRESSION DERIVED FROM HAS RECEIVED THE ATTENTION OF THE HONBLE APE X COURT IN SEVERAL CASES. IN LIBERTY INDIA (SUPRA) , THE QUESTION WAS AS TO WHETHER DEPB/DUTY DRAWBACK IS ELIGIBLE FOR DEDUCTION U/S 80-IB. REPELLING SUCH CO NTENTION RAISED ON BEHALF OF THE ASSESSEE, THE HONBLE APEX COURT HELD THAT DEPB /DUTY DRAWBACK ARE ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 5 INCENTIVES WHICH ARE NOT PROFITS DERIVED FROM THE E LIGIBLE BUSINESS AND THEREFORE, FAIL TO FORM PART OF NET PROFITS OF THE INDUSTRIAL UNDERTAKING FOR THE PURPOSES OF S. 80-IA OR 80-IB. IT WAS SPECIFICALLY HELD THAT : `I T IS EVIDENT THAT S. 80-IB PROVIDES FOR ALLOWING OF DEDUCTION IN RESPECT OF PROFITS AND GAINS DERIVED FROM THE ELIGIBLE BUSINESS. THE WORDS 'DERIVED FROM' ARE NARROWER IN CONNOTATIO N AS COMPARED TO THE WORDS 'ATTRIBUTABLE TO' . IN OTHER WORDS, BY USING THE EXPRESSION 'DERIVED FROM', PARLIAMENT INTENDED TO COVER SOURCES NOT BEY OND THE FIRST DEGREE. ON ANALYSIS OF SS. 80-IA AND 80-IB IT BECOMES CLEAR TH AT ANY INDUSTRIAL UNDERTAKING, WHICH BECOMES ELIGIBLE ON SATISFYING SUB-S. (2), WO ULD BE ENTITLED TO DEDUCTION UNDER SUB-S. (1) ONLY TO THE EXTENT OF PROFITS DERI VED FROM SUCH INDUSTRIAL UNDERTAKING. IN THE CASE OF PANDIAN CHEMICALS VS. CIT (2003) 262 ITR 278 (SC), THE ISSUE WAS WHETHER THE INTEREST EARNED BY INDUS TRIAL UNDERTAKING ON DEPOSITS WITH ELECTRICITY BOARD QUALIFIES FOR RELIE F UNDER S. 80HH. IN THIS SECTION ALSO, THE EXPRESSION USED IS `DERIVED FROM. ANSWER ING THE QUESTION IN FAVOUR OF THE REVENUE, THE HONBLE SUMMIT COURT HELD THAT : ` THE WORDS 'DERIVED FROM' IN S. 80HH MUST BE UNDERSTOOD AS SOMETHING WHICH HAS D IRECT OR IMMEDIATE NEXUS WITH THE APPELLANT'S INDUSTRIAL UNDERTAKING . ALTHOUGH ELECTRICITY MAY BE REQUIRED FOR THE PURPOSES OF THE INDUSTRIAL UNDERTAKING, THE DEPOSIT REQUIRED FOR ITS SUPPLY IS A STEP REMOVED FROM THE BUSINESS OF THE INDUSTRI AL UNDERTAKING. THE DERIVATION OF PROFITS ON THE DEPOSIT MADE WITH ELECTRICITY BOA RD CANNOT BE SAID TO FLOW DIRECTLY FROM THE INDUSTRIAL UNDERTAKING ITSELF. WH ERE THE WORDS ARE UNEQUIVOCAL, THERE IS NO SCOPE FOR IMPORTING ANY RULE OF INTERPR ETATION AS SUBMITTED BY THE APPELLANT. IT IS DISCERNIBLE FROM A SURVEY OF TH E ABOVE AND SEVERAL OTHER DECISIONS ON THE POINT THAT THE EXPRESSION DERIVED FROM IS NARROWER IN SCOPE VIS- -VIS THE EXPRESSION ATTRIBUTABLE TO IT. AN INCOME TO BE DERIVED FROM A PARTICULAR SOURCE, MUST HAVE A DIRECT AND IMMEDIATE NEXUS WITH SUCH SOURCE. IN OTHER WORDS, SUCH INCOME MUST DIRECTLY EMANATE FROM THE ELIGIBLE UNDERTAKING AND SHOULD NOT HAVE AN INDIRECT NEXUS ALONE. IF A N INCOME IS INDIRECTLY CONNECTED WITH THE ELIGIBLE UNDERTAKING, THEN THAT INCOME LOSES THE DIRECT NEXUS AND HENCE CANNOT BE CONSIDERED AS DERIVED FROM TH E ELIGIBLE UNDERTAKING. WITH THE ABOVE UNDERSTANDING OF THE AMBIT OF THE EXPRESS ION DERIVED FROM, WE NOW MOVE FORWARD TO DETERMINE AS TO WHETHER THE TWO ITE MS ON WHICH THE LD. CIT(A) DIRECTED TO ALLOW DEDUCTION CAN BE CONSTRUED AS `DE RIVED FROM THE INDUSTRIAL UNDERTAKING. I. EXCESS PROVISION WRITTEN BACK: 8. THIS AMOUNT REPRESENTED REVERSAL OF EXCESS PR OVISION OF SALARY MADE IN THE PAST IN RESPECT OF PAY REVISION WHICH WAS IMPLEMENT ED DURING THE PREVIOUS YEAR UNDER CONSIDERATION. THE CLAIM OF THE ASSESSEE BEF ORE THE LD. CIT(A) WAS THAT SINCE THE PROVISION WAS FOUND TO BE IN EXCESS, IT W AS WRITTEN BACK IN THE ACCOUNTS AS INCOME DURING THE PREVIOUS YEAR. THERE IS HAR DLY ANY NEED TO EMPHASIZE THAT SALARY PAID BY AN UNDERTAKING IS PART OF EXPENDITUR E OTHERWISE DEDUCTIBLE IN COMPUTING THE INCOME DERIVED FROM THE ELIGIBLE UNDE RTAKING. IF IN THE PRECEDING YEAR, THE DEDUCTION WAS CLAIMED FOR A HIGHER SUM, W HICH REDUCED THE ELIGIBLE ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 6 PROFIT WITH SUCH HIGHER AMOUNT OF DEDUCTION AND THE ACTUAL EXPENDITURE TURNED OUT TO BE LESS WITH THE RESULT THAT THE EXCESS PROV ISION GETS WRITTEN BACK IN THE INSTANT YEAR, IT CANNOT BE CHARACTERIZED AS ANYTHIN G OTHER THAN PART AND PARCEL OF PROFIT DERIVED FROM ELIGIBLE ENTERPRISE. IN REALIT Y, THE EXCESS PROVISION WRITTEN BACK IS NOT AN INCOME IN ITSELF, BUT, A REDUCED AMO UNT OF ELIGIBLE DEDUCTION IN THE COMPUTATION OF PROFITS DERIVED FROM ELIGIBLE ENTERP RISE. WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE LD. CIT(A) ON THIS ISSUE. II. LATE PAYMENT CHARGES: 9. THE LD. CIT(A) HAS RECORDED THAT THIS RECEIPT REPRESENTED EXTRA PAYMENT RECEIVED BY THE ASSESSEE FROM ITS CUSTOMERS ON ACCO UNT OF LATE PAYMENT OF THEIR DUES. THE CHARACTER OF THIS RECEIPT HAS NOT BEEN D ISPUTED BY THE LD. DR. IN ESSENCE, THE LATE PAYMENT CHARGES ARE NOTHING, BUT, PART OF SALE CONSIDERATION WHICH CANNOT BE VIEWED DIFFERENTLY. ONCE DEDUCTION IS AVAILABLE ON SALE CONSIDERATION, THERE CAN BE NO REASON TO DENY DEDU CTION ON SUCH LATE PAYMENT CHARGES, WHICH ARE PART AND PARCEL OF SUCH SALE CON SIDERATION. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER ALLOWING DEDUCTION U/S 80 IA ON THIS AMOUNT. 7. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBU NAL IN ASSESSEES OWN CASE FOR THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IA ON ACCO UNT OF EXCESS PROVISION WRITTEN BACK AND LATE PAYMENT CHARGE. THE SUBMISSION OF TH E LD. DR THAT THE REVENUE HAS NOT ACCEPTED THE DECISION OF THE TRIBUNAL AND HAS FILED APPEAL BEFORE THE HON'BLE HIGH COURT CANNOT BE THE BASIS TO TAKE A CONTRARY DECISI ON IN ABSENCE OF ANY ORDER OF THE HON'BLE HIGH COURT REVERSING THE DECISION OF THE TR IBUNAL ON THIS ISSUE. WE, THEREFORE, DISMISS THE GROUNDS RAISED BY THE REVENU E AND UPHOLD THE ORDER OF THE CIT(A). THE APPEAL FILED BY THE REVENUE IS ACCORDIN GLY DISMISSED. ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 7 ITA NO.1560/DEL/2015 (BY THE ASSESSEE FOR A.Y. 2011 -12) 8. THE GROUNDS OF APPEAL NO.1 AND 5 BY THE ASSESSEE BEING GENERAL IN NATURE ARE DISMISSED. IN GROUND OF APPEAL NO.2, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) IN DENYING DEDUCTION U/S 80IA IN RESPECT OF THE FOLLOWING ITEMS:- A) INTEREST FROM EMPLOYEES B) MACHINE HIRE CHARGES C) RENT RECEIPT D) SUNDRY RECEIPT E) EXCESS PROVISION WRITTEN BACK F) LATE PAYMENT OF CHARGES 9. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESS ING OFFICER IN THE INSTANT CASE, REJECTED THE CLAIM OF DEDUCTION U/S 80IA ON THE FOL LOWING INCOME:- INTEREST FROM EMPLOYEES RS.1,15,95,623/- MACHINE HIRE CHARGES RS. 11,91,915/- RENT RECEIPT RS. 17,49,072/- SUNDRY RECEIPT RS.1,71,39,022/- EXCESS PROVISION WRITTEN BACK RS. 10,34,829/- LATE PAYMENT OF SURCHARGE RS. 23,47,562/- RS.3,50,58,023/- 10. IN APPEAL, THE LD.CIT(A) ALLOWED THE CLAIM OF D EDUCTION U/S 80IA IN RESPECT OF EXCESS PROVISION WRITTEN BACK AND LATE PAYMENT OF S URCHARGE. HE, HOWEVER, REJECTED THE CLAIM OF DEDUCTION U/S 80IA IN RESPECT OF THE F OLLOWING FOUR ITEMS FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL:- A) INTEREST FROM EMPLOYEES/OTHER INTEREST INCOME B) MACHINE HIRE CHARGES C) RENT RECEIPT D) SUNDRY RECEIPT ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 8 11. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE DURING ASSESSMENT YEAR 2008-09 AND 2009-10. W E FIND THE TRIBUNAL WHILE DECIDING THE CROSS OBJECTION OF THE ASSESSEE AGAINS T NOT ALLOWING DEDUCTION U/S 80IA ON THE REMAINING AMOUNT HAS OBSERVED AS UNDER:- 10. IN THE CROSS OBJECTIONS, THE ASSESSEE IS AGGRI EVED AGAINST NOT ALLOWING OF DEDUCTION U/S 80IA ON THE REMAINING AMOUNTS. I. INTEREST ON EMPLOYEES: 11. THE FIRST ITEM IS INTEREST WHICH WAS RECEI VED AGAINST ADVANCES TO ITS EMPLOYEES FOR VARIOUS PURPOSES, SUCH AS, HOUSE BUIL DING, PURCHASE OF COMPUTER, ETC. EVEN THOUGH THE EMPLOYEES WERE ENGAGED IN POW ER GENERATION, THE FACT REMAINS THAT THE INTEREST RECEIVED BY THE ASSESSEE ON LOANS ADVANCED BY THE ASSESSEE TO ITS EMPLOYEES CANNOT BE CHARACTERIZED A S INCOME `DERIVED FROM ELIGIBLE UNDERTAKING. THERE IS NO DIRECT NEXUS OF SUCH INTEREST INCOME WITH THE ELIGIBLE UNDERTAKING INASMUCH AS THE IMMEDIATE SOUR CE OF SUCH INCOME IS NOT THE ELIGIBLE UNDERTAKING. SUCH INCOME MAY BE ATTRIBUTA BLE TO THE BUSINESS OF THE ELIGIBLE UNDERTAKING, BUT, CANNOT BE HELD AS DERIVE D FROM THE ELIGIBLE UNDERTAKING. THE VIEW TAKEN BY THE LD. CIT(A) ON THIS ISSUE IS U PHELD. II. MACHINES HIRE CHARGES: 12. THE ASSESSEE RECEIVED HIRE CHARGES IN RESPEC T OF CERTAIN MACHINES WHICH WERE GIVEN ON HIRE TO ITS CONTRACTORS WHO WERE ENGA GED IN THE ERECTION AND CONSTRUCTION OF THE POWER GENERATION FACILITY. WE FAIL TO APPRECIATE AS TO HOW SUCH MACHINE HIRE CHARGES CAN BE CONSIDERED AS DERI VED FROM ELIGIBLE UNDERTAKING. THESE DO NOT HAVE ANY DIRECT NEXUS WI TH THE ELIGIBLE UNDERTAKING. THE SOURCE OF SUCH INCOME IS HIRING OF MACHINES, WH ICH IS STEP AWAY FROM THE ELIGIBLE UNDERTAKING. THE VIEW TAKEN BY THE LD. CI T(A) ON THIS SCORE IS UPHELD. III. RENT RECEIPT: 13. THE ASSESSEE RECEIVED RENT FROM ITS EMPLOYEE S QUARTERS AS WELL AS TEMPORARY SHEDS GIVEN TO CONTRACTORS AT PROJECT SIT ES. EVEN THOUGH SUCH INCOME MAY BE CONSIDERED AS ATTRIBUTABLE TO THE ELIGIBLE U NDERTAKING, BUT, IT CAN BY NO STRETCH OF IMAGINATION, BE DESCRIBED AS `DERIVED F ROM THE ELIGIBLE UNDERTAKING. WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE LD. CI T(A) ON THIS ISSUE. ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 9 IV. SUNDRY RECEIPTS : 14. THESE AMOUNTS ARE IN THE NATURE OF ELECTRIC ITY CHARGES, GUEST HOUSE RECEIPTS, SUBSIDIZED TRANSPORT AND MISCELLANEOUS RECEIPTS FRO M THE EMPLOYEES AND CONTRACTORS. THE REASONS GIVEN BY US HEREINABOVE F OR NOT ALLOWING DEDUCTION IN RESPECT OF THE ITEMS MENTIONED ABOVE APPLY WITH FUL L FORCE IN RESPECT OF SUCH SUNDRY RECEIPTS AS WELL. THESE RECEIPTS CANNOT BE CONSIDERED AS DERIVED FROM THE ELIGIBLE UNDERTAKING. WE, THEREFORE, APPROVE T HE VIEW TAKEN BY THE LD. CIT(A) ON THIS SCORE. 15. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. 12. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL IN ASSESSEES OWN CASE IN THE PRECEDING YEARS AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY TH E CIT(A) REJECTING THE CLAIM OF DEDUCTION U/S 80IA ON THE ITEMS AS PER THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 13. GROUND OF APPEAL NO.3 RELATING TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) BEING PREMATURE AT THIS STAGE IS DISMISSE D. 14. GROUND OF APPEAL NO.4 RELATING TO LEVY OF INTER EST U/S 234B, 234C AND 234D BEING MANDATORY AND CONSEQUENTIAL IN NATURE IS DISM ISSED. ITA NO.1385/DEL/2015 (BY THE REVENUE FOR A.Y. 2011- 12) 15. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER:- 1. THE LD.CIT(APPEALS)HAS ERRED IN LAW AND ON FACT S IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IA ON INCOME FROM 'EXCESS PROVISION WRITTEN BACK AND 'LATE PAYMENT SURCHARGE' IN SPITE OF CLEAR CUT FINDING GI VEN IN THE ASSESSMENT ORDER THAT THESE WERE NOT DERIVED BY ASSESSEE FROM THE AC TIVITY OF THE ELIGIBLE BUSINESS. 2. THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON FACT S BY UPHOLDING THE ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 10 SUBMISSION OF THE ASSESSEE IGNORING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT, 183 TAXMAN 349(2 009). 3. THE ORDER OF LD. CIT(APPEALS) BE SET-ASIDE AND THAT OF THE AO BE RESTORED. 16. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUNDS ARE IDENTICAL TO THE GROUNDS OF APPEAL IN ITA NO.1384/DEL/2015 FOR A.Y. 2010-11 FILED BY THE REVENUE. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS R AISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONING THE ABOVE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO.2733/DEL/2017 (BY THE ASSESSEE FOR A.Y. 2012 -13) 17. GROUNDS OF APPEAL NOS.1 AND 2 BEING GENERAL IN NATURE ARE DISMISSED. 18. BY WAY OF GROUND OF APPEAL NO.2, THE ASSESSEE H AS CHALLENGED THE ORDER PASSED BY THE CIT(A) IN DENYING DEDUCTION U/S 80IA IN RESPECT OF THE FOLLOWING ITEMS:- A) INTEREST FROM EMPLOYEES/OTHER INTEREST INCOME B) MACHINE HIRE CHARGES C) RENT RECEIPT D) SUNDRY RECEIPT 19. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUND IS IDENTICAL TO THE GROUND OF APPEAL TAKEN BY THE ASSESSEE IN ITA NO.15 60/DEL/2015 FOR A.Y. 2011-12. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RA ISED BY THE ASSESSEE HAS BEEN DISMISSED. FOLLOWING THE SAME REASONING THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 11 20. GROUND OF APPEAL NO.3 RELATING TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) BEING PREMATURE AT THIS STAGE IS DISMISSE D. ITA NO.3313/DEL/2017 (BY THE ASSESSEE FOR A.Y. 2013 -14) 21. GROUNDS OF APPEAL NOS.1 AND 4 BEING GENERAL IN NATURE ARE DISMISSED. 22. IN GROUNDS OF APPEAL NOS.2 AND 3 THE ASSESSEE H AS CHALLENGED THE ORDER PASSED BY THE CIT(A) IN DENYING DEDUCTION U/S 80IA IN RESP ECT OF THE FOLLOWING ITEMS:- A) INTEREST FROM EMPLOYEES/OTHER INTEREST INCOME INCLU DING INTEREST ON BANK DEPOSITS. B) MACHINE HIRE CHARGES C) RENT RECEIPT D) SUNDRY RECEIPT 23. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUNDS ARE IDENTICAL TO GROUND OF APPEAL TAKEN BY THE ASSESSEE IN ITA NO.1560/DEL/ 2015 FOR A.Y. 2011-12. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE ASSESSEE HAS BEEN DISMISSED. FOLLOWING THE SIMILAR REASONING THE GROUND RAISED B Y THE ASSESSEE IS DISMISSED. 24. IN THE RESULT, THE APPEALS FILED BY THE R EVENUE AS WELL AS THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 28.03.2019. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTAN T MEMFBER DATED: 28 TH MARCH, 2019 DK ITA NOS.1384, 1385 & 1560/D/2015 ITA NOS.2733 & 3313/DEL/2017 12 COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI