The ACIT, 1(1), Bhopal V. M/s HEG Limited, Raisen

ITA 592/IND/2012

• Counselvise Citation: 59222714 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NOS. 592 & 618/IND/2012 A.YS. 2008-09 & 2009-10 ACIT-1(1), BHOPAL :: APPELLANT VS M/S. HEG LTD., MANDIDEEP PAN AAACH 6184 K :: RESPONDENT REVENUE B Y SMT. MRIDULA BAJPAI ASSESSEE BY SHRI SUMIT NEMA DATE OF HEARING 28.1.2014 DATE OF PRONOUNCEMENT 28.1.2014 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS IN APPEALS CHALLENGING THE ORDER DA TED 16.8.2012 & 11.10.2012 OF THE LEARNED CIT(A)-I, BHO PAL, FOR THE A.YS.2008-09 & 2009-10, RESPECTIVELY. FIRST WE SHALL TAKE 2 UP THE APPEAL OF THE REVENUE FOR THE A.Y. 2008 - 09 (ITA NO. 592/IND/2012). 2. DURING HEARING, WE HAVE HEARD SMT. MRIDULA BAJPA I, LD. CIT/DR AND SHRI SUMIT NEMA, LD. COUNSEL FOR THE ASS ESSEE. THE FIRST GROUND PERTAINS TO DELETION OF ADDITION O F RS.26,10,45,112/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEDUCTION U/S 80-IA OF THE I.T. ACT IN RESPECT O F CAPTIVE THERMAL POWER DIVISION AT MANDIDEEP AND ALSO SIMULT ANEOUS DISALLOWANCE OF 80-IA OF POWER UNITS. AT THE OUTSET , THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THIS ISSU E IS COVERED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE BY THE DE CISION OF THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE ALSO INV ITED OUR ATTENTION TO THE ORDER DATED 14 TH FEBRUARY, 2011 (PAGES 1 TO 17 OF THE PAPER BOOK). THE LD. CIT/DR THOUGH DEFEND ED THE ADDITION BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TR IBUNAL. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT ADVERTING FURTHER AND IN VIEW OF THIS FACTUAL POSITION, WE ARE REPROD UCING 3 HEREUNDER THE RELEVANT PORTION FROM THE AFOREQUOTED DECISION OF THE TRIBUNAL: 5. COMMON ISSUE IN ALL THE YEARS RELATES TO ALL OWABILITY OF DEDUCTION U/S 80IA ON ACCOUNT OF POWER GENERATED BY TWO POWER PLANTS SET UP BY ASSESSEE AT DURG (NOW IN CHH ATISGARH) AND TAWA (MADHYA PRADESH). THE POWER SO GENERATED W AS USED MAINLY FOR CAPTIVE CONSUMPTION BY THE ASSESSEES GR APHITE ELECTRODE PLANT AT MANDIDEEP (M.P.). 6. AT THE OUT-SET, LD. AUTHORIZED REPRESENT ATIVE PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1999-2000 TO 2004-05, WHEREIN EXAC TLY SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE . 7. ON THE OTHER HAND, IT WAS CONTENDED BY T HE LD. CIT DR THAT THE DEPARTMENT IS ALREADY FIGHTING THIS CASE I N EARLIER YEARS IN THE HON'BLE M.P. HIGH COURT ON COMPARATIVE PRICE OF RS. 2.07 AT WHICH ELECTRICITY IS SOLD TO MPEB, TERMED BY ASS ESSEE AS INFIRM PRICE AND ALSO ON WHETHER ONE LIMB OF ASSE SSEE CAN SALE POWER TO ANOTHER LIMB OF ASSESSEE AND EARN PROFIT O N IT TO CLAIM DEDUCTION U/S 80IA. THEREFORE, HE RELIED ON AOS OR DER ON THESE ISSUES. 8. IT WAS FURTHER CONTENDED BY THE LD. CIT D.R. THAT IT WAS NOT POSSIBLE FOR POWER UNIT TAWA TO GENERATE HUGE G ROSS PROFIT OF 75 % AND NET PROFIT OF 55 % AND THIS WAS NOT ARISIN G OUT OF NATURAL COURSE OF BUSINESS BUT BECAUSE OF ARTIFICIA L RAISING OF SALE PRICE OF POWER BY TAWA TO GRAPHITE UNIT OF ASS ESSEE AT RS. 3.90 PER KWH WHEREAS SAME POWER IS SOLD BY DURG UN IT TO GRAPHITE UNIT AT RS. 3.24 KWH AND NO REASON WAS PRO VIDED FOR THIS DIFFERENCE OF RATE, IN TWO UNITS UNDER THE SAM E MANAGEMENT. SALE RATE OF POWER BY DURG UNIT TO STEE L PLANT OF ASSESSEE IS STILL LESS AT RS. 2.96 PER KWH. HE FURT HER CONTENDED THAT WHILE ADMINISTRATIVE EXPENSES ARE AS HIGH AS 55% IN GRAPHITE UNIT OF ASSESSEE (MAIN UNIT), THEY ARE ONL Y 30% OR SO IN BOTH DURG POWER UNIT AND TAWA POWER UNIT, WHICH IS CLEAR PROOF OF DIVERSION OF COMMON ADMINISTRATIVE AND HEA D OFFICE EXPENSES TO GRAPHITE UNIT (NON 80IA UNIT) TO CLAIM EXCESS DEDUCTION U/S 80IA IN TAWA AND DRUG POWER UNIT. 9. HE FURTHER CONTENDED THAT THE ASSESSEE H AS COMPLETELY FAILED TO EXPLAIN REASON FOR SUCH HIGH PROFIT GROSS PROFIT OF 71.20 % IN POWER DIVISION, TAWA AND NET PROFIT RATE OF 5 4.59 % IN THIS 4 UNIT IN ASSESSMENT YEAR 2006 - 07. EVEN IN ASSESSMENT YEAR 2005-06 THE NET PROFIT RATE OF POWER DIVISION, TAW A ITSELF WAS 37.40%. WHAT IS THE BASIS AND REASON FOR SUCH A JUM P OF ABOUT 17 % IN ITS NET PROFIT RATE ? IN THIS REGARD, ASSE SSEE IS REQUIRED TO EXPLAIN THE FOLLOWING POINTS :- (A) HOW THE CONSUMPTION OF MATERIAL IS SHOWN AT R S. NIL IN TAWA UNIT. (B) WHAT IS THE BASIS THAT WHILE POWER DIVISION, D URG HAS CHARGED A RATE OF POWER OF RS. 3.24 PER KWH, THE RA TE OF POWER CHARGED BY POWER DIVISION TAWA IS RS. 3.90 PER KWS FROM GRAPHITE DIVISION, MANDIDEEP. FOR SUPPLY OF SAME PO WER TO SAME UNIT WHY TWO DIFFERENT RATES ARE CHARGED ? IT IS PERTINENT TO MENTION THAT RATE CHARGED BY BO TH TAWA & DRUG POWER DIVISION ARE SAME FROM MPEB WHICH IS R S. 2.07 PER KWH. IN THAT CASE, WHAT IS RATIONAL IN CHARGING DIFFERENT RATES FROM GRAPHITE DIVISION. CHARGING OF SUCH RATE IS ALSO WRONG AND INEXPLICAB LE IF THE RATE QUOTED BY ASSESSEE FOR BREAK UP PER UNIT IN TH ESE TWO POWER DIVISIONS IS SEEN. WHILE BREAK EVEN RATE FOR TAWA IS RS. 1.35 PER KWH ONLY BREAK EVEN RATE FOR DURG POWER DI VISION IS RS. 2.17 PER KWH. THIS PROVES BEYOND DOUBT THAT RATE OF POWER FIXED BY SAME MANAGEMENT OF ASSESSEE COMPANY FOR TAWA UNIT I S ARTIFICIALLY LEVIED AT A HIGH PRICE TO RAISE ITS PR OFIT MARGINS AND TO ARTIFICIALLY LEVIED AT A HIGH PRICE TO RAISE ITS PR OFIT MARGINS AND TO ARTIFICIALLY JACK UP ITS CLAIM OF DEDUCTION U/S 80I A OF THE INCOME-TAX ACT, 1961. IF THE UNIT CHARGE OF BREAK EVEN POINT OF TAWA UNI T WAS ONLY RS. 1.325 PER KWH, THERE WAS NO JUSTIFICATION TO CHARGE MORE THAN DOUBLE THIS RATE OF RS. 2.70 PER KWH AND THERE WAS ABSOLUTELY NO JUSTIFICATION TO CHARGE MORE THAN RAT E OF RS. 3.24 PER KWH LEVIED BY DURG POWER UNIT FROM GRAPHITE DI VISION, MANDIDEEP. THIS FACT OF ARTIFICIAL PROFIT IN HANDS OF POWER D IVISION, TAWA, WAS NEVER BROUGHT AND EXAMINED IN DETAIL IN A NY EARLIER YEAR. HENCE EARLIER DECISION OF HON'BLE I.T.A.T. WI LL NOT BE APPLICABLE TO THESE FACTS AS PRINCIPLE OF RES JUDIC ATA WILL NOT APPLY, WHERE EACH ASSESSMENT YEAR IS DIFFERENT. (C) G.P. RATE OF 71.20 % IN THE HANDS OF POWER DIV ISION, 5 TAWA IS GLARING IN VIEW OF THE FACT THAT MPEB IS RU NNING IN HUGE LOSSES AND EVEN MAJOR POWER COMPANIES LIKE TATA POW ER AND RELIANCE POWER ARE SHOWING GROSS PROFIT OF ONLY UP TO 30 % AND NET PROFIT IS ONLY 10 TO 20 %. IN VIEW OF THIS EVE N GROSS PROFIT RATE OF 42.39 % OF POWER DIVISION, DURG IS HIGH. (D) WHEELING CHARGES ARE BASICALLY TRANSMISSION C HARGES FOR WHICH CREDITS ARE GIVEN TO TAWA AND DURG POWER DIVI SION DEBITS ARE GIVEN TO GRAPHITE DIVISION, MANDIDEEP. SUCH CRE DIT TO POWER DIVISION IS NOT ON ANY ACTUAL PAYMENT BASIS AND IT IS NOT EVEN BASED ON MPEB/CSEB BILLS BASED ON TRANSMISSION LINE S PROVIDED BY THEM. THEREFORE, ONUS IS ON ASSESSEE TO EXPLAIN THE CREDIT CLAIM OF RS. 26,07,372/- IN TAWA UNIT AND RS . 36,31,258/- IN DURG UNIT AS WHEELING CHARGES, OTHER WISE SUCH AMOUNT CANNOT BE CLAIMED AS DEDUCTION U/S 80IA. (E) SINCE FACTS BROUGHT OUT IN PRESENT CASE ARE DIF FERENT FORM EARLIER YEARS, PRINCIPLE OF RES JUDICATA WILL NOT A PPLY FOR WHICH RELIANCE WAS PLACED ON FOLLOWING DECISIONS :- (I) KOTAK MAHINDRA FINANCE LIMITED (BOM), 265 ITR 14. (II) NEW JEHANGIR VAKIL MILLS CO. LTD. ( S. C.), 49 ITR 137. (III) THANTHI TRUST, (2001) 247 ITR 785 (S.C.). (IV) LACHHIRAM PURANMAL, (2002) 171 CGTR 640 (MP) (F) WITH REGARD TO DISALLOWANCES OF DOMESTIC COMMISSION OF RS. 94.68 LAKHS, THE CONTENTION OF LD . CIT DR WAS AS UNDER :- ASSESSEE IS NOT ONLY REQUIRED TO GET CONFIRMATION L ETTER AND COPY OF AGREEMENT AND ESTABLISH CHEQUES PAYMENTS BUT ALS O REQUIRED TO ESTABLISH THAT SUCH PARTIES HAVE RENDERED SERVIC ES FOR THE BUSINESS OF ASSESSEE AND SHOULD DEMONSTRATION SUCH SERVICES AS HELD IN :- (I) PANIPAT WOOLEN & GENERAL MILLS, 103 ITR 66 ( S.C. ) (II) S.A. BUILDERS LIMITED, 288 ITR 1 ( S.C.) (I) INDIA MFG. MADRAS PVT.LTD., 155 ITR 774. (G) WITH REGARD TO DISALLOWANCE OF EXPORT COMMISSION, THE CONTENTION OF THE LD. CIT DR WAS AS UNDER :- ASSESSEE HAS FAILED TO EXPLAIN WHY SUCH COMMISSION REMAINS OUTSTANDING TO THE TUNE OF RS. 5 CRORES EVERY YEAR, WHEN PARTIES 6 DOING REAL WORK CHARGE IT IMMEDIATELY. NO PROOF THA T COMMISSION AGENTS FOR BOTH DOMESTIC & EXPORT COMMISSION RENDERED ANY SERVICES TO ASSESSEE AND HENCE SUCH CO MMISSION NOT ALLOWABLE SO HELD IN MCDOWELL & COMPANY LIMITED (KER), 291 ITR 107, SCHNEIDER ELECTRIC INDIA LIMITED ( DEL ) 304 ITR 360, ONAM AGARBATTI CO.(KAR), 310 ITR 56. 10. WE HAVE CAREFULLY CONSIDERED THE RIVA L CONTENTIONS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE MAIN ISSUE IN QUESTION IS ALLOWABILITY OF DEDUCTION U/S 80IA ON ACCOUNT OF POWER GENERATED BY TWO POWER PLANTS SET UP BY ASSESSEE AT DURG AND TAWA. THE POWER SO GENERATED W AS USED MAINLY FOR CAPTIVE CONSUMPTION BY THE ASSESSEE GRAP HITE ELECTRODES PLANT AT MANDIDEEP. THIS ISSUE HAS BEEN ELABORATELY DEALT WITH BY THE TRIBUNAL IN ASSESSEES OWN CASE B ASICALLY IN THE ASSESSMENT YEAR 2001-02 AND THEREAFTER, THE SAM E WAS CONSISTENTLY FOLLOWED BY COORDINATE BENCH IN SUBSEQ UENT YEARS. LD. CIT D.R. ALSO, DID NOT CONTROVERT THIS FACT. CO PIES OF ALL TRIBUNAL ORDERS WERE PLACED ON RECORD. AS THE FACTS AND CIRCUMSTANCES ARE SAME, WE RESPECTFULLY FOLLOW THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WHICH HAS NOT BEEN DISPUTED BY THE LD. CIT DR. 11. IN THE ASSESSMENT YEAR 2005-06, GROUND TAKEN BY THE REVENUE RELATE TO ADDITION OF RS. 13,87,12,034/- I N THE PROFIT OF GRAPHITE DIVISION, MANDIDEEP TO THE EXTENT DEDUCTIO N 80IA WAS CLAIMED BY THE DURG & TAWA DIVISIONS OF THE COMPANY . THE DETAILS OF ADDITION MADE BY THE ASSESSING OFFICER A RE AS UNDER :- I. DEDUCTION U/S 80IA (80IB) CLAIMED BY POWER DIVISION, DURG 9,12,96,476 II. DEDUCTION U/S 80IA(80IB) CLAIMED BY POWER DIVISION TAWA 4,74,15,5 58 13,87,12,034 THE ABOVE INCOME OF THESE DIVISIONS WAS REDUCED TO , NIL BY THE ASSESSING OFFICER BY ADDING THE SAID AMOUNT IN THE PROFIT OF GRAPHITE DIVISION, MANDIDEEP AS PER DETAILS GIVE N HEREUNDER :- A. DURG DIVISION (PAGE 9 OF ASSESSMENT ORDER) 4,56,30,83 7 B. TAWA DIVISION (PAGE 9 OF ASSESSMENT ORDER) 1,25,91,058 5,82,21,895 7 ADDITION IN GRAPHITE DIVISION TOWARDS NON DEBIT OF FINANCIAL EXPENSES OF POWER DIVISIONS AND ADMINISTRATIVE EXPENSES OF HEAD OFFICE NOT DEBITED TO POWER DIVISIONS INCLUDING COMMON EXPENSES OF - A. DURG DIVISION AMOUNTING TO RS. 32,67,985 B. TAWA DIVISION AMOUNTING TO RS. 35,20,150 TOTAL DISALLOWANCE UNDER THESE HEADS MADE OF RS. 8, 04,90,139 RS. 13,87,12,034 (CALCULATION NOT GIVEN BY AO OF 8,04,90,139 DIFFERENCE RS. 7,37,02,004) THEREBY, REDUCING THE INCOME OF DURG & TAWA DIVISIO NS OF RS. 13,87,12,034/- TO NIL FIGURE FOR ALLOWANCE OF CLAIM OF DEDUCTION U/S 80IA (80IB). 12. THE LD. AO HAS ON PAGES 9 TO 11 OF HIS O RDER, ADOPTED THE CHARGEABLE RATE BY POWER DIVISIONS TO GRAPHITE DIVISION @ RS. 3.60 PER UNIT ON THE NET UNITS OF POWER SUPPLIE D TO GRAPHITE DIVISION. THE BREAK UP OF RS. 3.60 PER UNIT IS GIVE N BY HIM ON PAGES 6 & 7 OF THE ASSESSMENT ORDER, BY CONSIDERING ONLY ENERGY CHARGES SUBJECT TO REBATE ALLOWED BY THE ELECTRICIT Y BOARD THEREBY IGNORING THE VARIOUS OTHER CHARGES AND DUTI ES COLLECTED BY ELECTRICITY BOARD FROM ITS REGULAR CUSTOMERS. IT IS BECAUSE OF THESE TWO REASONS, THE ABOVEMENTIONED REDUCTION OF RS. 4,56,30,387/- AND THAT OF RS. 1,25,91,058/- HAVE BE EN MADE IN THE TURNOVER OF DRUG & TAWA POWER DIVISIONS AND THU S THE AO HAS HELD THAT THESE TWO POWER DIVISIONS ARE NOT ENT ITLED TO DEDUCTION U/S 80IA ON THESE AMOUNTS. THE CIT(A) DEL ETED THE ADDITIONS. AS THE ISSUE IS COVERED BY SERIES OF I.T .A.T. ORDER IN ASSESSING OFFICERS OWN CASE, WE DO NOT FIND ANY RE ASON TO INTERFERE IN THE ORDER OF CIT(A). ACCORDINGLY, GROU ND TAKEN BY REVENUE IS DISMISSED. 2.2 WE NOTE THAT ON IDENTICAL ISSUE/FACTS FO R A.Y. 2005-06 TO 2007-08, DUE DELIBERATION HAS BEEN MADE BY THE T RIBUNAL. 8 THERE IS UNCONTROVERTED FINDING IN PARA 6.4 (PAGE 8 OF THE IMPUGNED ORDER) THAT THE ASSESSEE IS HAVING A CAPTI VE POWER PLANT WHERE POWER WAS GENERATED AND SUBSTANTIALLY S HOWN TO BE SOLD TO THE GRAPHITE DIVISION OF THE ASSESSEE @R S.3.83 PER UNIT AND SURPLUS POWER OF THE CAPTIVE PLANT WAS TO BE SOLD TO MPSEB @RS.1.88 PER UNIT AND THE ASSESSEE WAS NOT AL LOWED TO SELL SURPLUS POWER IN THE OPEN MARKET. THE ASSESSIN G OFFICER MADE THE ADDITION ON THE PLEA THAT SUCH DEDUCTION C ANNOT BE ALLOWED AS THERE CANNOT BE SUCH SALE/PURCHASE BETWE EN THE SAME ASSESSEE. THE PLEA OF THE ASSESSEE IS THAT THE ASSESSEE HAS NO CONTROL ON THE RATE WHICH HAS BEEN DECIDED B Y MPSEB. SINCE THE FACTS AND THE ISSUE ARE UNCONTROVERTEDLY IDENTICAL IN THE IMPUGNED YEAR ALSO, THEREFORE, THERE IS NO REAS ON TO DEVIATE FROM THE SAME, CONSEQUENTLY, FOLLOWING THE AFORESAID DECISION TAKEN IN EARLIER A.YS., WE DO NOT FIND ANY INFIRMITY IN THE STAND OF THE LD. CIT(A). IT IS AFFIRMED. ON THE SAME REASONING, OUR CONCLUSION WILL ALSO COVER IDENTICAL GROUND NO. 1 FOR A.Y. 2009-10 (ITA NO.618/IND/2012). THEREFORE , GROUND NO.1 OF BOTH THE DEPARTMENTAL APPEALS IS DISMISSED. 9 3. THE NEXT GROUND PERTAINS TO DELETION OF ADDITION OF RS.4,85,34,466/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF OUTSTANDING LIABILITY OF EXPORT COMMISSION DISALLOW ED AS DEFERMENT OF INCOME AND NO CONFIRMATION BY RECIPIEN TS. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE POINTED OUT TH AT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE IN ITS OWN CAS E BY THE DECISION OF THE TRIBUNAL, FOR WHICH, OUR ATTENTION WAS INVITED TO THE ORDER DATED 14 TH FEBRUARY, 2011 (PAGES 1 TO 17 OF THE PAPER BOOK). THE LD. CIT/DR THOUGH DEFENDED THE ADD ITION BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT THE IMPU GNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL. 3.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT ADVERTING FURTHER AND IN VIEW OF THIS FACTUAL POSITION, WE ARE REPROD UCING HEREUNDER THE RELEVANT PORTION FROM THE AFOREQUOTED DECISION OF THE TRIBUNAL: 27 SIMILARLY, IN THE ASSESSMENT YEAR 2007-08, THE CIT(A) HAS DELETED THE DISALLOWANCE OF EXPORT COMMISSION O F RS. 4.11 LAKHS AFTER HAVING THE FOLLOWING OBSERVATIONS :- 8.7 I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE A BOVE SUBMISSIONS ADVANCED BY THE LD. AUTHORIZED REPRESENTATIVE. I HAVE ALSO GONE THROUGH THE FINDIN GS OF THE ASSESSING OFFICER MENTIONED IN THE ASSESSMEN T 10 ORDER . IN MY CONSIDERED VIEW, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING 50% OF THE EXPORT COMMISSION OF RS. 2,82,32,191/- PAYABLE AT THE YEA R END. I FIND IT PLAINLY ARBITRARY, MORE SO WHEN EXPO RT COMMISSION EXPENSES HAVE ALWAYS BEEN ALLOWED TO THE APPELLANT IN THE PAST ASSESSMENT YEARS. THE DEPARTMENT HAS NOT PREFERRED EVEN A SECOND APPEAL AGAINST THE CIT(A)S ORDER ALLOWING RELIEF ON THE V ERY SAME ISSUE IN THE ASSESSMENT YEAR 2005-06. ON ITS PART, THE APPELLANT SUBMITTED ALL THE RELEVANT DETA ILS WHICH SUBSTANTIATE ITS CLAIM OF EXPORT COMMISSION. I FIND THAT THE APPELLANT HAS REMITTED EXPORT COMMISSION OF RS. 632.61 LACS DURING THE CURRENT YE AR WHICH IS ALMOST SAME AS EXPORT COMMISSION DEBITED O F RS. 641.69 LACS IN THE PROFIT AND LOSS ACCOUNT DURI NG THE CURRENT YEAR. THE EXPORT COMMISSION HAS BEEN REMITTED THROUGH PROPER BANKING CHANNELS. ACCORDINGLY, THE DISALLOWANCE OF RS. 2,82,32,191/- MADE TOWARDS COMMISSION ON EXPORT SALES IS DELETED. FROM THE RECORD, WE FOUND THAT THE ASSESSEE WAS CON SISTENTLY INCURRING SUCH EXPENDITURE, EVEN IN THE ASSESSMENT YEAR 2006- 07. SIMILAR DISALLOWANCE HAS BEEN DELETED BY THE LD .CIT(A) AND THE REVENUE HAS NOT PREFERRED ANY APPEAL. KEEPING I N VIEW ALL THESE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) FOR DELETING THE DISALLOWANCE OF EXPORT COMMISSION, WHICH WAS LEGITIMATELY INCURRED FOR THE PURPOSE OF BUSINESS. 3.2 WE NOTE THAT ON IDENTICAL ISSUE/FACTS FO R A.Y. 2007- 08, DUE DELIBERATION HAS BEEN MADE BY THE TRIBUNAL. IT IS ALSO NOTED THAT EVEN THE LD. ASSESSING OFFICER HAS MADE THE ADDITION ON ESTIMATE/PRESUMPTIVE BASIS WITHOUT BRIN ING ANY ADVERSE MATERIAL. SINCE THE FACTS AND THE ISSUE ARE UNCONTROVERTEDLY IDENTICAL IN THE IMPUGNED YEAR ALS O, THEREFORE, THERE IS NO REASON TO DEVIATE FROM THE S AME, 11 CONSEQUENTLY, FOLLOWING THE AFORESAID DECISION TAKE N IN EARLIER A.Y., WE DO NOT FIND ANY INFIRMITY IN THE STAND OF THE LD. CIT(A). IT IS AFFIRMED. ON THE SAME REASONING, IT WILL ALSO COVER IDENTICAL GROUND NO.2 FOR A.Y. 2009-10 (ITA NO.618/IND/2012). THEREFORE, GROUND NO.2 OF BOTH TH E DEPARTMENTAL APPEALS IS DISMISSED. 4. THE LAST GROUND RAISED ONLY IN ITA NO.592 /IND/2012 (A.Y. 2005-06) PERTAINS TO DELETION OF ADDITION OF RS.17,14,476/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF DISALLOWANCE OF PROVISION ON ACCOUNT OF PAYMENTS TO HINDUSTAN ELECTRO GRAPHITE LIMITED OFFICERS GRATUI TY FUND. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE BY THE DECISION OF THE TRIBUNAL. THE LD. COUNSEL FO R THE ASSESSEE ALSO INVITED OUR ATTENTION TO THE ORDER DA TED 14 TH FEBRUARY, 2011 (PAGES 1 TO 17 OF THE PAPER BOOK). T HE LD. CIT/DR THOUGH DEFENDED THE ADDITION BUT DID NOT CON TROVERT THE FACTUAL MATRIX THAT THE IMPUGNED ISSUE IS COVER ED BY THE DECISION OF THE TRIBUNAL. 12 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT ADVERTING FURTHER AND IN VIEW OF THIS FACTUAL POSITION, WE ARE REPROD UCING HEREUNDER THE RELEVANT PORTION FROM THE AFOREQUOTED DECISION OF THE TRIBUNAL: 24 WITH REGARD TO DISALLOWANCE OF PAYMENT TO HINDUSTAN ELECTRO GRAPHITE OFFICERS GRATUITY FUND, WE FOUND THAT DURING THE YEAR, THE ASSESSEE HAD MADE CONTRIBUTION OF RS. 78,65,529/- TO HINDUSTAN ELECTROGRAPHITE LIMITED O FFICERS GRATUITY FUND AS UNDER :- D IVISION AMOUNT (RS.) GRAPHITE DIVISION MANDIDEEP 55,93,408/ - STEEL/SPONGE IRON DIVISION, DURG 16,55,069/ - POWER DIVISION, DURG 4,12,786/ - POWER DIVISION, TAWA 2,04,266/ - 25. THE LD. CIT(A) HAS DELETED THE DISALLOWAN CE BY OBSERVING THAT THE ASSESSEE HAS PRODUCED ACTUARIAL CERTIFICAT E REGARDING ASCERTAINMENT OF GRATUITY LIABILITY ISSUED BY COMPE TENT AUTHORITY. FOLLOWING WAS THE PRECISE OBSERVATION OF THE CIT(A) :- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE B Y THE LD. AUTHORIZED REPRESENTATIVE AFTER GOING THRO UGH IMPUGNED ASSESSMENT ORDER. I FIND THAT THE APPELLA NT HAS RELEVANT ACTUARIAL CERTIFICATES REGARDING SCERTAINMENT OF GRATUITY LIABILITY ISSUED BY THE COMPETENT AUTHORITY. THE ACTUARIAL CERTIFICATE GIVE S THE BASIS FOR GRATUITY LIABILITY PROVISION, AND, THEREF ORE, IT CANNOT BE SAID THAT THE LIABILITY WAS NOT ASCERTAIN ED. I FIND THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE JURISDICTIONAL I.T.A.T., INDORE BENCH IN THE CASE O F THE APPELLANT IN THE ASSESSMENT YEARS 2000-01, 2001-02 AND 2002-03. FOLLOWING THE SAME, THE DISALLOWANCE O F RS. 78,65,529/- MADE BY THE ASSESSING OFFICER IS 13 DELETED. 26 THE ABOVE FINDING OF THE CIT(A) HAS NOT BEEN CONTROVERTED. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE SAME. 4.2 WE NOTE THAT ON IDENTICAL ISSUE/FACTS FO R A.Y. 2006- 07, DUE DELIBERATION HAS BEEN MADE BY THE TRIBUNAL. THE LD. CIT(A) HAS NOT RECORDED ANY ADVERSE FINDING REGARDI NG ASCERTAINMENT OF GRATUITY LIABILITY AND FOLLOWED TH E DECISION OF THE TRIBUNAL FOR EARLIER YEARS. THE LD. ASSESSING O FFICER WHILE MAKING THE ADDITION ASKED THE ASSESSEE TO JUSTIFY T HAT THE CLAIMED EXPENSES WERE DEFINED AND ASCERTAINED. THE ADDITION WAS MADE MERELY ON THE GROUND THAT THE CONCLUSION D RAWN BY THE LD. CIT(A) HAS NOT BEEN ACCEPTED AND DEPARTMENT HAS GONE TO THE TRIBUNAL. IT IS NOTED THAT THE MATTER HAS BE EN SETTLED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND NO CONTR ARY DECISION HAS BEEN BROUGHT TO OUR NOTICE FROM HONBL E HIGHER FORUM. SINCE THE FACTS AND THE ISSUE ARE UNCONTROVE RTEDLY IDENTICAL IN THE IMPUGNED YEAR ALSO, THEREFORE, THE RE IS NO REASON TO DEVIATE FROM THE SAME, CONSEQUENTLY, FOLL OWING THE AFORESAID DECISION TAKEN IN THE A.Y. 2006-07, WE DO NOT FIND ANY INFIRMITY IN THE STAND OF THE LD. CIT(A). IT IS AFFIRMED. 14 FINALLY, BOTH THE DEPARTMENTAL APPEALS ARE DISMISSE D. THIS ORDER WAS PRONOUNCED IN THE OPEN CO URT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT TH E CONCLUSION OF THE HEARING ON 28.1.2014. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.1.2014 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYAS! 15