Madhya Gujarat Vij Company Ltd., Baroda V. The ACIT,Range-4, Baroda

ITA 3028/AHD/2014

AI Insights

The case involves multiple appeals by Madhya Gujarat Vij Company Ltd. and the revenue against the orders of the Commissioner of Income Tax (Appeals), Vadodara, concerning the assessment years 2009-10 to 2013-14. The primary issues revolved around the correct percentage of income recognition on government grants and subsidies, the classification of interest income from staff loans and advances, and the treatment of gains from the sale of fixed assets. The tribunal examined the submissions, relevant legal provisions, and precedents to arrive at its decisions, which included setting aside some issues for re-evaluation by the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127145 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 25-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 16-11-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Business expenditure; Opportunity of being heard; Cost of acquisition; Set aside; Capital Gains
• Section: 32; 28; 143(3); 234B; 115JB; 48; 13

Judgement Text

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ D’’ BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Sr. No. ITA No. Asstt. Year Name of Appellant Name of Respondent 1. No.2080/Ahd/2012 2009-10 Madhya Gujarat Vij Company Ltd., Sardar Patel Vidyut Bhavan, Race Course Circle, Baroda-39007. PAN: AADCM7439H Addl. Commissioner of Income Tax, Range-4, Baroda. 2. No.1999/Ahd/2012 2009-10 D.C.I.T, Circle-4, Baroda Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H 3. No.3500/Ahd/2015 2009-10 Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H A.C.I.T, Circle-4, Baroda 4. No.561/Ahd/2014 2010-11 Madya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H Addl.C.I.T, Range-4, Baroda 5. No.680/Ahd/2014 2010-11 A.C.I.T, Circle-4, Baroda Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H 6. No.3028/Ahd/2014 2011-12 Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H A. C.I.T, Range-4, Baroda. 7. No.3316/Ahd/2014 2011-12 D. C.I.T, Circle-2(1)(2), Baroda. Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H 8. No.911/Ahd/2016 2012-13 Madhya Gujarat Vij Company Ltd., Baroda D.C.I.T, Circle-2(1)(2), Baroda. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 2 PAN: AADCM7439H 9. No.1190/Ahd/2016 2012-13 D.C.I.T, Circle-2(1)(2), Baroda. Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H 10. No.393/Ahd/2018 2013-14 Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H A.C.I.T, Circle-2(1)(2), Baroda. 11. No.449/Ahd/2018 2013-14 A.C.I.T, Circle-2(1)(2), Baroda. Madhya Gujarat Vij Company Ltd., Baroda PAN: AADCM7439H Assessee by : Shri M.K. Patel with Shri M.J Shah, A.Rs Revenue by : Shri Darsi Suman Ratnam, CIT.D.R With Shri Ashok Kumar Suthar, Sr.D.R स ु नवाई क तार ख/Date of Hearing : 26/07/2023 घोषणा क तार ख /Date of Pronouncement: 18/08/2023 आदेश/O R D E R PER BENCH: The captioned appeals have been filed at the instance of the Assessee and the Revenue against the separate orders of the Learned CIT(Appeals), Vadodara, arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Years 2009-2010 to 2013-14. First, we take up ITA No. 2080/AHD/2012, an appeal by the assessee for A.Y. 2009-10 ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 3 2. The assessee has raised following grounds of appeal: 1.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the additions of 19,65.01.400/- on account of Capital Grants & Subsidies and Consumers' Contribution on the ground that the appellant should transfer 15% of the total Grants/subsidies/consumer contribution received during the year as against 10% offered by the appellant. 2.0 The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming the additions amounting to 12.18.05.000/ on account of Wheeling Charges refunded during the year which have already been taxed as income in earlier years. 3.0 The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming the additions with respect to the interest income from staff loans & advances amounting to 283,52,000/- as Income from Other Sources as against the Business Income. 4.0 The learned Commissioner of Income Tax (Appeals) erred in law and facts has set aside the additions with respect to the Income from Gain on Sale Assets amounting to 15,80,000/- with the direction to re-verify the claim in terms of the provisions of section 50 of the IT Act. 5.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has dismissed the ground relating to the initiation of penalty proceedings under section 271(1)(c) of the IT Act. 6.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has dismissed the ground relating to charging interest under section 234B and 234C of the Income Tax Act, 1961. 7.0 The appellant craves leave to add to, alter, delete or modify any of the grounds of appeal either before or at the time of hearing of this appeal. 3. The first issue raised by the assessee is that the learned CIT(A) erred in confirming the action of the AO for recognizing income on government grant & subsidy @ 15% instead @ 10 % as offered by it. 4. The necessary facts are that assessee, for infrastructural development in the field of electricity distribution for certain underdeveloped area and class of consumers, received certain financial assistance from Government of Gujarat in the form of subsidies/ grants towards cost of capital assets. In addition to subsidies and grants, the assessee as per the rules framed by the Gujarat Electricity Regulatory Commission, recovered certain amounts from new ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 4 consumers towards development of infrastructure of electrical line and cable network systems to provide the electricity at the consumers doorstep while releasing the connection to such customers. The assessee capitalized all these receipts and at the end of the year recognized income @ 10% of the closing value of such subsidies, grants, and recoveries from the customers. Accordingly, the assessee for the year under consideration offered income of Rs. 3930.03 lacs in the following manner: Particular Amount (in lacs) Opening balance of government grants & consumer contribution Rs. 23,745.27 Addition during the year Rs. 15,555.01 Gross total at the end of the year Rs. 39,300.28 Income recognized @ 10 in P&L account Rs. 3,930.03 Closing balance at the year end Rs. 35,370.25 4.1 The AO found that the government grants and recoveries from consumer were made towards capital assets on which the assessee is claiming depreciation at the rate of 15% per annum. Therefore, according to the AO, the income should have been recognized @ 15% instead of 10% of the amount discussed above. The provision of accounting standard-12 states that subsidies or grants received for depreciable assets should be treated as deferred income and should be recognized in profit and loss of account on a systemic and rationale basis. Likewise, the provisions of section 43(1) of the Act also provides that the cost of capital assets should be reduced by the amount of subsidies or grants. Thus, following the provision of section 43(1) of the Act, the cost of capital assets should have been reduced by the year end amount of grants, then the profit of the assessee ultimately would have increased. Consequently, the recognition of income on closing value of grants & consumer contribution would have been rational and reasonable. Hence, the AO worked the amount of income on closingvalue of grants & consumer contribution @ 15% and accordingly made ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 5 addition of Rs. 19,65,01,400/- being an additional amount of 5% of the amount as discussed above. 5. On appeal by the assessee, the learned CIT(A) confirmed the finding of the AO by observing as under: 5.4 I have given my careful consideration to the submissions and facts of the case. My predecessor vide his order dated 18.3.2010 in appeal no CAB/III/104/08-09 for the AY 2006-07 in the appellant's own case has confirmed additions made on similar ground by observing as follows: "It is undisputed fact that the capital grant and consumer contribution is towards cost of capital assets as described in the balance sheet itself. Since these grants. are towards cost of capital assets, the issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Sawhney Steel (P) Ltd. This fact is undisputed. Therefore, there is no error in the findings of the AO. In fact, if appellant's submission is accepted, the whole amount would be liable to tax during the year as the appellant's practice of offering 10% of the year end balance as income is not sustainable under the provisions of IT Act, 1961. This ground is therefore dismissed." 6. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 6.1 The learned AR before us submitted that the identical issue in the own case of the assessee for the earlier assessment year 2008-09 in ITA No. 1709/AHD/2012, the ITAT vide order dated 28-02-2022 has set aside the issue to the file of the AO. Accordingly, the learned AR prayed for similar kind of direction by setting aside the issue to the file of the AO for fresh adjudication as per the provisions of law. 6.2 On the other hand, the learned DR vehemently supported the order of the authorities below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset, we note that the issue in the dispute regarding the recognition of income on account of government grants and customer contribution in the case of present assessee was also there in the AY ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 6 2006-07 which has been adjudicated by the ITAT in ITA No. 2583/Ahd/2010 vide order dated 09.11.2016 wherein it was held that receipt of grants was in connection with capital assets. Therefore, the same is required to be reduced from the cost of the capital as prescribed under section 43(1) read with explanation 10 to section 43(1) of the Act. However, the issue has been restored back to the A.O. to adjudicate afresh after verifying the amount of grants to be apportioned relating to different assets and calculate the amount of depreciation allowance accordingly. The relevant finding of the coordinate bench reads asunder: 17. We have heard the rival contentions and perused the material on record. Through this ground assessee has challenged the order of ld. CIT(A) sustaining the disallowance of depreciation at Rs.10,84,81,976/- by observing that capital subsidy and grant received are to be reduced from fixed asset and depreciation to be allowed on the remaining balance. We observe that the Government gives grant/subsidy to the holding company and then it is allocated to the assessee which is one of the subsidiary company and further such subsidy are not granted to actually to meet the cost but are granted as an inclusive of rural economically backward unviable areas. Assessee received subsidies on different schemes viz. Rural Electrification and Tribal area Electrification and the assets cannot be bifurcated into Rural/Tribal area etc. 17.1 There is no dispute to the fact that the grants received from the Government are capital in nature but they have not been given specifically for acquiring a particular asset. In such situation provision of section 43(1) Explanation 10 of the Act squarely applies for the treatment of such capital grant. Relevant provisions of section 43(1) of the Act read as under :- 43. In sections 28 to 41 and in this section, unless the context otherwise requires (1) "actual cost" means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met96 directly or indirectly by any other person or authority: [Provided that where the actual cost of an asset, being a motor car which is acquired by the assessee after the 31st day of March, 1967, [but before the 1st day of March, 1975,] and is used otherwise than in a business of running it on hire for tourists, exceeds twenty- five thousand rupees, the excess of the actual cost over such amount shall be ignored, and the actual cost thereof shall be taken to be twenty-five thousand rupees.] [Explanation 10.--Where a portion of the cost of an asset acquired by the assessee has been met directly or indirectly by the Central Government or a State Government or any authority established under any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name called), then, so much of the cost as is relatable to such subsidy or grant or reimbursement shall not be included in the actual cost of the asset to the assessee : Provided that where such subsidy or grant or reimbursement is of such nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total subsidy or reimbursement or grant the same proportion as such asset bears to all the assets in respect of or with reference to which the subsidy or grant or reimbursement is so received, shall not be included in the actual cost of the asset to the assessee.] 17.2 Proviso to Explanation -10 to section 43(1) contemplates that subsidy or grant or reimbursement which cannot be relatable to the assets acquired then grant amount to be apportioned in the assets at the same proportion as such assets bears all the assets. We ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 7 further observe that ld. Assessing Officer has given following finding for application of explanation -10 to section 43(1) by observing as follows:- 4.2 The contention of the assessee that Consumer's Contribution and Capital Grant are capital in nature is found tenable, but its treatment, of 10% thereof transferred to P & L account every year is not in accordance with the provisions of the Act. As envisaged in explanation 10 to section 43(1), where a portion of the cost an asset acquired by the assessee has been met directly or indirectly by the Central Government or State Govt. or any Authority established under any law, or by any other person, in the form of subsidy or grant or reimbursement then in a case where the subsidy is directly relatable to the asset, such subsidy shall not be included in the actual cost of the assets. In a case, where such subsidy or Grant or reimbursement, is of such nature that, it cannot be directly relatable to any particular assets, so much of the amount which bears to the total subsidy or reimbursement or Grant the same proportion as such asset bears to all the assets in respect of which or with reference to which such grant or subsidy or reimbursement is received shall no be included in the actual cost of that assets to the assessee. 4.3 In view of the clear provisions of the Act as stated supra and the assessee himself have admitted that the subsidy and grant received are towards Capital assets, the assessee should have reduced the same from the Capital asset to arrive at the actual cost. However the assessee has failed to do so and also not furnished the details of fixed assets in respect of which the subsidy and grants have been received. Hence and inference is drawn that the Govt. grants/subsidy and consumers' contribution are relatable to fixed assets of plant & machinery. The assessee has claimed depreciation on Plant & Machinery as under: 17.3 We further observe that similar type of issue came up before the Tribunal in the case of GETCL(supra) which was adjudicated by the Co-ordinate Bench by observing as follows :- 20. We find that in the instant case, the CIT{A) held that excess depreciation claimed on account of capital grant comes to Rs.18.93 crores being 15% of Rs.176,62,04,718/-, i.e. Rs.26,49,30,708/- minus Rs.17,20,37,655/-, which amounts to Rs.9,28,93,053/-, and 15% of Rs.6427.94 lakhs amounting to Rs.964.191 lakh. The submissions of the assessee before us is that the uniform rate of 15% adopted by the CIT(A) is not justified. As per provisions of section 43(1} of the Act, the capital grant should be reduced from the cost/WDV of the relevant asset, and thereafter the depreciation is to be calculated. Thus, the capital grant receipt in respect of asset, on which depreciation is allowable at the rate different from 15% should be worked out as per the applicable rate. The DR could not point out any mistake in the above submission of the assessee. which we find is in accordance with law. We, therefore, set aside the orders of the lower authorities on this issue, and restore the matter back to the file of the AO for adjudication afresh after verifying the proportionate amount of grant relating to different asset, and applying the actual rate of depreciation which relate to these assets.Thus, this ground of appeal of the assessee is allowed for statistical purpose. 17.4 In the light of the decision of the Co-ordinate Bench discussed above and in the light of proviso to Explanation -10 to section 43(1) of the Act we find it justified to restore the issue back to the file of Assessing Officer to adjudicate afresh after verifying the apportioned amount of grant relating to different assets and calculate the depreciation at the rates applicable to such assets. Needless to mention that all necessary details will be provided by the assessee to the Assessing Officer in order to calculate the correct amount of depreciation, Ld. Assessing Officer to provide proper opportunity of being heard should be given to the assessee. Accordingly, this ground of assessee is allowed for statistical purposes. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 8 7.1 The above finding of the of the coordinate bench has been followed in the subsequent year i.e. A.Y. 2008-09 in ITA No. 1709/Ahd/2018 vide order dated 28- 2-2022. Therefore, following the concurrent view taken by the ITAT, we hereby restore the issue to file of the AO for fresh adjudication in accordance with the direction of the ITAT in assessment year 2006-07 and as per the provision of law. Hence the ground of the assessee is hereby allowed for statistical purposes. 8. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowances of refund of wheeling charges for Rs. 12,18,05,000/- only. 9. The assessee in the year under consideration debited profit and loss account on account of refund of wheeling charges amounting to K 12,18,05,000/- to the company namely M/s Gujarat Alkalies and Chemicals Limited (hereafter M/s GACL). As per the assessee, the wheeling charges were recovered in the earlier year which was accounted as income but refunded in the year under consideration. The details of the same stand as under: 1. FY 2006-07 Rs. 5.74 Crores 2. FY 2007-08 Rs. 6.43 Crores Total Rs. 12.18 Crores 9.1 However, the AO found that the assessee in the earlier year i.e. F.Ys. 2006- 07 and 2007-08 has offered income from the wheeling charges amounting to K7.80 crores only which was also including the income from wheeling charges from other customers/ companies as well. As such, the assessee failed to furnish the details based on the documentary evidence that the amount refunded to the company namely M/s GACL has been accounted as income in the earlier years. Likewise, the AO also observed that the assessee has also not furnished the details to establish that the refund of K 12,18,05,000/- was crystallized in the year ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 9 under dispute. Thus, the AO disallowed the same and added to the total income of the assessee. 10. Aggrieved assessee preferred an appeal to the learned CIT(A) who confirmed the order of the AO by observing that assessee has not brought anything/ any material on record contrary to the finding of the AO. 11. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 11.1 The learned AR before us contended that wheeling charges was offered income by the assessee the earlier years. Therefore, on the refund of the same, deduction should be allowed. 11.2 On the other hand, the learned DR before us vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion and the material available on record, we note that the Vadodara Plant of M/s GACL was drawing power from their captive power plant (CCP) at Dahej as well as from M/s Gujarat Industrial Power Company Limited (hereafter M/s GIPCL) by utilizing the transmission and/or distribution system of the assessee company. The assessee company as per the GERC open access regulation notification dated 29-09-2005 and tariff order dated 06-05-2006 by the GERC applicable for F.Y. 2006-07 and 2007-08 issued monthly bill on M/s GACL for transmission/wheeling of power from generation point to point of use i.e. wheeling of power from the power generation plant of M/s GIPCL and CPP-Dahej to Vadodara Plant of M/s GACL. The bill issued included wheeling charges on a per MW per day basis. Subsequently, M/s GACL filed a petition before GERC against the applicability of charges as per GERC open ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 10 access regulation dated 29-09-2005 and tariff order dated 06-05-2006. Thereafter, the dispute was resolved between the assessee company and the company namely M/s GACL by entering an MOU dated 1 st March 2008 wherein it was agreed not to charge Wheeling charges and accordingly agreed for revision of the bill issued with effect from 1st April 2006. It was also agreed that whatever amount received on account of Wheeling charges will be refunded to M/s GACL. 12.1 From the above, assessee company has charged wheeling charges for transmission of power to the plant of the M/s GACL which was decided to be refunded as per the memorandum of understanding dated 1st March 2008. On perusal of minutes of meeting dated 1 st March 2008 and the letter dated 8 th April 2008 written by the senior management of the assessee company to the office of field engineer for issuing the revised bill, we find that the quantum of wheeling charge collected for the period April 2006 to March 2008 which needs to be refunded has not been mentioned. However, we find that M/s GACL has written a letter to the Assessee company dated 31 st October 2008 and 21 st November 2008 demanding refund of wheeling charges amounting to Rs. 68.37 lakhs paid for the period 1st April 2006 to 31st August 2006. The said letter is available on page 11 to 13 of the paper book. Likewise, M/s GACL also issued a confirmation letter on the request of the assessee company dated 1 st May 2012 wherein M/s GACL confirmed that an amount of K 12,18,31,168.99 being wheeling charges, charged by the assessee company in the various bills issued for F.Y. 2006-07 and 2007-08 has been adjusted with the electricity bill issued for the month of March 2009. 12.2 On the other hand, we note that the AO has given finding that the assessee for F.Ys. 2006-07 and 2007-08 has offered income on account of wheeling charges for Rs. 7.80 crores only which must be included wheeling charges charged from other customer also. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 11 12.3 Thus, from the previous discussion, it is transpired that the assessee company charged a fee for wheeling of power from M/s GACL w.e.f. 1 st April 2006 which as per the MOU dated 1 st March 2008 agreed to be refunded/dropped. However, the fact regarding quantum of amount charged/collected and offered as income by the assessee company during the period April 2006 to March 2008 is not clear. Therefore, for the sake of justice and fair play, we hereby set aside the issue to the file of the AO for de-novo adjudication as per the law. The assessee will provide all the necessary details about the income offered on account of wheeling charges offered in relation to M/s GACL. Hence, the ground of appeal of the assessee is hereby allowed for statistical purposes. 13. The next issue raised by the assessee vide ground Nos. 3 & 4 of its appeal is that the learned CIT(A) erred in holding the interest income from staff loans & advances as income from other sources as well erred in setting aside the issue of gain on sale of fixed assets to AO. 14. The necessary facts are that the assessee in the return of income filed for the year under consideration treated interest income on loans & advances given to the staff for Rs. 83,52,000/- and gain on sale of fixed assets for Rs. 15,80,000/- as business receipt. However, the AO in the assessment order treated such income as income from other sources. 15. On appeal by the assessee, the ld. CIT(A) regarding the recharacterization of interest income on loans & advances given to the employee held that the assessee is not in the business of money lending. Therefore, the AO rightly treated the same as income from other sources. 15.1 Regarding the gain on sale of fixed assets, the learned CIT(A) held that the same should be routed through the block of assets and will be governed by the provisions of section 50 of the Act. Accordingly, the ld. CIT-A directed the ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 12 assessee to verify whether WDV of the fixed assets was reduced by the sale consideration or not if the same has been done, then no addition needs to be made. 16. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 16.1 The learned AR with respect to the interest income from the staff loans submitted that such loans were given to the staff for better performance and therefore the interest income has direct nexus with the activity of the assessee. Similarly, the salary given to the staff was treated as business expenses on the reasoning that staff was working for the company and thus the interest income from the same staff should also be treated as income from the business and profession. The learned AR left the issue at the discretion of the bench regarding the gain on the sale of assets. 16.2 On the other hand, the learned DR vehemently supported the order of the authorities below. 17. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case, the assessee has shown a certain kind of income under the head business and profession whereas the AO treated such income as income from other sources. The income in dispute details as under: 1. Interest income on loans & advances to staff Rs. 83,52,000/- 2. Gain on sale of fixed asset Rs. 15,80,000/- 17.1 As regards the interest income shown by the assessee on the loans & advances given to the employees, we note that there was identical issue before this tribunal in case of sister concern of the assessee namely Gujarat Energy ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 13 Transmission Corporation Ltd (GETCO) in ITA NO 753/AHD/2018, wherein the coordinate bench vide order 24-08-2022 set aside the issue to the file of the AO for fresh adjudication by observing as under: 9. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record and also gone through the order passed by the Hon’ble Orissa High Court in the case of Odisha Power Generation Corporation Ltd. (supra). It appears that the Hon’ble Orissa High Court while dealing with the issue the Court was pleased to observe as follows: 12. The Assessee offered an explanation regarding interest income earned by it, from advances given to its employees as well as provision of electricity and water charges collected from water through its employees and contractors for facilities in the township, receipt from transit hostel, sale of scrap, insurance claim etc. The facilities were given to its employees for better conditions of employment. This was to improve the overall efficiency of the undertaking which is devoted to the single purpose of generation of power. The Court, therefore, has no difficulty in accepting the submission of the Assessee that the interest received on advances and loans given to its employees are receipts in normal course of carrying its business and should be considered as income derived from its essential business activities. Likewise, the late payment by GRIDCO for the electricity supplied, is sought to be made up by GRIDCO by issuing bonds on which the Assessee earns interest. This also therefore, has a direct nexus with the essential business activity of the Assessee. 9.1. In that view of the matter we find it fit and proper to direct the Ld. AO to consider the issue afresh upon examining the same in regard to the head of income upon considering the relevant evidence in the light of the observation made by the Hon’ble High Court as mentioned hereinabove. We, thus, pass order accordingly. This ground is allowed for statistical purposes. 17.2 Respectfully following the finding of the coordinate bench in above mentioned case, we hereby set aside the issue of interest income on loans & advances given to staff to file of the AO for fresh adjudication as per the direction given in the above case and as per the provisions of law. 17.3 Regarding the income on the sale of fixed assets, we note that there is a direct provision under section 50 of the Act which reads as under: Special provision for computation of capital gains in case of depreciable assets. 50. Notwithstanding anything contained in clause (42A) of section 2, where the capital asset is an asset forming part of a block of assets in respect of which depreciation has been allowed under this Act or under the Indian Income-tax Act, 1922 (11 of 1922), the provisions of sections 48 and 49 shall be subject to the following modifications :— (1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block of assets during the previous year, exceeds the aggregate of the following amounts, namely :— ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 14 (i) expenditure incurred wholly and exclusively in connection with such transfer or transfers; (ii) the written down value of the block of assets at the beginning of the previous year; and (iii) the actual cost of any asset falling within the block of assets acquired during the previous year, such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets; (2) where any block of assets ceases to exist as such, for the reason that all the assets in that block are transferred during the previous year, the cost of acquisition of the block of assets shall be the written down value of the block of assets at the beginning of the previous year, as increased by the actual cost of any asset falling within that block of assets, acquired by the assessee during the previous year and the income received or accruing as a result of such transfer or transfers shall be deemed to be the capital gains arising from the transfer of short-term capital assets: 17.4 The assets which have gone into the block of assets is eligible for depreciation as provided under section 32 of the Act. However, once the block ceases to exist for any reason and any gain arises then the same shall be treated as income under the head capital gain only. There is a specific and direct provision under section 50 of the Act dealing with the situation enumerated above. Accordingly, we do not find any infirmity in the finding of the learned CIT(A). Thus, in view of the above detailed discussion, the grounds of appeal raised by the assessee are hereby partly allowed for statistical purposes. 18. The next issue raised by the assessee vide ground Nos. 5 to 7 of its appeal are either premature, consequential, or general in nature, thus they do not require any separate adjudication. Hence, the same are dismissed as infructuous. 19. In the result, the appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA No. 1999/Ahd/2012 an appeal by the Revenue for A.Y. 2009-10 ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 15 20. The only issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition of Rs. 2,48,97,244/- made on account of waiver of interest. 21. The AO during the assessment proceedings found that the assessee has shown interest expenses of Rs. 2,44,10,653/- and Rs. 4,86,591/- against the government loan being “ADB-1804 Loan” and “APDRP Loan” whereas the Government of Gujarat vide notification dated 07-11-2008 has waived off interest on the “ADB-1804 Loan” and “APDRP Loan” for the period from 2005-06 to 2010- 11. Accordingly, a question was raised to the assessee to explain why the interest was not reversed. 21.1 The assessee in reply submitted that it has made provisions on account interest on government loan in the A.Y. 2005-06 and 2006-07. However, once the government waiver notification came on 07-11-2008, no further provision was made from A.Y. 2007-08 onward on account of government loan and the provision made for earlier years was also reversed in the A.Y. 2007-08. The assessee accordingly contended that the entire interest on the relevant loan has already been reversed and shown as income. 21.2 However, the AO disagreed with the submission of the assessee and held that no justification was provided by the assessee about the claim of interest on the “ADB-1804 Loan” and “APDRP Loan” which has already been waived off by the government vide same notification as discussed above. Hence, the AO disallowed the claim of interest for Rs. 2,48,97,244/- (Rs. 2,44,10,653/- + Rs. 4,86,591/-) and added to the total income of the assessee. 22. The aggrieved assessee preferred an appeal before the learned CIT(A) and submitted that Government of Gujarat vide letter dated 07-11-2008 waived off the interest on 23 types of loan allotted to the Gujarat Urja Vikash Nigam Limited- GUVNL (holding company) which were outstanding as on 1 st April 2005. The ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 16 interest was waived off to the extent of loan amount of Rs. 841,77,39,174/- only. Out of such amount, certain loans were allocated to it by the holding company GUVNL and accordingly interest in relation to such loan was reversed during the A.Y. 2007-08 whereas the interest expenditure claimed during the year relates to new loan disbursed after 1 st April 2005 which has not been waived off by the Government. The assessee in support submitted the details of loans disbursed after 1 st April 2005. 22.1 The learned CIT(A) after considering the facts in totality deleted the addition made by the AO by observing as under: I have considered the appellant's submissions and the AO's order. The appellant's submission that only the interest on loans from ADB and APDRP disbursed to erstwhile GEB was waived is found to be correct from the copy of notification in this regard. This notification clearly states that interest charges payable by the Gujarat Urja Vikas Nigam Ltd. on the outstanding Govt. Loans of . 842.10 crore as on 31st March 2005 as shown in the Annexure 'A" attached with this for a period of six years from 2.05.06 to 20.10.11 is waived. Thus this G.R. covers interest on loans outstanding as on 31.3.2005 and not on loans raised subsequently. Hence, the appellant has rightly claimed deduction for interest on loans raised after 31.03.2005. Hence, the addition made by the AO is directed to be deleted. 23. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 23.1 The learned DR before us reiterated the findings contained in the assessment order. 23.2 On the other hand, the learned AR before us filed a paper book running from pages 1 to 67 and contended that the interest was charged to the profit of loss account on the amount of loan received after 31 March 2005 which was not waived off and therefore, the same is eligible for deduction. 24. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the assessee claimed interest expenses for Rs. 2,48,97,244/- on ADB & ADRP loan (government loan) which has been ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 17 disallowed by the AO by holding that government of Gujarat vide notification dated 07-11-2008 waived of the interest on ADB & ADRP loan for a period of six years starting from 1 st April 2005. On appeal by the assessee, learned CIT(A) was pleased to delete the addition made by the AO. 24.1 In this regard, we perused the notification issued by the Government of Gujarat dated 07-11-2008 which is placed on pages 18 to 19 of the paper book. We find that various types of loan given to M/s GUVNL (holding company) were outstanding for Rs. 842 crores as on 1 st April 2005. The Government in pursuance to financial restructuring plan of electricity board waived off the interest for the year 2005-06 to 2010-11 on outstanding loan of Rs. 842 crores. Thus, what is transpired that the government has only waived off interest on the loan of Rs. 842 crore which was outstanding as on 1 st April 2005. It is also pertinent to note that loan amounting to Rs. 842 crore was outstanding on the part of M/s GUVNL, the parent company of the assessee out of which only part amount has been disbursed to the present assessee. Therefore, in our considered opinion interest expenses in relation to loan amount which was disbursed to the assessee by the M/s GUVNL out of Rs. 842 crore loan and outstanding as on 1 st April 2005 only was required to reversed. As such, the assessee would be entitled to claim the interest expenses on such loans disbursed after 1 st April 2005. 24.2 The assessee before the lower authorities has time and again contended that the ADB & ADRP loan on which interest expenses claimed during the year were disbursed to it after 1 st April 2005. The contention of the assessee has been found correct by the learned CIT(A). The learned DR before us has neither brought any material contrary to finding of the ld. CIT-A nor established that interest expenses claimed on ADB & ADRP loans were belonging to the loans disbursed to the assessee before the 1 st of April 2005. Therefore, we do not find any reason to interfere in the finding of the learned CIT(A). Hence, the ground of appeal of the revenue is hereby dismissed. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 18 25. In the result, the appeal of the Revenue is hereby dismissed. Coming to ITA No. 3500/Ahd/2015, an appeal by the assessee for A.Y. 2009-10 26. The only issue raised by the assessee is that the learned CIT(A) erred in confirming the levy of penalty under section 271(1)(d) of the Act for Rs. 77,97,000/-. 27. The necessary facts are that the assessee for the year under consideration declared income at Rs. NIL after claiming setoff of brought forwarded losses for Rs. 1,66,46,592/- only. The assessee in the return of income also declared the value of fringe benefit at nil. However, the AO found that the assessee has incurred certain expenses aggregating to Rs. 14,68,79,061/- which attract the provision of fringe benefit tax. Thus, the AO vide order dated 09-12-2011 assessed the value of fringe benefit under the provision of section 115WE(3) at Rs. 2,29,38,644/- only. The AO also initiated the penalty proceeding under section 271(1)(d) of the Act for furnishing inaccurate particular of fringe benefit but the same was kept in abeyance as the assessee preferred appeal before the ld. CIT(A) against the assessment of fringe benefit tax. Subsequently, the learned CIT(A) vide order dated 25-04-2012 confirmed the order of the AO. Accordingly, the penalty proceedings under section 271(1)(d) of the Act were initiated vide notice dated 18-03-2014. 27.1 The assessee during the penalty proceeding contended that all the necessary details regarding the issue of fringe benefit had been made available at the time of assessment. Therefore, there was no concealment or filing of inaccurate particular of fringe benefit of whatsoever on its part. There was no ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 19 mala-fide intention for concealment of fringe benefit. Hence, the penalty proceeding should be dropped. 27.2 However, the AO disagreed and found that the assessee had incurred expenditures which attract the provision fringe benefit but failed to pay the tax on the same. The assessee willfully showed the value of fringe benefit at NIL despite having clear provision in this regard. Thus, the AO levied the penalty under section 271(1)(d) of the Act for Rs. 77,96,845/- being 100% of the amount of tax sought to be evaded on the charges of furnishing inaccurate particular read with explanation 1 to section 271(1)(d) of the Act. 28. On appeal by the assessee, the learned CIT(A) confirmed the levy of penalty by observing as under: I have carefully considered the facts on record and submissions of the Ld.AR. I have also gone through the assessment order of AO dated 08.12.2011 and appellate order of CIT(Appeals) dated 25.04.2012. Undisputedly, the return of income was filed on 29.09.2009, disclosing value of Fringe Benefits at Nil. It may be noted that the Auditor of appellant company had worked out the value of Fringe Benefits at Rs. 2,29,38,644/- as per Annexure-II of Form No. 3CD, yet the appellant did not disclose any value of Fringe Benefit in the return. This act of the appellant goes to establish that the appellant has consciously furnished inaccurate particulars of Fringe Benefit by not disclosing any value of Fringe Benefit. 4.1 The explanation furnished at an assessment stage and the appellate stage is also found to be incorrect because the appellant has failed to establish that the expenditure incurred was pertaining to non-employees of the appellant. It has further failed to establish that the expenditure incurred through employees of the appellant was for the business purposes without resulting any benefit to the employees. The arguments of the Ld.AR that the Writ Pettions are admitted by the Hon'ble Gujarat High Court allowing interim relief, are also found to be misleading because the case of appellant falls under Category-1 where the provisions of Fringe Benefit tax are clearly attracted. The Hon'ble High Court has granted interim relief only in respect of cases falling under Category 2 & 3. This decision of Hon'ble Gujarat High Court in special civil application No.21121 of 2005 was delivered on 18.10.2005 and hence the same was available to the appellant before the date of filing of return for the year under consideration. Despite there being such a clear cut legal position, the appellant chose not to disclose any value of Fringe Benefit in its return of income with a clear cut intentions to evade Fringe Benefit Tax. Accordingly, all the case laws relied upon by the appellant become inapplicable in the case of appellant. 4.2 In view of the above facts and circumstances of the case as also the legal position, thus I hold that the appellant has furnished inaccurate particulars of Fringe Benefit by not disclosing any value of Fringe Benefits in the return of income and hence rendered itself liable for penalty u/s 271(1)(d) of the Act. Accordingly, the penalty imposed by the AO at Rs.77,97,000/- is confirmed. Thus appellant fails in respect of all the grounds of appeals. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 20 29. Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us. 29.1 The ld. AR before us contended that the assessee has already disclosed the necessary details in the income tax return about the fringe benefit tax and therefore there cannot be any penalty on the assessee on account of furnishing the inaccurate particulars of fringe benefit. 29.2 On the other hand, the ld. DR vehemently supported the order of the authorities below. 30. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the assessee has declared the return for the fringe benefit tax at Rs. Nil even though there was clear direction of the Hon’ble Gujarat High Court in the own case of the assessee where the assessment order levying the fringe benefit tax was confirmed. Accordingly, we are of the view that the assessee has furnished the inaccurate particulars of income and therefore it is subject to the penalty under the provisions of section 271(1)(d) of the Act. Hence, we do not find any infirmity in the order of the learned CIT-A. Thus, the ground of appeal of the assessee is hereby dismissed. 31. In the result, the appeal of the assessee is hereby dismissed. Coming to ITA No. 561/Ahd/2014, an appeal by the assessee for A.Y. 2010-11 1.0The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming the additions of 26,41,88,950/- on account of Capital Grants & Subsidies and Consumers' Contribution on the ground that the appellant should transfer 15% of the total Grants/subsidies/consumer contribution received during the year as against 10% offered by the appellant. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 21 2.0 The learned Commissioner of Income Tax(Appeals) has erred in law and on facts in confirming the interest income from staff loans & advances amounting to 293,90,000/- as Income from Other Sources as against the Business Income and thereby disallowing the claim of set off of business losses of earlier years against the said income. 3.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in setting aside the matter of assessing the Income from Gain on Sale of Fixed Assets amounting to 18,54,000/- as Income from Other Sources as against the Business Income to Assessing officer and thereby allowing the claim of set off of business losses of earlier years against the said income. 4.0 The appellant craves leave to add to, alter, delete or modify any of the grounds of appeal either before or at the time of hearing of this appeal. 33. The first issue raised by the assessee is that the learned CIT(A) erred in confirming the action of the AO for recognizing income on government grant & subsidy @ 15% instead @ 10% as offered by it. 34. At the outset, we note that the issue raised by the assessee in the captioned ground of appeal for the AY 2010-11 is identical to the issue raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under consideration i.e. AY 2010-11. The ground of appeal of the assessee for A.Y. 2009-10 has been decided by us vide paragraph No. 7 of this order in favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2009-10 shall also be applied for the year under consideration i.e. AY 2010-11. Hence, the ground of appeal filed by the assessee is hereby allowed for statistical purposes. 35. The next issue raised by the assessee vide ground Nos. 2 & 3 are that the learned CIT(A) erred in holding the interest income from staff loans & advances as income from other sources as well erred in setting aside the issue of gain on sale of fixed assets to AO. 36. At the outset, we note that the issues raised by the assessee in the captioned ground of appeal for the AY 2010-11 are identical to the issue raised by ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 22 assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for the assessment year under consideration i.e. AY 2010-11. The appeal of the assessee for AY 2009-10 has been decided by us vide paragraph No. 17 of this order partly in favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2009-10 shall also be applied for the year under consideration i.e. AY 2010-11. Hence, the ground of appeal filed by the assessee is hereby partly allowed for statistical purposes. 37. In the result, appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA No. 680/Ahd/2014, an appeal by the Revenue for A.Y. 2010-11 38. The only issue raised by the Revenue is that the learned CIT(A) erred in holding the income from staff welfare activity and miscellaneous receipt as income from other business. 39. The necessary facts are that the assessee in the return of income filed for the year under consideration treated miscellaneous income as business receipt. However, the AO in the assessment order treated such income as income from other sources. 40. On appeal by the assessee, the learned CIT(A) held that the miscellaneous income included various types of receipts earned in normal course of business, therefore the same cannot be treated separate from the business receipt. 41. Being aggrieved by the order of the learned CIT(A), the revenue is in appeal before us. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 23 41.1 The learned DR before us reiterated the findings contained in the assessment order. 41.2 On the other hand, the learned AR submitted that the other income shown by the assessee has direct nexus with the activity of the assessee and therefore the same should be treated as income under the head business and profession. The learned AR likewise further contended that once corresponding expenses against the other income has been treated as the expenses under the head business and profession then the corresponding income should also be treated as par as income under the head business and profession. The learned AR vehemently supported the order of the learned CIT-A. 42. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset, we note that the issue on hand is interconnected with issue raised by the assessee in respect of treatment of interest income on loans to staff in ITA No. 561/AHD/2014 which we have set aside to the file of the AO for fresh adjudication vide paragraph number 36 of this order. Therefore, we hereby set aside the issue of treatment of miscellaneous income whether it is business income or income from other sources to the file of the AO fresh adjudication in accordance with the direction provided while adjudicating the issue of interest income in assessee’s appeal and as per the provision of law. Hence, the ground of appeal of the revenue is hereby allowed for statistical purposes. 43. In the result appeal filed by the revenue is hereby allowed for statistical purposes. Coming to ITA No. 3028/Ahd/2014, an appeal by the assessee for AY 2011-12 ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 24 44. The assessee has raised following grounds of appeal: 1.0 The learned Commissioner of Income Tax(Appeals) has erred in law and on facts in confirming the addition of 29,63,13,000/- on account of Capital Grant & Subsidies and Consumers' Contribution on the ground that the appellant should transfer 15% of the total Grant/subsidies/consumer contribution received during the year as against 10% offered by the appellant. 2.0 The learned Commissioner of Income Tax(Appeals) has erred in law and on facts in confirming the interest income from staff loans & advances amounting to 110,91,000/- as Income from Other Sources as against the Business Income and thereby disallowing the claim of set off of business losses of earlier years against the said income. 3.0 The learned Commissioner of Income Tax(Appeals) has erred in law and on facts in setting aside the matter of assessing the income from Gain on sale of fixed asset amounting to 257,32,431/- as income from other sources as against the Business Income to Assessing Officer and thereby allowing the claim of set off of Business losses of earlier years against the said income. 4.0 The appellant craves leave to add to, alter, delete or modify any of the grounds of appeal either before or at the time of hearing of this appeal. 45. The first issue raised by the assessee is that the learned CIT(A) erred in confirming the action of the AO for recognizing income on government grant & subsidy @ 15% instead @ 10% as offered by it. 46. At the outset, we note that the issue raised by the assessee in the captioned ground of appeal for the AY 2011-12 is identical to the issue raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under consideration i.e. AY 2011-12. The appeal of the assessee for AY 2009-10 has been decided by us vide paragraph No. 7 of this order in favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2009-10 shall also be applied for the year under consideration i.e. AY 2011-12. Hence, the ground of appeal filed by the assessee is hereby allowed for statistical purposes. 47. The next issue raised by the assessee vide ground Nos. 2 & 3 are that the learned CIT(A) erred in holding the interest income form staff loans & advances as ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 25 income from other sources as well erred setting aside the issue of gain on sale of fixed assets to AO. 48. At the outset, we note that the issue raised by the assessee in the captioned ground of appeal for the AY 2011-12 is identical to the issue raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under consideration i.e. AY 2011-12. The appeal of the assessee for AY 2009-10 has been decided by us vide paragraph No. 17 of this order partly in favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the AY 2009-10 shall also be applied for the year under consideration i.e. AY 2011-12. Hence, the ground of appeal filed by the assessee is hereby partly allowed for statistical purposes. 49. In the result appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA No. 3316/Ahd/2014 an appeal by the revenue for A.Y. 2011-12 50. The only issue raised by the Revenue is that the learned CIT(A) erred in holding the income from miscellaneous receipt as income from business. 51. At the outset, we note that the issue raised by the Revenue in the captioned ground of appeal for the AY 2011-12 is identical to the issue raised by Revenue in ITA No. 680/Ahd/2014 for AY 2010-11. Therefore, the findings given in ITA No. 680/Ahd/2014 shall also be applicable for the assessment year under consideration i.e. AY 2011-12. The appeal of the Revenue for A.Y. 2010-11 has been decided by us vide paragraph No. 42 of this order in favour of the Revenue for statistical purposes. The learned AR and the DR also agreed that whatever will ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 26 be the findings for the AY 2010-11 shall also be applied for the year under consideration i.e. AY 2011-12. Hence, the ground of appeal filed by the revenue is hereby allowed for statistical purposes. 52. In the result, the appeal filed by the Revenue is hereby allowed for statistical purposes. Coming to ITA No. 911/Ahd/2016 an appeal by the assessee for A.Y. 2012-13 53. The assessee has raised following grounds of appeal: 1.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the additions of Rs.40.75,10,800/- on account of Capital Grants & Subsidies and Consumers' Contribution on the ground that the appellant should transfer 15% of the total grants/subsidies/consumer contribution received during the year as against 10% offered by the appellant. 2.0 The learned Commissioner of Income Tax(Appeals) has erred in law and on facts in confirming the interest income from staff loans & advances amounting to 1,53,57,000/- as Income from Other Sources as against the Business Income and thereby disallowing the claim of set off of business losses of earlier years against the said income. 3.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the interest income from other amounting to 2,70,000/- as Income from Other Sources as against the Business Income and thereby disallowing the claim of set off of business losses of earlier years against the said income. 4.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in setting aside the matter of assessing the income from Gain on sale of fixed asset amounting to 16.82,000/- as income from other sources as against the Business Income to Assessing Officer and thereby allowing the claim of set off of Business losses of earlier years against the said income. 5.0 The appellant craves leave to add to, alter, delete or modify any of the grounds of appeal either before or at the time of hearing of this appeal. 54. The first issue raised by the assessee is that the learned CIT(A) erred in confirming the action of the AO for recognizing income on government grant & subsidy @ 15% instead @ 10% as offered by it. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 27 55. At the outset, we note that the issue raised by the assessee in the captioned ground of appeal for the AY 2012-13 is identical to the issue raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under consideration i.e. AY 2012-13. The appeal of the assessee for AY 2009-10 has been decided by us vide paragraph No. 7 of this order in favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the AY 2009-10 shall also be applied for the year under consideration i.e. AY 2012-13. Hence, the ground of appeal filed by the assessee is hereby allowed for statistical purposes. 56. The next issues raised by the assessee vide ground no. 2 & 4 of its appeal are that the learned CIT(A) erred in holding the interest income form staff loans & advances as income from other sources as well erred in setting aside the issue of gain on sale of fixed assets to AO. 57. At the outset, we note that the issues raised by the assessee in the captioned ground of appeal for the AY 2012-13 are identical to the issues raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under consideration i.e. AY 2012-13. The appeal of the assessee for A.Y. 2009-10 has been decided by us vide paragraph No. 17 of this order in partly favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2009-10 shall also be applied for the year under consideration i.e. AY 2012-13. Hence, the ground of appeal filed by the assessee is hereby partly allowed for statistical purposes. 58. The next issue raised by the assessee vide ground No. 3 of its appeal is that the learned CIT(A) erred in treating the interest income on balance of supplier/contractor/customer as income from other sources. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 28 59. The assessee has shown interest income for Rs. 2.7 Lakhs as business receipt. It was explained that impugned interest represents interest charged on advances or on the credit/debit balances of supplier or contractor. However, the AO disagreed with the explanation of the assessee and treated the impugned interest income as income from other sources. 60. On appeal by the assessee, the learned CIT(A) held that the assessee has not controverted the finding of the AO. Hence the learned CIT(A) confirmed the action of the AO. 61. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 61.1 The learned AR before us contended that the interest income is arising to the assessee in the course of the business and therefore the same should be treated as income under the head business and profession. 61.2 On the other hand, the learned DR vehemently supported the order of the authorities below. 62. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset, we note that the issue on hand is interconnected with the issue raised by the assessee in respect of treatment of interest income on loans to staff in immediate previous ground of appeal which we have set aside to file of the AO for fresh adjudication vide paragraph number 57 of this order. Therefore, we hereby set aside the issue of treatment of other interest income whether business income or income from other sources to the file of the AO fresh adjudication in accordance with the direction provided while adjudicating the issue of interest income on loan to staff and as per the provisions of law. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 29 Hence, the ground of appeal of the assessee is hereby allowed for statistical purposes. 63. In the result, appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA No. 1190/Ahd/2014, an appeal by the revenue for AY 2012-13 64. The only issue raised by the Revenue is that the learned CIT(A) erred in holding the income form miscellaneous receipt as income from business. 65. At the outset, we note that the issue raised by the Revenue in the captioned ground of appeal for the AY 2012-13 is identical to the issue raised by Revenue in ITA No. 680/Ahd/2014 for AY 2010-11. Therefore, the findings given in ITA No. 680/Ahd/2014 shall also be applicable for assessment year under consideration i.e. AY 2012-13. The appeal of the Revenue for A.Y. 2010-11 has been decided by us vide paragraph No. 42 of this order in favour of the Revenue for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2010-11 shall also be applied for the year under consideration i.e. AY 2012-13. Hence, the ground of appeal filed by the revenue is hereby allowed for statistical purposes. 66. In the result appeal filed by the Revenue is hereby allowed for statistical purposes. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 30 Coming to ITA No. 393/Ahd/2018 an appeal by the assessee for A.Y. 2013-14 67. The assessee raised the following grounds of appeal: 1.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the additions of Rs. 45,54,28,000/- an account of Capital Grants & Subsidies and Consumers' Contribution on the ground that the appellant should transfer 15% of the total Grants/subsidies/consumer contribution received during the year as against 10% offered by the appellant. 1.1 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has not given any findings whatsoever on the similar additions as above made under section 115JB of the IT Act. 2.0 The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming the additions with respect to the interest Income from staff loans & advances, fixed deposits and advances to others amounting to Rs. 1,81,70,000/- as Income from Other Sources as against the Business Income. 3.0 The learned Commissioner of Income Tax (Appeals) erred in law and facts has set aside the additions with respect to the Income from Gain on Sale of Fixed Assets amounting to Rs. 22,000/- with the direction to re-verify the claim in terms of the provisions of section 50 of the IT Act. 4.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has dismissed the ground relating to the initiation of penalty proceedings under section 271(1)(c) of the IT Act. 5.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the charging of interest under section 234B, 234C and 2340 of the Income Tax Act, 1961. 6.0 The appellant craves leave to add to, alter, delete or modify any of the grounds of appeal either before or at the time of hearing of this appeal. 68. The first issue raised by the assessee is that the learned CIT(A) erred in confirming the action of the AO for recognizing income on government grant & subsidy @ 15% instead @ 10 % as offered by it. 69. At the outset, we note that the issue raised by the assessee in the captioned ground of appeal for the AY 2013-14 is identical to the issue raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 31 consideration i.e. AY 2013-14. The appeal of the assessee for A.Y. 2009-10 has been decided by us vide paragraph No. 7 of this order in favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2009-10 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the ground of appeal filed by the assessee is hereby allowed for statistical purposes. 69.1 Besides the above, the assessee also filed an appeal against the addition made by the AO in the book profit computed under section 115JB of the Act by the amount of addition made on account of grants or subsidies. Since, the issue arises from the treatment of grants or subsidies which we have set aside to the file of the AO for de novo adjudication, we hereby set aside the issue of addition of book profit to the file of the AO for fresh adjudication accordingly. Hence the ground of appeal raised by the assessee is allowed for statistical purposes. 70. The next issue raised by the assessee vide ground Nos. 2 & 3 of its appeal is that the learned CIT(A) erred in holding the interest income form staff loans & advances as income from other sources as well erred in setting aside the issue of gain on sale of fixed assets to AO. 71. At the outset, we note that the issue raised by the assessee in the captioned ground of appeal for the AY 2013-14 is identical to the issue raised by assessee in ITA No. 2080/Ahd/2012 for AY 2009-10. Therefore, the findings given in ITA No. 2080/Ahd/2012 shall also be applicable for assessment year under consideration i.e. AY 2013-14. The appeal of the assessee for A.Y. 2009-10 has been decided by us vide paragraph No. 17 of this order in partly favour of the assessee for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2009-10 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the ground of appeal filed by the assessee is hereby partly allowed for statistical purposes. ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 32 71. The next issue raised by the assessee vide ground Nos. 4 to 6 of its appeal is either premature, consequential, or general in nature and not requiring separate adjudication. Hence the same is hereby dismissed as infructuous. 72. In the result the appeal of the assessee is hereby partly allowed for statistical purposes. Coming to ITA 449/Ahd/2018 an appeal by the revenue for A.Y. 2013-14 73. The only issue raised by the assessee is that the learned CIT(A) erred in holding the income from miscellaneous receipt as income from business. 74. At the outset, we note that the issue raised by the Revenue in the captioned ground of appeal for the AY 2013-14 is identical to the issue raised by Revenue in ITA No. 686/Ahd/2014 for AY 2010-11. Therefore, the findings given in ITA No. 686/Ahd/2014 shall also be applicable for assessment year under consideration i.e. AY 2013-14. The appeal of the Revenue for A.Y. 2010-11 has been decided by us vide paragraph No. 42 of this order in favour of the Revenue for statistical purposes. The learned AR and the DR also agreed that whatever will be the findings for the A.Y. 2010-11 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the grounds of appeal filed by the revenue is hereby allowed for statistical purposes. 75. In the result appeal filed by the Revenue is hereby allowed for statistical purposes. 76. In the combined results: ITA no.2080/AHD/2012 with 10 others A.Y. 2009-10 33 Sr.N o. ITA No. Asstt. Year Name of Appellant Name of Respondent 1. No.2080/Ahd/2012 2009-10 Assessee Partly allowed for the statistical purposes 2. No.1999/Ahd/2012 2009-10 Revenue Dismissed 3. No.3500/Ahd/2015 2009-10 Assessee Dismissed 4. No.561/Ahd/2014 2010-11 Assessee Partly allowed for the statistical purposes 5. No.680/Ahd/2014 2010-11 Revenue Allowed for the statistical purposes 6. No.3028/Ahd/2014 2011-12 Assessee Partly allowed for the statistical purposes 7. No.3316/Ahd/2014 2011-12 Revenue Allowed for the statistical purposes 8. No.911/Ahd/2016 2012-13 Assessee Partly allowed for the statistical purposes 9. No.1190/Ahd/2016 2012-13 Revenue Allowed for the statistical purposes 10. No.393/Ahd/2018 2013-14 Assessee Partly allowed for the statistical purposes 11. No.449/Ahd/2018 2013-14 Revenue Allowed for the statistical purposes Order pronounced in the Court on 18/08/2023 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 18/08/2023 Manish आदेश क त ल प े षत/Copy of the Order forwarded to : आदेशान ु सार/BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A) 5. !वभागीय $त$न ध, आयकर अपील य अ धकरण / DR, ITAT, 6. गाड& फाईल / Guard file.