The DCIT, Circle-1(1)(1), Vadodara V. Dakshin Gujarat Vij Company Ltd., Vadodara

ITA 3163/AHD/2015

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4578 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 05-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Opportunity of being heard; Initiation of penalty proceedings; Bad and doubtful debts; Revenue expenditure; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 14A; 115JB; 73; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER& Ms. MADHUMITA ROY, JUDICIAL MEMBER I .T .A . N o . 28 58 /A h d /2 01 5 ( A s s e s s me nt Y ea r s : 2 0 10 -1 1) Da ks hin G u j ar at V i j C o. L td . SA rd ar Pa te l V i d yu t B ha va n , R ac e C o ur s e C i r c le , V ad oda r a-3 9 0 00 7 Vs . D C I T C ir c l e- 1( 1) , B a r od a [ P AN N o. A A B CD 89 12 C ] (Appellant) .. (Respondent) I.T . A. N o. 2 78 9/ A h d/ 20 15 ( A s se ss m e nt Y e a r : 20 10- 1 1 ) DC I T C ir c l e- 1 ( 1 )( 1 ) , Va do dar a Vs . D a ks hin G uj a r at V i j C o mp a n y Lt d., S a r da r P at e l V i d yu t B h a v a n , R a c e C o ur se C ir c l e, V ad oda r a - 3 9 0 00 7 [ P AN N o. A A B CD 89 12 C ] (Appellant) .. (Respondent) I .T .A . N o . 31 22 /A h d /2 01 5 ( A s se ss m e nt Y e a r : 20 11- 1 2 ) Da ks hin G u j ar at V i j C o. L td ., Sar d a r Pa tel V id yu t B hav an , R a c e C o ur s e C i r c le , B ar o d a- 39 00 0 7 Vs . D C I T C ir c l e- 1( 1) , V a do d ar a [ P AN N o. A A B CD 89 12 C ] (Appellant) .. (Respondent) I .T .A . N o . 6 1 8/ A h d /2 0 1 8 ( A s se ss m e nt Y e a r : 20 11- 1 2 ) AC I T C ir c l e- 1 ( 1 )( 1 ) , Va do dar a Vs . D a ks hin G uj a r at V i j C o mp a n y Lt d., S a r dar P at el V i d yu t B h a v a n , R a c e C o ur se C ir c l e, V ad oda r a-3 9 0 00 7 [P AN N o. A A B CD 89 12 C] (Appellant) .. (Respondent) ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 2 - I .T .A . N o . 31 23 /A h d /2 01 5 ( A s se ss m e nt Y e a r : 20 12- 13 ) Da ks hin G u j ar at V i j C o. L td ., Sar d a r Pa tel V id yu t B hav an , R a c e C o ur s e C i r c le , B ar o d a-39 00 0 7 Vs . D C I T C ir c l e- 1( 1) ( 1) , V a do d ar a [ P AN N o. A A B CD 89 12 C ] (Appellant) .. (Respondent) I .T .A . N o . 31 63 /A h d /2 01 5 ( A s se ss m e nt Y e a r : 20 12- 13 ) DC I T C ir c l e- 1 ( 1 )( 1 ) , Va do dar a Vs . D a ks hin G uj a r at V i j C o mp a n y Lt d., S a r da r P at e l V i d yu t B h a v a n , R a c e C o ur se C ir c l e, V ad oda r a - 3 9 0 00 7 [ P AN N o. A A B CD 89 12 C ] (Appellant) .. (Respondent) Appellant by : Shri M. K. Patel, Advocate Respondent by : Shri A. P. Singh, CIT DR D a t e of H ea r i ng 29.06.2022 D a t e of P r o no u n ce me nt 22.07.2022 O R D E R PER MADHUMITA ROY, JM: The bunch of appeals preferred by the assessee and the Revenue are directed against the separate orders dated 17.07.2015, 21.08.2015 passed by the Ld. CIT(Appeals)-1, Vadodara arising out of the orders passed by the DCIT, Circle-1(1) & Circle-1(1)(1), Baroda dated 13.02.2013 & 27.02.2014 under Section 143(3) & 143(3) r.w.s 147 of the Income Tax Act, 1961(hereinafter referred to as “the Act”) for A.Ys. 2010-11, 2011-12 & 2012- 13 respectively. Since issues involved in these appeals are identical, these are heard analogously and are being disposed of by a common order for the sake of convenience. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 3 - ITA No. 2858/Ahd/2015 is taken as a lead case. 2. The Grounds of appeal raised by the assessee are as under: “1.0 The learned Commissioner of Income Tax (Appeals) has confirmed the disallowance of deferred revenue expenditure amounting to Rs.41,16,000/- written off during the year without considering the facts in right spirit. 2.0 The learned Commissioner of Income Tax (Appeals) has confirmed the disallowance of Miscellaneous losses and write offs amounting to Rs.3,81,36,000/- on the ground that the claim has not been substantiated by any documentary evidences. 3.0 The learned Commissioner of Income Tax (Appeals) has confirmed the addition of Rs.,28,75,12,000/- made 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. 4.0 The learned Commissioner of Income Tax (Appeals) has confirmed the additions of the income shown under the head “Other Income” in the Profit & loss Account amounting to Rs.19,08,000/- as Income from Other Sources without considering the nature of each item included under this head and thereby disallowing the claim of set off of business losses of earlier years against the said income. 5.0 The learned Commissioner of Income Tax (Appeals) has confirmed the disallowance of prior period expenses amounting to Rs.1,49,95,000/- without appreciating the fact that such expenditure crystallized during the year and that the same has never been claimed in earlier years. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the appellant had offered net prior expenses after considering the prior period income for tax during the year. 6.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has dismissed the ground relating to initiation of penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 for the alleged concealment and/or furnishing of inaccurate particulars of income. 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.” ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 4 - 3. Ground No.1:- This ground relates to disallowance of deferred revenue expenses. 4. It is found from the documents that the assessee has written off Rs. 41.16 lakhs as deferred revenue expenditure during the year under consideration but the same has not been added back to the total income. In order to justify such claim the assessee submitted that such expenses has been written off during the Financial Year 2009-10 i.e. A.Y. 2010-11 and the same is the 20% amount of preliminary and preoperative expenses incurred by the company up to the Financial Year 2004-05 the details whereof is appearing at Page 4 of the Assessment Order. On the basis of the concept of deferment of revenue expenditure under the Act, the said has been disallowed by the Ld. AO which was further been confirmed by the First Appellate Authority. 5. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 6. As it appears that the Ld. CIT(A) has decided the issue against the assessee relying upon the order passed by his predecessor in the case of the assessee for A.Y. 2008-09. Considering the rule of consistency and the observation made by the Revenue in that year we do not find any reason to interfere in the order impugned before us in the absence of any changed circumstances. Hence, the said ground of appeal filed by the assessee is found to be devoid of any merit and thus, dismissed. 7. Ground No.2:- The next ground relates to disallowance of miscellaneous losses and write off amounting to Rs. 3,81,36,000/- on the ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 5 - ground that the claim has not been substantiated by any documentary evidences. 8. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 9. The Ld. AO decided the issue against the assessee in the absence of any documentary evidences. Before the Ld. CIT(A) the assessee submitted the break-up of expenditure as under: Miscellaneous Expenses written off Amount (Rs.) Bad Debts Written off- Due from Consumer 12030512.20 Shortage on physical verification of MAT Stock 4184022.59 Loss of Material by Pilferage etc. 360913.74 Loss or cash written off 149594.00 Waiver of delayed payment charges (DPC) 782716.76 Waiver of Charges on Govt. Dues 10740170.20 Comp. for Inju., Death, Damages-Outsiders 6893636.00 Loss on obsolescence of Fixed Asset 2885868.29 Loss on sale of scrap 104191.24 Other losses and written off 3900.00 Total 38135525.00 The assessee further submitted the following: “1.1 It is submitted that all the above expenses are of revenue expenses in nature and hence should not be added to income. Out of the total Misc. losses & write offs of Rs. 381.36 lakhs, Rs.263.63 lakhs are waiver of consumer dues consisting of principal and delay payment charges leviable from consumers. The said amount has already been booked as income in earlier years. Since the provision for Bad & doubtful debts being made by the company in respective years (say, Rs.3700 lakh in F Y 2010-11 & Rs.6253 lakhs in F Y 2009-10) are disallowed while filing of return of income of respective assessment year, hence, the actual expenditure booked during the year for waiver of consumer dues during the year of Rs.263.63 lakhs (principal amount of Rs.60lakhs + delay payment charges Rs.203lakhs) should not be added back to income. Further the amount of Rs.44 lakhs expenditure booked towards compensation paid to the outsiders for injury, death/damage due to fatal / non-fatal incidents/accidents occurred during the year. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 6 - This apart the loss on account of shortage in material etc., it is submitted that these losses are on account of loss of materials through pilferage, shortage of material in transit, shortage arising on physical verification, obsolescence of materials/stores, loss in sale of scrap etc. It is, therefore, submitted that the losses have been incurred in the day to day business activities and is purely of revenue nature. 1.2 In view of the facts and circumstances, the appellant prays that the additions may be deleted.” 10. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the issue is duly covered by assessee’s own case for A.Y. 2008-09 by the Coordinate Bench in ITA No. 3111/2011which has been perused by us and since the facts are identical we find substances in assessee’s submissions which has not been able to be controverted by the Ld. D.R. too. Hence, this ground of appeal is allowed in assessee’s favour by deleting the addition made by the Revenue. 11. Ground No.3 :- Confirming addition of 15% of Capital Grants as against 10% offered by assessee is under challenged before us. 12. During the course of assessment proceeding upon verification of the balance sheet it was found that the opening balance of capital grant in the reserve and surplus shown at Rs. 40923.36 lakhs and closing balance thereof was shown as Rs. 51,752.22 lakhs for the year under consideration. The Ld. AO was of the view that in the event that grant is in the nature of capital it should have been deducted from the capital fix assets or otherwise if it is revenue in nature then it has to be revenue income in the hands of the assessee. The assessee was asked to explain the nature of grant and treatment to the account for the said grant whereupon the assessee submitted the following: “As per the Accounting Policy followed by the DGVCL, the consumers' contribution and capital grants received towards cost of Capital Assets are not reduced from the cost of assets. All the receipts of Consumers' contribution & Capital Grants received from 01.04.2005 are created as Deferred credit and 10% of the year end balance is transferred to profit and loss Account. The consumers' ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 7 - contribution & Capital grants received towards cost of capital Assets is treated as a deferred credit and written back at 10% of the year end balance. Since the cost of Fixed Assets is not being reduced by the consumers' contribution & Capital grants amount, the same is shown separately under the Head- Reserves & Surplus and as per the Accounting followed, 10% is transferred to profit & loss account every year. As such, the above referred receipt of consumers' contribution & Capital Grants in nature and hence cannot be considered as Income. The consumers' contribution & Grants are towards cost of Capital Assets and Capital in nature and hence the same cannot be considered as Revenue Income. The above referred capital receipt is one of the sources of financing capital expenditure and hence the same can not be treated as Revenue Income. The receipts of consumers' contribution & Grants towards cost of capital Asset for specific schemes/projects are capital in nature and hence the same can not be considered as Revenue Income. The consumers' contribution and capital grants are one of the sources of financing capital expenditure and is a capita receipt and hence the same can not be treated as Revenue Income. It is submitted that the Grants allocated to the company are certainly for various schemes to be implemented by the company. Such grants are accounted based on the decision on the holding company viz. GUVNL, which is ultimately controlled guided by the Government of Gujarat.” Relying upon the ratio set in the earlier Assessment Year the Ld. AO computed 15% out of the total grant in the year end balance of Rs. 57502.47 lakhs and worked out to Rs. 8625.37 lakhs, which according to him, to be transferred to the total income of the assessee. Since the assessee has already transferred an amount of Rs. 5750.25 lakhs, therefore, the remaining amount of Rs. 2875.12 has been disallowed and added to the total income of the assessee which was, in turn, confirmed by the First Appellate Authority. Hence, the instant appeal before us. 13. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the Coordinate Bench in the identical ground in the matter of Gujarat Energy Transmission Corpn. Ltd., Baroda in ITA No. 652/Ahd/2013 for A.Y. 2009-10 set-aside the issue to the file of the ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 8 - Ld. AO for re-adjudication of the same and to pass order upon verification of the proportionate amount of grant relating to different assets and to pass orders. On this aspect, he has drawn our attention to Page 56 of the Paper Book filed before us wherein the order cited above passed by the Coordinate Bench has been annexed. 14. On the other hand, the Ld. DR further has relied upon the order passed by the authorities below. 15. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 16. We find that on the identical issue as submitted by the Ld. A.R. in ITA No. 652/Ahd/2013 for A.Y. 2009-10 the Coordinate Bench has been pleased to set-aside the issue to the file of the Ld. AO for adjudication afresh for verifying the proportionate amount of grant relevant to different asset. The relevant observation of the Coordinate Bench is as follows: “13. The Learned AO finalized the issue by making an addition of Rs.24,17,88,400/- which was, in turn, confirmed by the Learned CIT(A) and added to the total income of the assessee. While confirming the addition, the Learned CIT(A) observed as follows: “6.3 I have considered the submissions. It has been accepted by the appellant that the grants were for capital purpose and for capital projects specified by the Government. In Schedule-3 of the printed balance sheet as on 31.3.2009, it is clearly mentioned that grants were towards cost of capital assets. Appellant's contention that the grants were not actually for meeting cost of assets is therefore not at all tenable. After insertion of Explanation 10 below section 43(1) by the Finance (No.2) Act, 1998 w.e.f. 1.4.1999, decisions relied upon by the appellant in the case of P. 3. Chemicals etc. are no longer applicable and cost of assets met directly or indirectly by the Central Government or State Government in the form of subsidy or grant or reimbursement (by whatever name called) is not to be included in the "actual cost of asset" to the assessee. Accordingly, depreciation is to be allowed only after making necessary adjustment in "written down value"/"actual cost" of block of assets in accordance with Explanation 10 below section 43(1). In the case of Dakshin Gujarat Vij Co. Ltd. for A.Y.2006-07 referred to by the ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 9 - Assessing Officer, CIT(A) distinguished the treatment to be meted out to revenue grants and capital grants and held that revenue grants are to be taxed in entirety in the year of receipt and capital grant towards assets are to be reduced from "actual cost" of assets as per Explanation 10 below section 43(1). In the case of Dakshin Gujarat Vij Co. Ltd., after noting that grants were only towards cost of capital assets, CIT(A) had held that such grants ought to have been reduced from the cost of capital assets and by not doing so, extra depreciation @ 15% of grants had been claimed. Since 10% of the grants had already been offered as income by the assessee, in the decision in the case of Dakshin Gujarat Vij Co. Ltd., CIT(A) had directed addition to be made after reducing income already offered from 15% of the grants. The AO has made addition in the present case as per this appellate order. Hence following the same, the addition made by the AO is upheld and this ground of appeal is dismissed.” However, at the vary onset of the proceeding, the Learned AR has taken us to the order passed by the Co-ordinate Bench in ITA No.704/Ahd/2012 for A.Y. 2008-09 in assessee’s own case where we find that the issue has been set aside to the file of the Learned AO for adjudication afresh after verifying proportionate amount of grant relating to different asset. The Learned AR prayed for similar relief. The argument advanced by the Learned AR has been failed to be contradicted by the Learned DR. We find following observation was made by the Hon’ble Co-ordinate Bench while granting relief to the assessee: “15. The ground no.3 of the appeal of the assessee is directed against the order of the CIT(A) in confirming the action of the AO in transferring 15% of the capital grants as income although the disallowance made under this head has been restricted to Rs.18,93,11,850/- as against the disallowance of Rs.30,97,61,800/- made by the AO. 16. The brief facts of the case are that on verification of subsidies and grants, the AO observed that the assessee has shown deferred government grants, subsidies, contribution at Rs.7305.70 lakhs as on 1.4.2007 and the assessee had shown Rs.15941.67 lakhs at the end of the year i.e. as on 31.3.2008. On show cause by the AO to explain the treatment in accounts of the subsidy, grants the assessee stated that during the year capital grant received from Government of Gujarat and other. The assessee submitted that in order to improve various functions associated with the generation, transmission and distribution of electricity, and also because the PSUs connected with power section were making consistent losses, the Government decided to introduce reforms in the direction of State PSUs. Accordingly, under the provision of Gujarat Electricity Industrial (Reorgnisation & Regulation) Act, 2000, the erstwhile GEB was split into seven companies, for the purpose of financial restructuring plan, and the approval was accorded to provide some financial/capital support to GUVNL. The grant was given in terms of the power reforms for the overall development of the power sector. Such grant was not granted to actually meet the cost of assets. Further, the grant was given to the holding company, GUVNL and then it was allocated ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 10 - to the assessee company, one of the subsidiary companies. The assessee was not entitled to an amount beyond a certain limit, even if it is spent large amount on purchase of fixed assets. Further, the grant was not with reference to any particular fixed assets. It was further submitted that the resolution sanctioning the grant no where indicated that the grant was meant to offset the cost of the capital assets purchased by the company. Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT Vs. P.J. Chemicals Ltd., 121 CTR 201, wherein the decision of the Gujarat High Court in the case of CIT Grace Paper Industries P. Ltd., 83 CTR 1, which was affirmed by the Hon’ble Supreme Court by observing that the amount of subsidies and grants received by the assessee cannot be reduced from the cost of assets. It was further submitted that the subsidy received under scheme cannot be reduced from the actual cost of the assets by applying the provisions of section 43(1) of the Income Tax Act. The AO did not accept the submission of the assessee and held that the submission of the assessee that the grant was not capital in nature, is factually incorrect, and from the resolution, it was clear that the grant received from the State Government was in the nature of capital grant and it should have been reduced from the capital assets. The decisions quoted by the assessee are not applicable after insertion of Explanation 10 of section 43(1) of the Act, as they pertained to earlier years prior to insertion of Explanation 10 of section 43(1) of the Act. After insertion of Explanation 10 of section 43(1) of the Act, the position of law was very clear. Since the assessee failed to reduce the capital grant against the cost of capital assets, and claimed excess depreciation, which was disallowed and worked out at 15% of the capital assets. 17. On appeal, the CIT(A) held that in assessee’s case, 10% of grant under three heads namely “Subsidy towards cost of capital assets”, “Grants towards cost of capital assets” and “Consumer contribution for capital assets” i.e. the grants appearing in Schedule -3 of the balance sheet as on 31.3.2008 were offered for tax. The amount of grant on which 10% was calculated was on the opening balance of grants of Rs.73,05,70,492/-, and the grants received during the year was Rs.103,56,34,226/-, aggregating to Rs.176,62,04,718/-. As these grants were towards cost of capital assets, 15% of the same should have been reduced from the depreciation claimed on account of making adjustment in the ‘actual cost’ of assts as per Explanation 10 below section 43(1). Since the assessee has already offered for tax, 10% of the opening balance of grants plus grants received during the year under these three heads of Schedule-3 grants, such amount offered for tax was to be reduced from the excess depreciation to be disallowed at the rate of 15% of Rs.176,62,04,718/- i.e. Rs.26,49,30,708/-. The net disallowance on this count worked out Rs.26,49,30,708/- minus Rs.17,20,37,655/-, the amount already offered for taxation i.e. Rs.9,28,93,053/-. Since no portion of grant of Rs.6427.94 lakhs being capital grant for capital support appearing in Schedule-2 of the balance sheet as on 31.3.2008 was offered as income nor it was reduced from the cost of assets, 15% of the same i.e. Rs.964.191 lakh needed to be disallowed as excess depreciation claimed in respect of the ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 11 - same. The total disallowance towards excess depreciation, therefore, worked out to Rs.9.289 crores plus Rs.9.641 crores i.e. Rs.18.93 crores. Thus, instead of net addition of Rs.30,97,61,800/- made by the AO, addition of Rs.18.93 crore was directed to be made on this count. 18. Before us, the AR of the assessee argued that uniform rate of 15% cannot be applied for making disallowance. He submitted that the grant should be apportioned according to the value of the asset given in the balance sheet. He argued that the rate of depreciation on land was zero percent, building was 5% and the plant & machinery was 15%, and hence, the disallowance at the uniform rate at 15% is not justified. 19. On the other hand, the DR argued and submitted that the order of the CIT(A) was correct, and he after appreciating the entire facts had reduced the disallowance from Rs.30.97 crores to Rs.18.93 crores. 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. Hence, in the absence of any changed circumstances as it appears from the records, we find no other alternative but to remit the issue to the file of the Learned AO for re- adjudication of the same and to pass order upon verification of the proportionate amount of grant relating to different assets and upon applying the actual date of depreciation relates to those assets. Hence, this ground of appeal preferred by the assessee is allowed for statistical purposes.” Relying upon the observation and the decision taken by the Coordinate Bench we find it fit and proper to remand the issue to the file of the Ld. AO for re-adjudication of the same and to pass orders upon verification of the ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 12 - proportionate amount of grant relating to different assets and to pass orders accordingly. This ground of appeal preferred by the assessee is allowed for statistical purposes. 17. Ground No.4:- Confirming income as “other income” instead of business income interest on loans to staff to the tune of Rs. 19,08,000/- has been challenged before us by the assessee. 18. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee with all his fairness submitted before us that the identical issue has been decided against the assessee by the Coordinate Bench in the case of Gujarat Transmission Corn. in ITA No. 652/Ahd/2013 for A.Y. 2009-10. On this aspect he has drawn our attention to Page 63 of the Paper Book filed before us. However, by and under the order passed by the Hon’ble Orissa High Court in the case of Odisha Power Generation Corporation Ltd. vs. ACIT, Circle-2(2), Bhubaneswar & ors. in ITA Nos. 1, 2, 3 of 2015 and ITA Nos. 24 & 25 of 2009 the issue has been decided otherwise. A copy of the same has also been submitted before us by the Ld. Counsel appearing for the assessee. 19. On the other hand, the Ld. D.R. relied upon the order passed by the authorities below. 20. 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 ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 13 - 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.” 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. 21. Ground No.5:- Disallowance of prior period expenses of Rs. 1,49,95,000/- is under challenged before us. 22. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the Coordinate Bench in ITA No. 996/Ahd/2011 for A.Y. 1998-99 has set-aside the identical issue to the file of the Ld. AO. On this aspect he has drawn our attention to Page 3 of the Paper Book filed before us. 23. We have heard the rival submissions made by the respective parties, and we have perused the relevant materials available on record. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 14 - 24. We find that Coordinate Bench on the identical issue disposed of the ground by remitting the same to the file of the Ld. AO to adjudicate de novo with the following observation: “6. We have carefully heard the rival submissions and perused the orders of the authorities as well the case-laws referred. The assessee is aggrieved by the disallowance of prior period expenses of Rs.53.53crores as per Ground No.4 of its appeal. The disallowance has been made on the ground that the expenses under various heads as noted in the assessment order pertained to earlier years and the assessee which is following system of accounting should have made provision for expenses in those respective years and claimed them as deduction. We have gone through the break-up of the expenses as noted in para-8 of the assessment order and observe that certain expenses declared under the head 'other adjustments Rs.30.75 crores'; 'other charges Rs.79.34 lakhs'; 'depreciation under provided Rs.7.86 crores' etc. are ostensibly vague and does not/indicate the nature of claim with sufficient particularity obscure. We simultaneously note that assessee is a Slate Government Undertaking and its accounts are subjected to review by CAG and therefore it cannot be postulated that there was any deliberateness in not furnishing relevant, details before the revenue authorities. The bonafides of the Assessee is also augmented by the facts that the Assessee has reported staggering carry forward losses in its returned income. Thus, there is no immediate tax advantage accrued to the assessee by the claim of impugned prior period expenses per se. We therefore deem it expedient to restore the issue back to the file of AO for examining the issue de novo after verifying facts as may be considered necessary and expedient in accordance with law. The AO shall bear in mind the ratio laid down by the Hon'ble Gujarat High Court in the case of Adani Enterprises Ltd. (supra) while adjudicating the issue. Needless to say, reasonable opportunity shall be provided to the assessee while adjudicating the issue. Hence, all the contentions of the assessee are kept open. The issue raised as per Ground No.4 is thus set aside to the file of AO in terms of directions noted above. As a result, Ground No.4 is allowed for statistical purposes.” 25. Respectfully relying upon the order perused by the Coordinate Bench we are disposing of the ground by setting aside the issue to the file of the Ld. AO for de novo adjudication upon giving an opportunity of being heard to the assessee and upon considering the evidence which the assessee may choose to file at the time of hearing of the matter. This ground is allowed for statistical purposes. 26. Ground Nos. 6 & 7 has not pressed by the assessee. Hence, both the grounds raised by the assessee are dismissed as not pressed. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 15 - ITA No. 3122/Ahd/2015(A.Y. 2011-2):- 27. Ground No.1:- Identical ground has already been decided by us in ITA No. 2858/Ahd/2015 for A.Y. 2010-11 as Ground No. 3 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 28. Ground No.2:- Identical ground has already been decided by us in ITA No. 2858/Ahd/2015 for A.Y. 2010-11 as Ground No. 4 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 29. Ground No.3:- Identical ground has already been decided by us in ITA No. 2858/Ahd/2015 for A.Y. 2010-11 as Ground No. 5 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 30. Ground Nos. 4 & 6 has not pressed by the assessee. Hence, both the grounds raised by the assessee are dismissed as not pressed. 31. Ground No.5:- This ground is consequential in nature and no separate order needs to be passed. ITA No. 3123/Ahd/2015(A.Y. 2012-13):- 32. Ground No.1:- Identical ground has already been decided by us in ITA No. 2858/Ahd/2015 for A.Y. 2010-11 as Ground No. 3 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 16 - 33. Ground No.2:- Identical ground has already been decided by us in ITA No. 2858/Ahd/2015 for A.Y. 2010-11 as Ground No. 4 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 34. Ground No.3:- Identical ground has already been decided by us in ITA No. 2858/Ahd/2015 for A.Y. 2010-11as Ground No. 5 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 35. Ground No.4:- During the course of assessment proceeding the assessee was directed to submit computation of brought forward business and depreciation loss. The assessee submitted the following revised calculation of brought forward business and depreciation loss which is reproduced as under: SR. NO A.Y. Nature of Loss/Allowance Amount as returned (in Rupees) Amount as Assessed (in Rupees) Remarks 1 2005-06 Less Business Loss Set Off A.Y. 2006-07 3,606,995,913 303,628,026 3,606,995,913 374,346,830 As per CIT(A) order dtd. 30.11.2010 Less Set Off A.Y. 2007-08 3,928,714,801 92,158,939 3,912,482,547 92,158,939 No asst. u/s. 143(3) Less Set Off A.Y. 2008-09 3,211,208,948 0 3,140,490,144 118,093,752 As per order u/s 147 dtd. 22-01-2013 Less Set Off A.Y. 2009-10 3,211,208,9480 3,022,396,392 0 No asst. u/s. 143(3) Less Set off A.Y. 2010-11 3,211,208,948 942,004,427 3,022,396,392 1,297,639,427 As per Order u/s. 143(3) dtd. 27-2- 2014 Less Set off A.Y. 2011-12 2,269,204,521 888,827,235 1,842,850,717 1,291,051,235 As per Order u/s. 143(3) dtd. 27-2- 2014 TOTAL U/A BUSINESS LOSS 1,380,377,286 551,799,483 2 2005-06 2008-09 Unabsorbed Depreciation Unabsorbed Depreciation 2,87,302,960 391,438,190 2,875,302,960 0 As per Order u/s 147 dtd. 22-01-2013 2009-10 Unabsorbed Depreciation 3,266,741,150 27,686,857 2,875,302,960 27,686,857 No asst. u/s. 143(1) ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 17 - Less Set Off A.Y. 2010-11 3,239,054,293 0 2,847,616,103 1,908,000 As per Order u/s. 143(3) dtd. 13-02- 2013 Less Set off A.Y. 2011-12 3,239,054,293 0 2,845,708,103 2,420,000 As per Order u/s. 143(3) dtd. 27-2- 2014 TOTAL U/A DEPRECIATION 3,239,054,293 2,842,288,103 36. According to the Ld. AO such claimed made by the assessee is higher business loss as compared to the business loss ascertained during the earlier assessment and therefore, the business loss claimed by the assessee has been restricted to 55,17,99,482/-. Though, the same was challenged before the First Appellate Authority by the assessee no deliberation has been made by the Ld. CIT(A). In that view of the matter the Ld. Counsel submitted before us for remitting the issue to the file of the Ld. AO to decide the same in terms of the giving effect to the appellate orders of the earlier years. 37. On the other hand, the Ld. DR relies upon the order passed by the authorities below. 38. We find that the Ld. CIT(A) has not decided the issue of carry forward loss and depreciation of earlier years, hence we find it fit and proper to remit to the issue to the file of the Ld. AO to decide the same on the basis of the giving effect of appellate orders in respect of the earlier years of the assessee. This ground of appeal raised by the assessee is allowed for statistical purposes. ITA No. 2789/Ahd/2015(A.Y. 2010-11)(Revenue’s Appeal):- 39. Ground No.1:- Deletion of guarantee fees paid to the Government of Gujarat to the amount of Rs. 1,00,26,006/- is the subject matter before us. 40. The Ld. DR relied upon the order passed by the authorities below. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 18 - 41. On the other hand, the Ld. Counsel appearing for the assessee submitted before us that in the issue is covered in favour of the assessee in the following matters: (i) Gujarat Urja Vikas Nigam – in ITA No. 3358/2015 (ii) Gujarat Energy Transmission Corpn. – ITA No. 633/2013 (iii) Gujarat Urja Vikas Nigam – ITA No. 899/2012 It was further submitted by the assessee that the issue is also covered by the judgment passed by the Coordinate Bench on assessee’s own case. On this aspect he has drawn our attention to the observation made by the Coordinate Bench. 42. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 43. We have carefully considered the judgment passed by the Coordinate Bench in ITA No. 2788/Ahd/2015 for A.Y. 2008-09. While deciding the ground in favour of the assessee by upholding the order passed by the Ld. CIT(A) in the appeal preferred by the Revenue in ITA No. 2788/Ahd/2015 for A.Y. 2008-09 in assessee’s own case the Coordinate Bench has been pleased to observe as follows: “3. The ground of appeal raised by the Revenue reads as under:- “1. On the facts and in the circumstances of the case and in law, the Ld.CIT(Appeals) erred in deleting the addition of Rs.151.81 lakhs made on account of disallowance of claim of guarantee fees paid to Government of Gujarat. The disallowance was made by disallowing the claim as revenue expenditure as it is of enduring nature in the assessee’s business and hence capital in nature.” ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 19 - 4. When the matter was called for hearing, the learned counsel for the assessee pointed out that identical issue towards disallowance of guarantee fees paid to Government of Gujarat was reversed in the appellate proceedings in the other case, namely, DCIT vs. Gujarat Energy Transmission Corporation Ltd. ITA No. 633/Ahd/2013 concerning A.Y. 2009-10 order dated 05.09.2019. The learned counsel for the assessee accordingly submitted that the issue is squarely covered in favour of the assessee in identical fact situation, the order of the CIT(A) on the issue cannot be faulted. 5. The ld. Departmental Representative for the Revenue, on the other hand, placed reliance upon the order of the AO without any specific rebuttal. 6. We have carefully considered the rival submissions and also perused the orders of the AO and CIT(A). 6.1 The CIT(A) has disposed off the issue in favour of the assessee as under: “5.1.4. I have considered the appellant's submission and the AO's observations. The guarantee fee paid by the appellant to the GOG is for the purposes of obtaining loan. Similar issue in the case of sister concern of the appellant namely M/s. Gujarat Energy Transmission Corporation Ltd. has been decided by my predecessor in Appeal No. CAB-I/333/08-09 vide order dated 30.03.2010 as follows: "5.1. In appeal, the arguments taken at the assessment stage were reiterated. It was further pointed out that the assessee company was one of the seven resulting companies out of the demerger of the erstwhile GEB. In the past, GEB had issued bonds and other financial instruments for raising funds from the public and from financial institutions, GOG guaranteed to the public and the financial institutions that in case of failure on the part of GEB to redeem the bonds and other financial instruments, the same would be made good by the Government of Gujarat, In lieu of this, commission @ 1% of the outstanding value of unsecured loans was charged from the assessee. No capital expenditure was involved. Hence the addition of Rs, 8,39,04,550/- may be deleted. 5.2. I have considered the submissions of the Id. AR and the facts of the case. The issue relating to whether an item of expenditure lies in the capital or the revenue field has exercised the courts in numerous cases. From an analysis of such cases a few guiding principles/tests can be identified. One of the important tests for categorizing any expenditure as capital in nature is whether the laying out of the impugned expenditure results in the acquisition or creation of any new asset. Where no such asset is created, it would be indicative of an expenditure which was not capital in nature. Another test relates to the principle of "enduring benefit". "Enduring benefit" may be in the form of long lasting use of an asset or the acquisition of a right to exploit certain commercial processes, etc. In the instant case, the assessee did not acquire any right to exploit a commercial technology or process, and neither ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 20 - was the benefit "enduring", since the payment of guarantee commission was an annual charge. The benefit derived from payment of such commission thus lasted for exactly one year only. Such short lived benefit cannot be categorized as "enduring". Hence, I am inclined to the view that the payment of guarantee commission was a revenue expenditure. 5.3 Further, the jurisdictional Bench of ITAT had occasion to consider the allowability of guarantee commission paid to a Director of the company in respect of loans taken from the bank. In the case of Himalaya Machinery Pvt. Ltd, (ITA No. 738/Ahd/2009) for AY 2006-07, the Tribunal held, vide order dt. 5.6.2009, following the decision of the Rajasthan High Court in CIT v Metalising Equipment Co. Pvt. Ltd, 8 DTR 12, that the payment of commission for guaranteeing repayment of loan was allowable as revenue expense. In the instant case, the loan has been guaranteed by the Government of Gujarat. Hence, quite apart from the other sound reasons for treating the expenditure as revenue, it would be unrealistic to say that the appellant company could derive any undue advantage or collateral benefit by making such payment to the GOG. In view of the totality of the circumstances, I am of the opinion that the AO was not justified in treating the payment of guarantee commission (Rs. 8,39,04,550/-) as capital in nature. The addition is directed to be deleted." 5.1.5. Besides, the Hon'ble Supreme Court of India in its decision in the case of Sivakami Mills Ltd. 95 Taxmann 73 (SC) has held that guarantee commission paid to the bank to secure the due payment of the installments of loans taken for the purchase of machinery from foreign country on deferred payment basis was revenue expenditure and was allowable as such. Following this decisions as well as the decision in the case of Gujarat Energy Transmission Corporation Ltd.(supra), this ground of appeal is allowed and disallowance made by the AO is directed to be deleted.” 6.2 The issue has already been subjected to judicial consideration in The DCIT vs. Gujarat Energy Transmission Corporation Ltd. ITA No. 633/Ahd/2013 concerning A.Y. 2009-10 order dated 05.09.2019 and thus is no longer res integra. In parity with the view expressed by the co-ordinate bench, we do not see any error in the conclusion drawn by the CIT(A) in favour of the assessee.” 44. In the absence of any changed circumstances we do not find any reason to deviate from the stand taken by the Coordinate Bench. Hence, we do not find any reason to interfere of the order passed by the Ld. CIT(A) in deleting the guarantee fees paid to the Government of Gujarat to the amount of Rs. 1,00,26,006/-. The ground preferred by Revenue is, therefore, fails and thus, dismissed. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 21 - 45. Ground No.2:- Deletion of loss due to flood, cyclone, fire etc. to the tune of Rs. 27,58,000/- has been challenged before us by the Revenue. 46. At the time of hearing of the matter the Ld. DR relied upon the order passed by the authorities below. 47. On the other hand, the Ld. Counsel appearing for the assessee submitted before us that the issue is covered in favour of the assessee in assessee’s own case by and under the judgment passed by the Coordinate Bench in ITA No. 3111/Ahd/2011 for A.Y. 2008-09. On this aspect he has drawn our attention to Page 105 of the Paper Book filed before us. 48. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 49. We have carefully considered the order passed by the Coordinate Bench in ITA No. 3111/Ahd/2011 for A.Y. 2008-09. While dealing with the ground the Coordinate Bench has been pleased to observe as follows: “5. The Revenue’s second substantive ground assails correctness of the lower appellate order deleting addition of Rs. 124.8 lacs made on account of disallowance of extra ordinary items being losses due to cyclone, flood and fire etc made for want of supportive evidence. We find that the CIT(A)’s order under challenges deals with Assessing officer’s observations and assessee’s arguments as under:- “6. Ground No. 5 of appeal is regarding disallowance of extra-" 4 ordinary items amounting to Rs.1,24,28,000/-. Assessing Officer disallowed loss on account of flood, cyclone, fire etc. of Rs.124.28 lakh claimed under the head "Extra-ordinary items" on the ground that appellant had not submitted details such as nature of loss, how it was quantified etc. 6.1 In appeal, submissions as under were made:- ''Ground No.5: Disallowance out of Extra-ordinary items. The learned Assessing Officer has disallowed Extra-ordinary Items amounting to Rs.1,24,28,000/- without any cogent reasons whatsoever. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 22 - During the course of assessment proceedings, the learned Assessing Officer had called for the information relating to Extraordinary items vide item No.29 of the notice dated 18-08-2010 issued under section 14291) of the I T Act. The learned Assessing Officer had asked to give details and justification for allowability of the expenses. In response to the same, complete details of the expenses were filed vide letter No. DGVCL/GM(F&A)/10/15523 dated 15-12-2010. It was explained at the time of assessment proceedings that this expenditure has been incurred on account of expenses incurred for rehabilitation and repairs works undertaken due to floods/cyclones at various Divisions of the Company. The division-wise breakup of the expenditure of 124.28 lakhs as submitted before the learned Assessing Officer is enclosed herewith. It is clarified that due to unforeseen cyclone -and flood in F.Y 2007- 08, the distribution network in and around particularly Surat area was affected adversely and hence, the company had to incur expenditure towards restoration of Line networks in the jurisdiction of the company. The repairs are in the nature of line maintenance network involving replacement of conductors, repairs carried out to transformers, replacement of cables, replacement of meter and meter boxes, etc. In this regard, as an illustration, it is submitted that out of the total expenditure of '56.83 lakhs incurred by Surat (O & M ) division, the major expenditure related to the following :- Sr no Particulars of item Amt(’) 1. Replacement of alluminium alloy conductors of different sizes 14.37 lacs 2. Replacement of PVC Unarmoured Cables of different sizes 2.53 lacs 3. Replacement of RSJ Girder 116x100x11 mtr long 16.21 lacs 4. Repair charges of transformers of different sizes 12.44 lacs 5. Other expenditure (related to replacement of GI stay wires, Meters, meter boxes, Shackle Insulators, Kit kat fuses, Pin Insulators, Stay Clamps for Poles, etc). 11.28 lacs It is further submitted that at the time of natural calamity like earthquakes, cyclone, floods, fire etc., the company being a public utility undertaking has to incur expenditure immediately for restoration of power. For the purpose the loss incurred due to the' calamity as well as the expenditure on repairs etc., is estimated. On the basis of estimate, the company represent to the Government of Gujarat for subsidy/grant against the loss on account of flood, cyclone, fire, etc. It can be seen from the Annual Accounts that the company had received a grant/subsidy from the Government amounting to '1789.94 lacs against losses on account of Floods in the immediately preceding year in which heavy floods were there. The said subsidy was shown by the company as other income in Schedule -20 of the Annual Accounts. Thus it is submitted that the subsidy received for losses -is shown as income and the expenses incurred for repairs, restoration work are shown as extra-ordinary items. In view of the facts and circumstances, it is submitted that the entire expenditure is incurred out of business expediency is of revenue nature and is fully allowable. It is only the accounting treatment that the said expenditure is shown as extra-ordinary ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 23 - items. The appellant, therefore, prays that the .disallowances made on this count may be deleted. The appellant also invites your honour's kind attention to the fact that the similar issue has been decided favourably by the Hon'ble Commissioner (Appeals) in the case of Gujarat Energy Transmission Corp. Ltd., a sister concern of the appellant company, for the Asst. Year 2006-07 and 2007-08. The copy of the CIT(A)'s order passed for the Asst, Year 2006-07 is enclosed in Annexure-III." 6.2. I have considered facts of the case and appellant's submissions. Similar issue was considered by my learned predecessor CIT(A)-I, Baroda in case of Gujarat Energy Transmission Corporation Ltd., sister concern of the appellant in CAB- I/333/08-09 through order dated 30.3.2010 for A.Y.2006-07 deciding the issue in favour of the concerned assessee. In appellant's case also, the expenditure incurred was less than the subsidy received from the Government on account of floods and the excess was offered for taxation. Appellant also filed Division wise details of expenses towards flood related damages through letter dated 15.12.2010 before the Assessing Officer. Further, being an undertaking wholly owned by the Government of Gujarat, appellant's accounts were audited by the auditors appointed by C & A G. In this situation and following my learned predecessor CIT(A)-I, Baroda's order in case of Gujarat Energy Transmission Corporation Ltd. in A.Y.2006-07, disallowance of Rs. 1,24,28,000/- is cancelled.” 6. We have considered the Revenue’s contentions and perused the record. The Assessing Officer stated the sole ground for rejecting the claim in question to lack of evidence. The lower appellate order mentions very clearly that the assessee had duly filed a letter dated 15-12-2012 comprising of all necessary details; division-wise on expenses towards flood related damages. The Revenue does not produce on record copy of the above stated letter so as to dispel the above said specific findings. The CIT(A) further relies on an identical order dealing with the very claim. The same has also gone unrebutted in course of hearing before us. We decide this ground as well against the Revenue. Its appeal ITA 3111/Ahd/2011 is rejected.” In the absence of any changed circumstances we do not find any reason to interfere with order passed by the Coordinate Bench which according to us is just and correct and without any ambiguity so as to warrant interference. Hence, this ground of appeal is found to be devoid of any merit and thus, dismissed. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 24 - ITA No. 618/Ahd/2018(A.Y. 2011-2):- 50. This Ground relates to the deletion of addition/adjustment made to the Book Profit computed under Section 115JB of the Act on account of Capital Grants claimed of Rs. 37,07,37,000/- 51. The brief facts leading to the issue is this that the Ld. AO made addition of Rs. 37,07,37,000/- to the Book Profit under Section 115JB of the Act on account of Capital Grants and subsidies and consumers contribution on the ground that the appellant should transfer 15% of the total grants/subsidies/consumer contribution receipt during the year as against 10% offered by the appellant. 52. Before the First Appellate Authority the assessee submitted that in assessee’s own case for A.Y. 2012-13 the Ld. CIT(A) has deleted the addition. In that view of the matter considering the order dated 21.08.2015 passed by his predecessor, the Ld. CIT(A) hold that the said addition cannot be made to the Book Profit as this item has not been mentioned in any of the Clauses of the Explanation to Section 115JB of the Act. He, therefore, directed the Ld. AO to delete such addition. 53. At the time of hearing of the matter the Ld. DR relied upon the order passed by the authorities below. 54. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the issue may be directed to be decided by the Ld. AO. 55. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 25 - 56. We find that the Ld. CIT(A) while dealing this ground for assessee’s own case observed as follows: “10.1. During the course of the appellate proceedings, the appellant's AR has stated as follows in his submission regarding this disallowance: "Ground No.7: Adjustments while computing book profits under section 115JB of the IT Act 1.0 The learned Assessing Officer has enhanced the Book Profit computed under section 115JB of the Income Tax Act, 1961 by making adjustments on account of (i) Capital Grants Rs.50,01,25,000/-; and (ii) Prior Period Expenses Rs.16,29,000/- and Prior Period Income Rs.23,00,000/-. 1.1 In view of the discussion and submissions in Ground No. 4 and 6 above, the appellant prays that the adjustment made on this count while computing the book profits under section 115JB of the Act may be deleted. 1.2 The appellant invites your honour's kind attention to the decision of jurisdictional Tribunal viz., ITAT, Ahmedabad in case of ACIT vs. Gujarat State Energy Generation Limited wherein the question before the ITAT was whether the adjustment can be made in the book profit under section 115JB for the items which are not mentioned specifically in the explanation to section 115JB. In this case the CIT(A) had allowed the assessee's appeal consequent to which Revenue preferred an appeal before Tribunal. After detailed discussion the ITAT has held as under : "With regard to controversy involved in ground nos.4,5 and 6, before the Learned Commissioner of Income Tax(Appeals), it was contended by the Id. Counsel for the assessee that while computing the book profit under section 115JB, as held by the Hon'ble Supreme Court in the case of Apollo Tyres reported in 255 ITR 273, the additions made (a) on account of disallowance u/s,14A - Rs.6,00,000/-, (b) interest or investment in bonds -Rs.1,30,000/- and (c) prior period expenses - Ris.19,29,184 are beyond the scope of Explanation to section 115JB. Without prejudice to this, was also contended that interest on investment in bonds amounting to Rs. 1,30,000/- stood already included in the book profit as computed in profit & loss a/c. And hence could not have been computed in the book profit. After considering bot the sides, in the impugned order, the Learned Commissioner of Income Tax(Appeals)took the view that disallowance under section 14A and addition of Rs.1,30,000/- t the book profit cannot be made for the detailed reasons given in para 7.2, whit reads as under: "7.2 The matter has been considered. The decision of Hon'ble Supreme Court in the case of Apolly Tyres (supra) is quite unambiguous. Only such items which are specifically mentioned in the Explanation to section 115JB need to be excluded or included, as the case be, and nothing more can be brought in. All the three items listed above do not feature in the Explanation. Otherwise, the disallowance u/s.14A would be material in computation of the normal process of income while the second item interest on investment in bonds stands already included in the book profit. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 26 - As far as the prior period expenses are concerned, there is no such mention in the explanation. The assessment order on the other hand is silent as to under which category it is being included for the matter to be further analyzed. Therefore, as the matter stands, none of the three items can be added for computation of book profit. 11. At the time of hearing before us, the ld. D.R. could not pointed out how the view taken by the Learned Commissioner of Income Tax(Appeals) is not acceptable. We are, therefore, inclined to uphold the order of the Learned Commissioner of Income Tax(Appeals). Thus, ground nos. 4, 5 and 6 of the Revenue's appeal are rejected." 1.3 In view of the above, the appellant submits that the facts in the above case are exactly identical to the appellant's case. The copy of the judgment is enclosed for immediate reference. Accordingly the above judgement of the jurisdictional Tribunal is squarely applicable to the appellant's case. 1.4 The appellant also invites your honour's kind attention to the fact that the similar issue has been decided by the Hon'ble Commissioner (Appeals) in the case of the Holding Company of the appellant viz., Gujarat Urja Vikas Niqam Ltd,, for the Asst. Year 2010-11. The copy of the relevant extracts of the CIT(A)'s order passed for the Asst. Year 2010-11 in case of the Holding Company is enclosed in Annexure-VIII for immediate reference. " 10.2 I have considered the appellant's submission and AO's observations. So far as addition on account of prior period expenses to the book profit is concerned the same is covered in favour of the appellant by the decision of ITAT, Ahmedabad Bench in the case of Gujarat State Energy Generation Ltd. In ITA No. 1777/Ahd/2009 for AY 2006-07. The relevant parts of this decision have been quoted by the appellant in its submission reproduced above. So far as addition on account of capital grant is concerned, the same also cannot be made as this item is not mentioned in any of the clauses in the explanation to section 115JB. Hence this addition is also directed to be deleted.” 57. Having heard to the facts and circumstances of the case we find it fit and proper to remit the issue to the file of the Ld. AO to adjudicating the issue taking into consideration the Capital Grant and subsidies and consumers contribution made by the assessee and pass orders in accordance with law upon granting a reasonable opportunity of being heard to the assessee. This ground of appeal preferred by the Revenue is allowed for statistical purposes. ITA No.2858/Ahd/2015 & 05 others Dakshin Gujarat Vij Co. Ltd. vs. DCIT Asst.Years – 2010-11, 2011-12 & 2012-13 - 27 - ITA No. 3163/Ahd/2015(A.Y.) 2012-13):- 58. Ground No.1:- Identical ground has already been decided by us in ITA No. 2789/Ahd/2015 for A.Y. 2010-11 as Ground No. 1 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 59. Ground No.2:- Identical ground has already been decided by us in ITA No. 2789/Ahd/2015 for A.Y. 2010-11 as Ground No. 2 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 60. Ground No.3:- Identical ground has already been decided by us in ITA No. 618/Ahd/2018 for A.Y. 2011-12 in Ground No. 1 therein. In the absence of any changed circumstances the same shall apply mutatis mutandis. 61. Ground No. 4 is general in nature and no need to pass any separate order. 62. In the combined results, the appeals preferred by the assessee are partly allowed and the appeals preferred by the Revenue are dismissed. This Order pronounced in Open Court on 22/07/2022 Sd/- Sd/- (ANNAPURNA GUPTA) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/07/2022 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 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, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad