DCIT, Faridabad V. M/s NHPC Ltd., Faridabad

ITA 2786/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2009 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Depreciation; Earning of tax free income; Deemed to accrue or arise in india; Rule 8D; Set aside
• Section: 143(3); 14A; 13; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DLEHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.2786/DE L/2016 ASSESSMENT YE AR: 2012-13 DY.CIT, CIRCLE - II, BLOCK-B, CGO COMPLEX, NH-IV, FARIDABAD. VS. M/S NHPC LTD. , NHPC COMPLEX, SECTOR-33, FARIDABAD. PAN:AAACN 0149C (APPLICANT) (RESPONDENT) ITA NO.3121/DEL/2016 ASSESSMENT YE AR: 2012-13 M/S NHPC LTD., NHPC COMPLEX, SECTOR-33, FARIDABAD. PAN:AAACN 0149C VS. ASST. CIT, CIRCLE-II, FARIDABAD. (APPLICANT) (RESPONDENT) APPELLANT BY: SH . NIDHI SRIVASTAVA, CIT-DR RESPONDENT BY: SH. V ED JAIN, ADV. & SH. HIMANSHU AGGARWAL, CA DATE OF HEARING: 12/3/2020 DATE OF ORDER : 20/3/2020 ORDER PER K. NARASIMHA CHARY, J.M. THESE CROSS APPEALS FILED BY THE DEPARTMENT AS WEL L AS ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A), FARID ABAD U/S 250(6) 2 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) FOR ASST. YEAR: 2012-13. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IS A PUBLIC SECTOR UNDERTAKING AND HAS BEEN ENGAGED IN T HE BUSINESS OF CONSTRUCTION OF HYDROPOWER PROJECTS, GENERATION AND DISTRIBUTION OF ELECTRICITY AND CONSULTANCY SERVICES. FOR THE ASSES SMENT YEAR: 2012- 13 HAVE FILED THEIR RETURN OF INCOME ON 27/9/2012 D ECLARING AN INCOME OF RS. 3504, 50, 88, 550/- CLAIMING DEDUCTIO N UNDER SECTION 80 G OF THE INCOME TAX ACT, 1961 (FOR SHORT THE AC T) OF RS. 7 CRORES AND UNDER SECTION 80 IA OF THE ACT AMOUNTING TO RS. 11 94, 93, 38, 007/-AND THEREBY DECLARING TOTAL INCOME OF RS.23,02 ,57,50,543/-; WHEREAS THE TOTAL INCOME UNDER SECTION 115 JB OF TH E ACT WAS DECLARED AT RS. 3466,72,23,316/-. 3. ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 12/1/2015 DETERMINING THE DEEMED INCOME AT RS.36,76 ,58,16, 010/- AND THE REGULAR INCOME AT RS.23,42,34,67,310/ - AFTER MAKING SEVERAL ADDITIONS/DISALLOWANCES WHILE COMPUTING THE INCOME. ASSESSEE CHALLENGED THE SAME BEFORE THE LD. CIT(A). LD. CIT(A) BY WAY OF THE IMPUGNED ORDER GRANTED RELIEF TO THE ASS ESSEE IN RESPECT OF THE DISALLOWANCE UNDER SECTION 14A OF THE ACT RE AD WITH RULE 8D OF THE INCOME TAX RULES, 1962 (THE RULES) TO THE TUNE OF RS.33, 46, 00,000/-, DISALLOWANCE ON ACCOUNT OF PROVISION FOR GRATUITY, LEAVE ENCASHMENT, POST-RETIREMENT MEDICAL BENEFITS, LTC, BAGGAGE ALLOWANCE ETC TO THE TUNE OF RS. 1,73, 03, 86, 645/ - IN COMPUTING THE 3 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 BOOK PROFITS UNDER SECTION 115 JB OF THE ACT AND DIS ALLOWANCE ON ACCOUNT OF AMORTISATION OF LEASEHOLD LAND TO THE TU NE OF RS. 3, 32, 81, 500/-IN COMPUTING BOOK PROFITS IN SECTION 115 JB OF THE ACT, WHILE CONFIRMING THE DISALLOWANCE ON ACCOUNT OF DED UCTION UNDER SECTION 80 IA OF THE ACT TO THE TUNE OF RS.3,31,92, 441/-, DISALLOWANCE CLAIMED BY THE ASSESSEE IN RESPECT OF TEESTA-V POWER STATION TO THE TUNE OF RS. 2, 52, 93, 963/- ON ACCO UNT OF DEPRECIATION AND ADDITION OF RS.3,24,551/- ON ACCOUNT OF INCOME TAX ON PERQUISITE BORNE BY THE ASSESSEE IN RESPECT OF ACCO MMODATION PROVIDED TO ITS EMPLOYEES WHILE COMPUTING THE BOOK PROFIT IN SECTION 115 JB OF THE ACT. 4. CHALLENGING THE ABOVE MENTIONED DELETIONS REVE NUE PREFERRED ITA NO.2786/DEL/2016 WHEREAS AGGRIEVED BY THE ADDITIONS ARE SUSTAINED, ASSESSEE PREFERRED ITA NO. 3121/DEL/2016. NOW WE SHALL PROCEED TO DEAL WITH THESE ISSUES HERE UNDER. 5. IN RESPECT OF THE DISALLOWANCE UNDER SECTION 14 A OF THE ACT READ WITH RULE 8D OF THE RULES, IT COULD BE SEEN TH AT DURING THE FINANCIAL YEAR RELEVANT FOR THE ASSESSMENT YEAR: 20 12-13, THE ASSESSEE HAD EARNED A TOTAL EXEMPT INCOME OF RS.1 3 5, 43, 18, 540/- COMPRISING OF RS. 1, 13, 40, 30, 550/- AS INCOME ON TAX FREE BONDS AND LONG-TERM ADVANCES AND A SUM OF RS.22,02,88,000 /-AS A DIVIDEND INCOME FROM INVESTMENTS. ASSESSEE RECEIVED TAX-FREE 4 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 INTEREST INCOME ON BONDS/LTA WHICH WAS IN LIEU OF L ONG WALL DREW RECEIVABLES ON ACCOUNT OF SALES MADE TO THE BENEFIC IARIES. 6. LEARNED ASSESSING OFFICER DISALLOWED A SUM OF RS .33.46 CRORES BY INVOKING SECTION 14A OF THE ACT READ WITH RULE 8 D OF THE RULES STATING THAT SUCH AN AMOUNT OF EXPENDITURE IN THE F ORM OF INTEREST, ESTABLISHMENT COST, GEN AND ADMINISTRATION EXPENSES ETC WAS BOUND TO BE INCURRED BY THE ASSESSEE TO MANAGE THE INVESTMENTS AND THEREFORE, DISALLOWED SUCH SUM AS BEING NON-BUS INESS PURPOSES. IN APPEAL, LD. CIT(A) DELETED THIS ADDITI ON ON TWO COUNTS. FIRSTLY THAT THE ASSESSING OFFICER HAD NOT RECORDED PROPER SATISFACTION WHILE MAKING THE ADDITION AND SECONDLY THE INVESTMENTS WERE MADE BY THE ASSESSEE OUT OF THEIR OWN FUNDS AN D NOT OUT OF THE BORROWED FUNDS. FURTHER, LD. CIT(A) NOTICED AND RELIED UPON THE ORDERS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YE ARS 18, 2010-11 AND 2011-12 DEALT WITH SIMILAR ISSUE ON IDENTICAL F ACTS. 7. IT IS THE SUBMISSION OF THE LD. AR BEFORE US TH AT THERE IS NO PROPER SATISFACTION RECORDED BY THE LEARNED ASSESSI NG OFFICER BEFORE PROCEEDING TO INVOKE THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE RULES. HE FURTHER SUBMITTED THA T THE ASSESSEE HAD NOT PURCHASED THE BONDS ON THEIR OWN AND THEY H AD TO ACQUIRE THEM BY VIRTUE OF SOVEREIGN DECISION OF THE GOVERNM ENT THAT IS REPATRIATE AGREEMENT BETWEEN THE ASSESSEE, STATE EL ECTRICITY BOARDS AND RESERVE BANK OF INDIA TO ENSURE TIMELY PAYMENTS TO THE ASSESSEE OF THE MODULES; THAT THE INVESTMENT IN NHDC, NAMELY , SUBSIDIARY OF 5 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 THE ASSESSEE, THE SAME WAS MADE OUT OF EQUITY CAPIT AL AND INTERNAL ACCRUALS/EQUITY/RESERVES. ACCORDING TO HIM THE LEAR NED ASSESSING OFFICER IGNORED THE SUBMISSIONS OF THE ASSESSEE THA T THE ASSESSEE HAD NOT INCURRED ANY FURTHER EXPENDITURE TO EARN EX EMPT INCOME. HE SUBMITTED THAT THE LD. CIT(A) ON VERIFICATION OF RECORD FOUND THAT THE INVESTMENTS WERE MADE OUT OF THE OWN FUNDS OF T HE ASSESSEE AND THEREFORE NO DISALLOWANCE COULD BE MADE. HE PLA CED RELIANCE ON THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CASE OF HT MEDIA LIMITED VS. PCIT IN ITA NO. 548 AND 549/2015 BY ORDER DATED 23/8/2017, PCIT VS. UK PAINTS (INDIA) PRIVATE LIMIT ED, LD. CIT(A) VS. TAIKISHA ENGINEERING INDIA LTD (2015) 370 ITR 338 I N SUPPORT OF HIS CONTENTIONS. 8. THOUGH THE LD. DR PLACED RELIANCE ON THE ASSESSM ENT ORDER THERE IS NO DENIAL OF THE FACT THAT THE ASSESSEE SU BMITTED BEFORE THE ASSESSING OFFICER THAT THE INVESTMENTS WERE MADE EV EN OUT OF ASSESSEES OWN FUNDS OR OUT OF INTEREST FREE FUNDS PROVIDED BY THE GOVERNMENT AND NO PART OF THE BORROWED FUNDS WERE U TILISED FOR INVESTMENT. FURTHER IT COULD BE SEEN FROM THE ASSES SMENT ORDER, ON A PERUSAL OF THE COMPUTATION OF INCOME, LEARNED ASS ESSING OFFICER NOTICED THAT NO DISALLOWANCE WAS MADE BY THE ASSESS EE UNDER THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE RULES AND WITHOUT HAVING REGARD TO THE ACCOUNTS OF THE AS SESSEE, LEARNED ASSESSING OFFICER STRAIGHTAWAY PROCEEDED UNDER SECT ION 14A OF THE ACT READ WITH RULE 8D OF THE RULES, WITHOUT RECORDI NG ANY REASON FOR 6 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 NOT AGREEING WITH THE ASSESSEE NOT MAKING ANY DISAL LOWANCE IN THIS REGARD. 9. WHEN THE ASSESSEE RECEIVED TAX-FREE INVESTMENT I NCOME ON BONDS/LTA WHICH WAS IN LIEU OF LONG OVERDUE IS RECE IVABLE ON ACCOUNT OF SALES MADE TO THE PARTIES AND PURSUANT T O THE DRIVE-BY TRADE AGREEMENT BETWEEN THE ASSESSEE, STATE ELECTRI CITY BOARDS AND RESERVE BANK OF INDIA THE ASSESSEE ACQUIRED THE BON DS TO ENSURE TIMELY PAYMENT OF THE WARRANT USE AND THE INVESTMEN T IN NHDC A SUBSIDIARY OF THE ASSESSEE, FOR OUT OF THE EQUITY C APITAL AND INTERNAL ACCRUALS/EQUITY/RESERVES THE INVESTMENT WAS MADE, I T WAS NECESSARY FOR THE LEARNED ASSESSING OFFICER TO RECO RD AS TO WHY HE REACHED A CONCLUSION THAT THE ASSESSEE MUST HAVE IN CURRED SOME EXPENDITURE THAT TOO HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE. LAW LAID DOWN BY THE HONBLE DELHI HIGH COURT ON TH IS ASPECT IN THE DECISIONS RELIED UPON BY THE ASSESSEE IS CLEAR THAT IS ONLY AFTER ARRIVING AT THE DISSATISFACTION AS TO THE CORRECTNE SS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME, LEARNED ASSESSING OFFICER CAN RESORT TO THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE RULES AND ANY CONTRAVENTION IN THIS REGARD WOULD ENURE TO THE BENEFIT OF THE ASSESSEE. 10. FURTHERMORE, THERE IS NO DENIAL OF THE FACT THA T THE INVESTMENTS MADE BY THE ASSESSEE WERE EVEN OUT OF I TS OWN FUNDS OR OUT OF THE INTEREST FREE FUNDS PROVIDED BY THE G OVERNMENT AND IN 7 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 VIEW OF THE DECISIONS OF THE HONBLE PUNJAB AND HAR YANA HIGH COURT IN THE CASE OF CIT VS. MAX INDIA LTD IN ITA NO. 186 OF 2013 BY ORDER DATED 6/9/2016 AND CIT VS. WINSOME TEXTILE INDUSTRI ES LTD 319 ITR 204 AND BOMBAY HIGH COURT IN THE CASE OF CIT VS. HD FC BANK LTD IN ITA NO. 330 OF 2012 BY ORDER DATED 23/7/2014, NO AD DITION COULD BE MADE BY INVOKING RULE8D (2) (II) OF THE RULES. 11. IT IS AN ADMITTED FACT THAT A SIMILAR QUESTION IN HAD ARISEN AND WAS DECIDED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 89, 2010-11 AND 2011-12 IN ASSESSEE S OWN CASE, AS WAS NOTICED BY THE LD. CIT(A) IN THE IMPUGNED ORDER . FURTHER THE FACTS OF THIS ISSUE ARE COVERED BY THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 2006-07 ALSO. 12. IN THE CIRCUMSTANCES WE ARE OF THE CONSIDERED O PINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER BY INVOK ING SECTION 14A OF THE ACT READ WITH RULE 8D OF THE RULES CANNOT BE SUSTAINED AND THE LD. CIT(A) RIGHTLY DELETED THE SAME. NO REASONS TO INTERFERE WITH THE REASONING GIVEN AND CONCLUSIONS REACHED BY THE LD. CIT(A) ON THIS ASPECT AND THEREFORE, THE SAME IS APPENDED. GR OUND NO. 1 OF REVENUES APPEAL IS, ACCORDINGLY, DISMISSED. 13. COMING TO THE DISALLOWANCE OF RS. 1 73, 03, 86, 645/-MADE IN COMPLETING THE BOOK PROFIT UNDER SECTION 115 JB OF T HE ACT ON ACCOUNT OF PROVISION FOR GRATUITY, LEAVE ENCASHMENT , POST- 8 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 RETIREMENT MEDICAL BENEFITS, LTC, BAGGAGE ALLOWANCE ETC., IT WAS DISALLOWED BY THE LEARNED ASSESSING OFFICER ON THE GROUND THAT THE SAID PROVISION WAS NOT ASCERTAINED. LD. CIT(A) WHIL E FOLLOWING THE ADDITION OF THE HONBLE PUNJAB AND HARYANA HIGH COU RT FOR THE ASSESSMENT YEAR:2002-03 AND ALSO HIS OWN ORDERS FOR THE ASSESSMENT YEAR: 2010-11 AND 2011-12 DELETED THE SA ME. 14. IT IS ARGUED BEFORE US THAT THE PROVISION TOWAR DS MEETING DEFINITE LIABILITY TO BE DISCHARGED ON A FUTURE DAT E IN RESPECT OF THE PRESENT EMPLOYEES AND THE QUANTIFICATION OF SUCH LI ABILITY ON THE BASIS OF ACTUARIAL VALUATION AND BASING ON THE REPO RT IS ASCERTAINED LIABILITY AND NOT COVERED UNDER EXPLANATION 1 (C) O F SECOND PROVISO TO SECTION 115 JB OF THE ACT IS FURTHER SUBMITTED TH AT THIS ISSUE HAS BEEN COVERED BY THE ADDITION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT FOR THE ASSESSMENT YEAR 2002-03 IN ASSES SEES OWN CASE WHICH HAS BEEN FOLLOWED CONSISTENTLY BOTH BY THE TR IBUNAL AND THE LD. CIT(A) ALL THROUGH THESE YEARS. 15. THERE IS NO DISPUTE THAT THE DECISION OF THE HO NBLE PUNJAB AND HARYANA HIGH COURT FOR THE ASSESSMENT YEAR: 200 2-03 IN ASSESSEES OWN CASE COVERS THIS ISSUE AND SUCH VIEW OF THE HONBLE HIGH COURT HAS CONSISTENTLY BEEN FOLLOWED BY THE TR IBUNAL AND THE LD. CIT(A). UNLESS AND UNTIL THERE IS CHANGE OF CIR CUMSTANCES, IS NOT POSSIBLE TO TAKE A DIFFERENT VIEW ON AN ISSUE COVER ED BY THE DECISION OF THE HONBLE HIGH COURT AND ALSO THE TRIBUNAL FOR EARLIER YEARS. 9 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 RESPECTFULLY FOLLOWING THE SAME WE UPHOLD THE FINDI NG OF THE LD. CIT(A) ON THIS ASPECT AND DISMISS GROUND NO. 2. 16. NOW COMING TO THE LAST GROUND OF REVENUES APPE AL, IN RESPECT OF THE DISALLOWANCE OF RS.3,32, 81, 500/- M ADE IN COMPUTING BOOK PROFITS UNDER SECTION 115 JB OF THE ACT ON ACCO UNT OF AMORTISATION OF LEASEHOLD LAND, LEARNED ASSESSING O FFICER DISALLOWED THE SAME STATING THAT NO RATE OF DEPRECIATION WAS P RESCRIBED EITHER IN THE COMPANIES ACT OR IN THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) IN RESPECT OF LAND, AND THE CLAIM OF THE ASSE SSEE IS NOT IN ACCORDANCE WITH LAW AND THEREFORE IT IS LIABLE TO B E DISALLOWED. LD. CIT(A) DELETED THE SAME BY RELYING UPON HIS OWN ORD ERS FOR THE ASSESSMENT YEARS: 2010-11 AND 2011-12. 17. IT IS THE SUBMISSION OF THE LD. AR BEFORE US TH AT THE AMORTISATION OF LEASEHOLD LAND WAS MADE AS PER THEI R ACCOUNTING STANDARD 10 OF ICAI AMORTISATION OF LEASEHOLD LAND CLASSIFIED AS PER ACCOUNTING STANDARDS 6 OF ICAI AND THE SAME HAS BEE N DONE TO MEET THE REQUIREMENT OF COMPANIES ACT AND AS SUCH AMORTI SATION IS PERMISSIBLE UNDER SECTION 115 JB OF THE ACT AS THE S AME IS IN ACCORDANCE WITH THE PROVISIONS OF COMPANIES ACT. FU RTHER IT IS SUBMITTED THAT THIS ISSUE HAS BEEN COVERED BY THE A DDITION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR: 2006-07 AND FOLLOWED BY THE TR IBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER AND SUBSEQUENT YEARS. 10 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 18. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. THE SUBMISSIONS MA DE BEFORE US COULD NOT BE CONTRADICTED BY THE REVENUE AND MORE P ARTICULARLY THE FACT THAT THIS ISSUE HAS BEEN COVERED BY THE ADDITI ON OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR: 2006-07 IN ITA NO. 136/2015 BY ORD ER DATED 28/02/2018. FURTHER IT IS ALSO NOT IN DISPUTE THAT A VIEW IN CONSONANCE WITH THE DECISION OF THE HONBLE HIGH CO URT HAS BEEN TAKEN BY THE TRIBUNAL FOR THE ASSESSMENT YEARS: 200 4-05 TO 2011- 12. IN THE CIRCUMSTANCES SINCE IT IS AN ISSUE COVER ED BY THE DECISION OF THE HONBLE HIGH COURT AND ALSO THE TRIBUNAL FOR EARLIER YEARS, RESPECTFULLY FOLLOWING THE SAME WE UPHOLD THE FINDI NG OF THE LD. CIT(A) ON THIS ASPECT AND DISMISS GROUND NO. 3. 19. NOW COMING TO THE APPEAL OF THE ASSESSEE, 1 ST AND 5 TH GROUNDS ARE GENERAL IN NATURE. SECOND-ROUND RELATES TO THE ADDITION OF RS. 3, 31, 92, 441/-ON DISALLOWANCE OF DIRECTION UNDER SEC TION 80 IA OF THE ACT, WHICH THE ASSESSING OFFICER MADE ON THE GROUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA OF THE ACT ONLY FROM ADOPTED FROM GENERATION AND DISTRIBUTION OF PO WER AND NOT FROM OTHER INCOME. 20. IT COULD BE SEEN FROM THE RECORD THAT THE ASSES SEE COMPANY HAD CLIMBED DEDUCTION UNDER SECTION 80 IA OF THE AC T IN RESPECT OF URI POWER STATION STAGE-1, CHAMPERA POWER STATION S TAGE-2 AND RANJIT POWER STATION BY SUBMITTING THE COPIES OF PR OJECT WISE 11 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 AUDITORS CERTIFICATE CERTIFYING THE DEDUCTION UNDER SECTION 80 IA OF THE ACT, BUT THE AO HELD THAT THE ASSESSEE IS ELIGI BLE FOR DEDUCTION UNDER SECTION 80 IA OF THE ACT ONLY FROM PROFIT UPT REND FROM THE GENERATION AND DISTRIBUTION OF POWER AND NOT FROM O THER INCOME. 21. A SIMILAR QUESTION HAD ARISEN IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR: 2010-11 AND 2011-12 AND BY ORDERS DATED 8/5/2019 AND 26/7/2019 FOR THOSE YEARS RESPECTIVELY THE TRIBUNAL HAD TAKEN A VIEW IN FAVOUR OF THE ASSESSEE. LD. CIT (A) FOLLOWED THE DECISION OF THE TRIBUNAL AND GRANTED RELIEF TO THE ASSESSEE. ASSESSEE FURTHER PLACES RELIANCE ON THE ADDITION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. BHARAT SANCHAR NIGAM LTD 388 ITR 371 . 22. SINCE THE LD. CIT(A) FOLLOWED THE BINDING PRECE DENT COVERING THE ISSUE, IN THE ABSENCE OF ANY OTHER DECISION TO THE CONTRARY, IT IS DIFFICULT TO FIND THAT THE CONCLUSIONS REACHED BY T HE LD. CIT(A) ARE NEITHER ILLEGAL OR IRREGULAR. WE THEREFORE RESPECTF ULLY FOLLOWING THE VIEW TAKEN BY THE TRIBUNAL IN ASSESSEES OWN CASE F OR THE ASSESSMENT YEARS: 2010-11 AND 2011-12, UPHOLD THE F INDINGS OF THE LD. CIT(A) AND ANSWER GROUND NO. 2 OF ASSESSEES AP PEAL IN FAVOUR OF THE ASSESSEE. 23. GROUND NO. 3 OF ASSESSEES APPEAL IS IN RELATI ON TO THE ADDITION OF RS.2,52,93,963/- ON ACCOUNT OF DISALLOW ANCE OF DEPRECIATION CLAIMED BY THE ASSESSEE IN RESPECT OF TEESTA-V POWER STATION. ASSESSEE CLAIMS TO HAVE SUBMITTED THE COMP LETE DETAILS OF 12 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 PROJECT WISE ADDITION TO THE FIXING ASSETS, NAMELY, PLANT AND MACHINERY AND BUILDING VIDE LETTER DATED 12/1/2015 WHEREUNDER THE ADDITIONS OF RS.39,43,84,559/-WAS MADE IN RESPE CT OF PLANT AND MACHINERY WHEREAS RS. 1, 38, 19, 242/-WAS MADE TO T HE BUILDINGS, IN RESPECT OF WHICH THE ASSESSEE CLAIMED DEPRECIATION TO THE TUNE OF RS.2,99,24,323/-FOR THIS YEAR. ACCORDING TO THE AS SESSEE THE ADDITION TO PLANT AND MACHINERY INCLUDES THE AMOUNT OF RS.33,72,52,844/- PAID AS THE SALES TAX DEMAND IN R ESPECT OF THE TEESTA-V PROJECT FOR THE FINANCIAL YEARS 1998-99 TO 2007-08 AND WAS CAPITALISED IN THE ASSESSMENT YEAR 2012-13. 24. LD. CIT(A) HELD THAT THE ASSESSEE HAD CAPITALIS ED RS.33,72,52,844/- ON ACCOUNT OF PAYMENT OF SALES TA X DEMAND IN RESPECT OF THE TEESTA-V PLANT, THE LIABILITY FOR WH ICH WAS CRYSTALLISED IN THE ASSESSMENT YEAR 2016-17 ONLY, BECAUSE THE CA PITALISATION OF PAYMENT OF SALES TAX WAS CHALLENGED BY THE ASSESSEE BEFORE THE HONBLE HIGH COURT OF SIKKIM AND WAS DECIDED AGAINS T THE ASSESSEE ON 3/6/2015 AND THEREFORE THE LIABLE TO WAS CRYSTAL LISED ONLY IN THE ASSESSMENT YEAR: 2016-17. 25. LD. AR BY PLACING RELIANCE ON THE DECISION OF T HE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOIDA MEDICARE CENTRE LTD (2015) 378 ITR 65 (DEL) AND SUBMITTED THAT THE AMOUNTS SHOULD BE CAPITALISED IN THE YEAR IN WHICH THE OBLIGATION TO PAY TAX AND INTEREST ARISE FOR THE 1 ST TIME AND THEREFORE, THE COST OF EQUIPMENT SHOULD B E TAKEN INTO CONSIDERATION FROM THAT YEAR. 13 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 26. ON THIS ASPECT, BOTH THE LD. AR AND THE LD. DR SUBMITTED THAT REMANDING THE ISSUE TO THE FILE OF THE LEARNED ASSE SSING OFFICER TO FOLLOW THE DECISION OF THE HONBLE NOIDA MEDICARE C ENTRE LIMITED (SUPRA) WOULD MEET THE ENDS OF JUSTICE. RECORDING T HE SAME WE SET ASIDE THE FINDING OF THE LD. CIT(A) ON THIS ISSUE A ND REMIT THE SAME TO THE FILE OF THE ASSESSING OFFICER TO TAKE A VIEW IN THE LIGHT OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF N OIDA MEDICARE CENTRE LIMITED (SUPRA). 27. THE 3 RD AND LAST ISSUE IN THE ASSESSEES APPEAL RELATE TO THE ADDITION OF RS. 3, 24, 551/-ON ACCOUNT OF INCOME TA X ON PERQUISITE BORNE BY THE ASSESSEE IN RESPECT OF ACCOMMODATION P ROVIDED TO ITS EMPLOYEES WHILE COMPUTING THE BOOK PROFIT UNDER SEC TION 115 JB OF THE ACT. AT THE OUTSET, WE LD. AR SUBMITTED THAT TH IS ISSUE HAS CLEARLY BEEN COVERED BY THE DECISION OF THE TRIBUNA L IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS: 2010-11 AND 2011 -12 BESIDES BEING COVERED BY THE DECISION OF THE MUMBAI TRIBUNA L IN THE CASE OF RASHTRIYA CHEMICALS AND FERTILISERS LTD VS. CIT (20 18) 91 TAXMAN.COM 104, IN FAVOUR OF THE ASSESSEE. LD. COUNSEL SUBMITT ED THAT THE DELETION OF THE TRIBUNAL WAS RENDERED IN MAY, 2019 WHEREAS THE LD. CIT(A) DECIDED THIS ISSUE WAY BACK ON 14/3/2016 AND THEREFORE THE LD. CIT(A) HAD NO BENEFIT OF THE VIEW TAKEN BY THE TRIBUNAL ON THIS ASPECT. 28. CONSIDERING THE FACT THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL HAD TAKEN A VIEW IN FAVO UR OF THE 14 ITA NOS.2786 & 3121/DEL/2016 ASST. YEAR: 2012- 13 ASSESSEE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR: 2010-11 AND 2011-12 WHILE FOLLOWING THE DECISION OF THE MUM BAI TRIBUNAL IN THE CASE OF RASHTRIYA CHEMICALS AND FERTILISERS LIM ITED (SUPRA), IN THE ABSENCE OF ANY DECISION TO THE CONTRARY BY ANY HIGH ER FORUM, WE HOLD THE ISSUE IN FAVOUR OF THE ASSESSEE AND DIRECT THE DELETION OF THE ADDITION OF RS.3, 24, 551/-MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF INCOME TAX ON PERQUISITE BORNE BY THE ASSESSEE IN RESPECT OF ACCOMMODATION PROVIDED TO ITS EMPLOYEES WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115 JB OF T HE ACT. GROUND NO. 4 IS ACCORDINGLY ALLOWED. 29. IN THE RESULT AND APPEAL OF THE ASSESSEE IS ALL OWED IN PART AND FOR STATISTICAL PURPOSE. PRONOUNCED IN OPEN COURT ON THIS THE 20 TH MARCH, 2020. SD/- SD/- (G.S. PANNU) (K. NARASIMHA CHARY ) VICE PRESIDENT JUDICIAL MEMB ER DATED: 20/3/2020 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI