The DCIT, Circle-1, Bharuch V. M/s. Gujarat Narmada Valley Fertilizers & Chemicals Ltd., Bharuch

ITA 721/SRT/2018

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9276 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 21-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: YOGESH G SHAH
• Keywords: Depreciation; Transfer pricing; Rule of consistency; Scheme of amalgamation; Revenue expenditure; Capital expenditure; TDS; Set aside
• Section: 32; 37; 143(3); 92E; 40(a)(ia); 80IB; 37(1); 80IA; 144C; 8HHC

Judgement Text

आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.720/SRT/2018 & ŮȑाƗेप/C.O. No.13/SRT/2021 (AY 2013-14) (Hearing in Physical Court) Deputy Commissioner of Income-tax, Circle-1 Bharuch, 2 nd Floor, Harikunj Building, Above Bank of Baroda, Station Road, Bharuch-320001 Vs Gujarat Narmada Valley Fertilizers & Chemicals Ltd. P.O. Narmada Nagar, Dist. Bharuch-392001 PAN : AAACG 8372 Q अपीलाथŎ/Appellant ŮȑथŎ /Respondent / सीओ- ऑɥेƃर / Co-objector आ.अ.सं./ITA No.721/SRT/2018 (AY 2014-15) Deputy Commissioner of Income-tax, Circle-1 Bharuch, 2 nd Floor, Harikunj Building, Above Bank of Baroda, Station Road, Bharuch-320001 Vs Gujarat Narmada Valley Fertilizers & Chemicals Ltd. P.O. Narmada Nagar, Dist. Bharuch-392015 PAN : AAACG 8372 Q अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Yogesh G Shah, A.R राजèव कȧ ओर से /Revenue by Shri H.P.Meena CIT-DR सुनवाई की तारीख/Date of hearing 13.09.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 31.10.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by Revenue and Cross Objection (CO) therein by assessee in ITA No. 720/SRT/2018 are directed ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 2 against the separate order of ld. Commissioner of Income-Tax (Appeals)-3, Vadodara [for short to as “Ld. CIT(A)”] all dated 31.08.2018 for assessment years (AYs) 2013-14 and 2014-15, which in turn arise out separate assessment orders passed by Assessing Officer dated 30.12.2016 and 29.12.2017 respectively. In both the appeals the Revenue has raised identical grounds of appeals. Facts in both the appeals are almost similar except figure of various additions or disallowances, thus, with the consent of parties both the appeals were clubbed, heard together and are decided by common order to avoid the conflicting decisions. For appreciation of fact the fact, facts in assessment year 2013-14 in ITA No. 720/SRT/2018 is treated as “lead” case. The Revenue has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting addition on account of disallowance of expenses on consumption and replacement of stores and spares of Rs.1,30,29,026/- treated as capital expenditure by the A.O. without appreciating the finding recorded in the assessment order. 2.On the facts and circumstances of the case and in law, the Ld. C.I.T.(A) erred in deleting addition on account of disallowance of ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 3 depreciation on goodwill of Rs.75,15,081/- without appreciating the factual finding recorded in the assessment order. 3.On the facts and circumstances of the case and in law, the CIT(A) erred in deleting the disallowance u/s 37(1) of the Act in respect of expenditure of Rs.17,13,60,400/- incurred by the assessee towards fulfilment of corporate social responsibility by way of contribution to State Govt. projects by holding that such consideration was made by the appellant not for doing charity but with sound business consideration which has helped in building brand image, without appreciating that the said expenditure incurred by the assessee had nothing to do with the business activities carried on by the ae and the assessee was neither in the business of providing finance to the State Govt. nor in the business of developing the State Government’s various projects. 4.On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance u/s 40(a)(ia) of the Act in respect of commission payment to dealers of Rs.5,52,29,537/- by holding that discount given to dealers is not in the nature of commission liable for deduction at source u/s 194H of the I.T. Act, without appreciating that the nature of services rendered by the dealers to the assessee company, reveal that the dealers had merely acted as commission agents, and the assessee company had made payment to dealers without deduction of tax at source. Consequently, the AO had correctly made disallowance u/s 40(a)(ia) of the Act by invoking the provisions of explanation to secretin 194H of the Act. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that market rate can also be considered as an arm’s length price without appreciating that market rate in relation to goods and services depends upon market forces whereas arm’s length price (ALP) has to be determined taking into account ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 4 prevalent laws and regulatory factors and therefore the factors that go into determination of market rate and ALP are quite different. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that appellant is eligible for claim of deduction of profits from transfer of steam under section 80IA without appreciating that the assessee had not made the said claim in its return of income and therefore the same cannot be allowed in view of ratio laid down by Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (284 ITR 323). 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the appellant is eligible for deduction of profits from transfer of steam under section 80IA and directing the AO to allow claim of deduction u/s 80IA in respect of profit from transfer of steam/power from C.P.S.U. after verification of calculation by relying on the decision of Hon'ble Gujarat High Court in the case of Mitesh Impex (Tax Appeal No.2562 of 2009), without appreciating that the decision of Hon'ble Gujarat High Court in the case of Mitesh Impex (supra) is distinguishable from the facts of the instant case, inasmuch in the case of Mitesh Impex (supra), the assessee, dropped the claim of deduction u/s 80IB and 8HHC of the Act in the revised return of income for the first time before C.I.T.(A), whereas in the instant case, the assessee neither made the claim of deduction u/s 80IA of the Act on profits from steam generation and used for captive consumption in manufacturing and the AO erred in rejecting revised claim filed by the appellant with regard to profit from transfer of electricity and steam by CPSU. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that there is no difference between power generated by the captive power plant and power supplied by the ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 5 State Electricity Board (SEB). Therefore, the open market rate of INR 6.32 i.e. yearly weighted average per 6.92 i.e. yearly weighted average per unit rate of electricity at which SEB supplied electricity for commercial use during A.Y 2012-13, as considered by the appellant is a fit Comparable Uncontrolable Price to benchmark the transaction of transfer of electricity from captive power plant to the manufacturing unit without appreciating that there is material difference between captive power plant as a seller and distribution / transmission entity. The difference are both in terms of functions performed as well as assets used. In the case of distribution and transmission entities, apart from assets used for generation of electricity, huge investment have gone in laying in transmission and distribution infrastructure. These investment and related transmission are totally missing in the CPP. 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the rate as charged by the S.E.B. be applied for determining the amount of claim by relying on the decision of Hon'ble ITAT in the case of Gujarat Fluorochemicals Ltd.(ITA No.805/Ahd/2017 and 2744/Ahd/2012), wherein the Hon'ble ITAT relied on the decision of Hon'ble Gujarat High Court in the case of Gujarat Alkalies and Chemicals Ltd.(2017) 395 ITR 247 (Gujarat) without appreciating that the facts of the case of Gujarat Alkalies & Chemicals Ltd. is distinguishable from the facts of instant case inasmuch in the case of Gujarat Alaklaies and Chemicals, the assessee had adopted the market rate of Rs.5.40/- per unit for power transferred by C.P.P i.e. the rate at which S.EB. supplied electricity, whereas the AO adopted the market rate of power at Rs.5.32/-- per unit by excluding the electricity duty levied by the S.E.B. for the purpose of deduction u/s 80IB of the Act, whereas in the instant case, the AO had made disallowance of deduction u/s ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 6 80IA by determining arm’s length price rate of power to the mean of two external CUP i.e.G.E.R.C and Indian Energy Exchange Ltd.” 2. Brief facts of the case are that assessee is a company setup by State of Gujarat, engaged in business of manufacturing, sale and trading of chemical fertilizers and chemical industrial products. The assessee filed its return of income for assessment year 2013-14 on 29.11.2013 declaring total income of Rs.3,11,17,03,830/-. Assessment was completed under section 143(3) r.w.s. 144C of the Act on 30.12.2016. In the assessment order the assessing officer made the following addition/ disallowances; Sr No. Nature of addition Amount 1 Disallowance of expenses for replacement of stores and spares by treating as capital expenses Rs. 1,30,29,026/- 2 Disallowance on depreciation on Goodwill Rs. 75,15,081/- 3 Disallowance under section 37(1) incurred on corporate social responsibility (though 50% was allowed under section 80G). Rs. 17,13,60,400/- 4 Disallowance under section 40(i)(ia) by treating the discount to dealers as commission payment. Rs. 5,52,29,537/- 5 Transfer pricing adjustment/ Disallowance under section 80IA(4) on account of profit for transfer of electricity by CPSU to manufacturing unit as not at Arm’s Length and not allowed deduction under section 80IA on profit from steam generation used for captive consumption. (para 8.10) ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 7 3. Before assessing officer the assessee raised additional claim of deduction of profit on transfer of steam under section 80IA(4). The assessing officer not admitted the claim of the assessee, on the ground as it was not claimed at the time of filing return of income. 4. Aggrieved by various addition/ disallowances in the assessment order, the assessee filed appeal before learned CIT(A). Before ld. CIT(A) the assessee filed detailed written submission on each and every disallowances as well as on additional claim raised before assessing officer for claiming deduction on profit on transfer of steam under section 80IA. The ld CIT(A) after considering the finding of assessing officer the assessment order on various addition and the submissions of the assessee deleted all the additions. The ld CIT(A) also admitted addition claim of the assess by following the decision of Jurisdictional High Court in Mitesh Impex in Tax Appeal No. 2562 of 2009. 5. Aggrieved by the order in deleting various additions/disallowances, the revenue has filed present appeal ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 8 before this Tribunal. The assessee has filed its Cross Objection (CO) and claimed deduction of education cess. 6. We have heard the submissions of learned Commissioner of Income tax- departmental representative (ld CIT-DR) for the revenue and the learned authorised representative (ld AR) for the assessee and have gone through the orders of the lower authorities carefully. At the outset of haring the ld AR for the assessee submits that he is not pressing the grounds raised in his CO, due to the recent amendment by way of Finance Bill 2022 in the Income Tax Act. Considering the submissions of ld AR for the assessee the CO No. 13/SRT/2021 filed by the assessee is dismissed. 7. Now adverting to the various grounds of appeal raised by the revenue. The ld AR for the assessee further submits that all the grounds of appeal raised by the revenue are covered in favour of assessee and against the revenue, either by the decision of Tribunal in assesses own case by the orders of Higher Court. The ld. AR for the assessee also filed a chart narrating various grounds of appeals and the references of various decisions by which the grounds of appeal are covered. ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 9 The ld CIT-DR for the revenue after going through the details in such chats would submit that he supports the order of assessing officer and Transfer Pricing Officer (TPO) on all the additions. 8. We have considered the rival contentions of both the parties and perused the record carefully. Ground No. 1 of the appeal relates to deletion of addition by the ld. CIT(A) made on account of disallowance of expenses on consumption and replacement of stores and spares of Rs. 1,30,29,026/-. The ld. CIT-DR for the revenue has vehemently supported the order of the Assessing Officer. 9. On the other hand, the ld. AR of the assessee has supported the order of ld. CIT(A) and submits that this ground of appeal is squarely covered by the decision of the Tribunal in assessees own case for the A.Y. 2012-13 in ITA No. 432/Srt/2018 order dated 22/08/2022, copy of which is filed. 10. We have considered the submissions of the parties. We find that the assessing officer treated the expenses incurred on replacement on spares and parts of machinery as capital expenses being enduring in nature. The ld CIT(A) granted relief ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 10 to the assessee by taking view that replacement of part of machinery have not enhanced the capacity of existing facility. The ld. CIT(A) also held that in assessee’s own case for A.Y. 2003-04 to 2005-06 and again in A.Y. 2007-08 to 2011-12, similar replacement expenses were allowed as revenue expenditure. Before us, the AR of the assessee vehemently relied on the decision of Tribunal in A.Y. 2012-13 in ITA No. 432/Srt/2018 dated 22/08/2022, wherein this combination has passed the following order: “19. We have considered the submissions of both the parties and have gone through the orders of the lower authority. We have also seen the orders of the Tribunal and High Court in various years and recorded above. We find that during assessment the assessing officer noted that the assessee has claimed expenses of Rs. 5.246 Crore on account of replacement of certain parts of the machineries. The assessing officer held that on replacement of such parts the assessee will get long term benefit which is enduring in nature and the expenses are not in the nature of current repairs. The assessing officer allowed depreciation at different rate on different part and worked out total depreciation of Rs. 1.657 Crore and remaining of Rs. 3.588 Crore was disallowed. We find that before ld CIT(A) the assessee mad similar submissions as made before us and relied on various case laws. The ld CIT(A) after considering the ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 11 submissions of the assessee held that the assessee has replaced the exiting part of machine or replaced the parts which have become obsolete and the replacement was essential. It was held that the replacement has not increased the existing capacity, so entire expenditure was treated as revenue expenditure. We find that on similar disallowance the assessee was allowed relief by Tribunal and granted relief to the assessee in AY 2003-04 to 2005-06, 2008-09 to 2011-12. The revenue filed appeal before High Court against the order of Tribunal in AY 2003-04 to 2005-06, 2008-09 to 2011-12, which has been dismissed. Further, the assessing officer himself allowed similar relief to the assessee from AY 2017-18 onwards. Hence, we find that ground of appeal is squarely covered in favour of assessee and against the Revenue. Thus, following the principal of consistency we affirm the order of Ld. CIT(A). In the result, this ground of appeal is dismissed.” 11. Considering the decision of Tribunal in assessees own case for A.Y. 2012-13 and in earlier years as recorded above and by following the principle of consistency, we do not find merit in the grounds of appeal raised by the revenue and we affirm the order passed by the ld. CIT(A). In the result, this ground of appeal is dismissed. 12. Ground No. 2 of the appeal relates to deleting addition/ disallowance of depreciation on goodwill of Rs. 75,15,081/-. ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 12 The ld. CIT-DR for the revenue has vehemently supported the order of the Assessing Officer. 13. On the other hand, the ld. AR of the assessee has supported the order of ld. CIT(A) and submits that this ground of appeal is also covered by the decision of this Tribunal in assessees own case for the A.Y. 2007-08 and 2012-13 in ITA No. 431 & 432/Srt/2018 order dated 22/08/2022. 14. We have considered the submissions of both the parties and find that on similar issue, by this combination in assessees own case for the A.Y. 2007-08 and 2012-13 in ITA No. 431 & 432/Srt/2018 order dated 22/08/2022, we have the following: “12. We have considered the rival submission of both the parties and perused the order of authorities below carefully. We have also seen the order of Hon’ble High Court of Gujarat in Company Petition No. 148 of 2006 dated 09.01.2007 in approving the scheme of amalgamation of Narmada Chematur Petrochemical Limited (NCPL) with assessee. We find that Assessing Officer made the disallowance of depreciation of goodwill by taking view that that claim of depreciation of goodwill was not made in the return of income, it was made by way of additional ground of appeal for the first time before the Tribunal. The assessee has made entry of 6,955 lakhs for ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 13 investment cancelled in its books of accounts. The assessee was a promoter of amalgamated company and investment of Rs. 6955 lakhs share of amalgamated company during the merger was reduced as investment extinguished. The assessing officer held that on examination of calculation, it was seen that assets were shown at Rs.50,625.86 lakhs and liabilities were shown at Rs.52,314.86 lakhs and difference of Rs.1699.99 lakhs were treated as goodwill. The goodwill has arisen because of cancellation of investment made in the merged company is not an asset on which depreciation is allowable. The assessee should have been allotted shares of itself, in proportion of shares holding in merged entity, in proportion of shareholding in merged company as has been done for other shareholders of merged company. These shares so allotted could have been kept by the assessee as treasury stock which could have been sold off in proportion by the assessee whenever deemed fit. The Assessing Officer held that no goodwill has been created on account of merger of amalgamated company rather it is resulted in amalgamation result of Rs.5266 lakh. As recorded above before ld CIT(A) the assessee filed detailed written submissions. We find that the ld CIT(A) granted relief to the assessee by taking view that his predecessor in assessee own case in assessment years 2009- 10, 2010-11 and 2011-12 has allowed depreciation. The Ld. CIT(A) further held that assessee has paid a consideration of Rs.7849.25 lakhs consisting of Rs.6,955 lakhs against shares of its own and remaining amount of Rs.894.25 against the share of other shareholders. The assessee has passed entry ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 14 in its books of account on amalgamation, investment of Rs. 6,955 lakhs shown in “assets side” and equity of Rs.6,955 shown in “capital side” have been cancelled against each other, which was approved by Hon'ble jurisdictional High Court in a scheme of amalgamation. If the investment was not cancelled by the assessee-company, on “asset side” investment would have been higher by Rs. 6,955 lakhs and on “liability side”, capital would have been higher by same amount, Under the present situation, the goodwill amount would have been the same. The cancellation of investment has nothing to do with goodwill and amalgamation reserve as presumed by the Assessing Officer. 13. The Ld. CIT(A) on his consideration held that Assessing Officer has made remarks on this issue merely on assumption and without considering the detail written submission made by assessee on the scheme of amalgamation approved by the Hon'ble jurisdictional High Court and the effect of the same was given in the books of account of the assessee in accordance with the direction of Hon'ble jurisdictional High Court. We also find that Hon'ble jurisdictional High Court in para-9(vii) of its order approving the scheme made observation; “Upon sanction of the scheme, the shares held by the transferee company in the transferor company shall get cancelled and no new shares shall be issued by the transferee company against such shares”. 14. The Ld. CIT(A) further held that the issue of depreciation on goodwill no more res integra after the decision of Hon'ble Supreme Court in the case of Smifs Securities Ltd. (supra), ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 15 wherein it has been held that goodwill is an asset within the meaning of Section 32 of the Act and depreciation on goodwill is allowable. We find that Hon'ble Delhi High Court in the case of Triune Energy Services (P.) Ltd. vs. DCIT [2016] taxmann.com 288 (Del), wherein it was held that goodwill is an intangible asset providing a competitive advantage to an entity, this includes a strong brand, reputation, a cohesive human resources, dealer network, customer base etc. the Hon’ble Gujarat High Court in PCIT Vs Zydus Wellness Ltd (supra) also held that the assessee company is entitled to claim depreciation on goodwill expanded at the time of amalgamation of companies. The order of High Court in Zydus wellness Ltd (supra) was upheld by Hon’ble Apex Court by following the decision in CIT Vs Smifs Securities Limited (supra). Similar view was taken by Ahmedabad Tribunal in Urmin Marketing (P) Limited (supra), Mumbai Tribunal in Banc Tec TPS India (P) Limited Vs ACIT (supra). So far as objection of ld CIT-DR for the revenue that due to the amendment in section 32, the goodwill is no more depreciable asset, we are of the view that the amendment brought in the Act by way of Finance Act 2021 will be applicable prospectively and not in the year under consideration. In view of the aforesaid factual and legal discussion, we do not find any legality in finding of Ld. CIT(A), which we affirm. In the result, the grounds of appeal raised by the revenue are rejected.” 15. Considering the decision of Tribunal in assessees own case for A.Y. 2007-08 and 2012-13 and by following the principle of ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 16 consistency, we do not find merit in the grounds of appeal raised by the revenue, hence, we affirm the order passed by the ld. CIT(A). In the result, this ground of appeal is dismissed. 16. Ground No. 3 of the appeal relates to deleting disallowance under Section 37(1) of expenditure of Rs. 17,13,60,400/- incurred by assessee towards fulfilment of corporate social responsibility. The ld. CIT-DR for the revenue has vehemently supported the order of the Assessing Officer. The ld CIT-DR for the revenue submits that the assessee has not incurred such expenses for the purpose of business. 17. On the other hand, the ld. AR of the assessee has supported the order of ld. CIT(A) and submits that the assessee is set up by State Government and has to mandatorily contribute for certain project of social upliftment. It was incurred for commercial expediency and eligible for deduction under section 37 of the Act. The ld AR for the assessee submits that similar social corporate responsibility expenses were also allowed by the decision of this Tribunal in assessees own ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 17 case for the A.Y. 2012-13 in ITA No. 432/Srt/2018 order dated 22/08/2022. 18. We have considered the submissions of both the parties and have gone through the orders of lower authorities. We find that the assessing officer disallowed the expenses by taking view that payments was not made for the purpose of business. However, the assessing officer held that such payment was made to approved institution and allowed 50% of the amount under section 80G. The ld CIT(A) allowed relief to the assessee by taking view that such contribution was not for doing any charity but for sound business consideration and in building brand image of assessee. We find that nature of expenses is not in dispute. Further it is not in dispute that the assessee was setup by State Government and incurring similar expenses in earlier years. We find that similar issue has been decided by this combination in assessees own case for the A.Y. 2012-13 in ITA No. 432/Srt/2018 order dated 22/08/2022 wherein following order has been passed: “27. We have considered the submissions of both the parties and have gone through the orders of the lower authority. We have ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 18 also deliberated on the various case laws relied by the ld AR for the assessee. We find that during the course of assessment proceedings the assessing officer noted that the assessee-company has incurred expenditure of Rs.35,68,134/- in fulfilment of social corporate responsibility and claimed the same as deduction under section 37(1) of the Act. The assessing officer issued show cause notice to the assessee to justify the claim. The assessee filed very detailed reply as recorded in para 8.1 at page number 41 to 46 of the assessment order. The Assessing Officer has not accepted the reply of the assessee and held that such expenditure would not be allowable under section 37(1) of the Act if it is incurred wholly and exclusively for the purpose of assessees business. The assessee-company was not able to prove how exactly these contributions are helpful either in promotion of its future business activities or directly connected with business activities in the year under consideration. The Assessing Officer disallowed the claim of such deduction under section 37(1) of the Act and added back to the total income of the assessee in the computation of total income. Aggrieved the assessee filed the appeal before Ld. CIT(A). Before Ld. CIT(A) the assessee stated that corporate social responsibility (CSR) as a joint sector larger scale industry in the state of Gujarat, makes contribution in the ordinary course of its business towards socially useful activities which help in the development particularly of the Bharuch District in which the assessee-company has its manufacturing facilities as also to earn goodwill from people at large and which help assessee- ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 19 company in running its business smoothly. It is decided by the assessee-company to undertake various activities as a part of its social commitment in and around Bharuch District in particular as also in the state of Gujarat. It is also decided that the thrust areas under CSR policy of the assessee- company will be education providing quality education as also establishing centres for training and skill development, agriculture extension services providing easy access to farm- input, market access to produce, upgradation of farm skills; and socio-economic development of Bharuch Town in particular and district in general. The CSR is a concept whereby assessee-company integrate social and environmental concerns in their business operations and in their inter-action with their stakeholders on a voluntary basis. The emphasis is that business have to endeavour to become responsible actors in society so that their every action leads to sustainable growth and economic development. The CSR is no longer charity or philanthropy instead it should be imbibed in the corporate culture that leads to responsible business. The assessee stated that the CSR contribution has helped in building brand image of the company and publicity among the agrarian community. The activities implemented in the rural areas are publicized on account of large scale so message reaches to the masses. To ensure that the assessee-company gets better publicity, representatives from its team participates in every event like designing the programme, discussion with sarpanch & gram Sabha, Bhoomi Pooja, concurrent monitoring & evaluation, inauguration event, etc., for the said project. To ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 20 get wider acceptability, the assessee also installs inaugural stone, boards, banners, etc. wherever and whenever applicable and said project implemented by assessee helps to build a good rapport among the villagers and the agrarian masses. The assessee relied on the judgment of Hon'ble jurisdictional High Court in assessees own case for assessment years 1996-97 to 1997-98 in Appeal No.78 of 2008, wherein the Hon'ble jurisdictional High Court relied on the judgment of Hon'ble Supreme Court in the case of Sri Venkata Satyanarayana Rice Mill Contractors Co. vs. CIT (1996) 223 ITR 101 (SC) and allowed the contribution given to NGO as deduction. 28. The Ld. CIT(A) after considering the submissions of the assessee accepted the claim and held that Explanation-2 inserted to section 37 (1) is prospective in nature as the same has been brought in the Act with reference to section 135 of Companies Act. We find that similar disallowance was made in AY 2009-10 and on appeal before Tribunal the disallowance was deleted and on further appeal by revenue before High Court, the order of the Tribunal was upheld in Tax Appeal No. 146 of 2019. Thus, respectfully following the order of High Court, we affirm the order of ld CIT(A) with additional observation. In the result, this ground of appeal is also dismissed.” 19. Considering the decision of Tribunal in assessees own case for A.Y. 2012-13 and by following the principle of consistency, we do not find merit in the grounds of appeal raised by the ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 21 revenue, hence, we affirm the order passed by the ld. CIT(A). In the result, this ground of appeal is dismissed. 20. Ground No. 4 of the appeal relates to deletion of disallowance by the ld. CIT(A) made under Section 40(1)(ia) of the Act in respect of commission payment to dealers of Rs. 5,52,29,537/-. The ld. CIT-DR for the revenue has vehemently supported the order of the Assessing Officer. The discount allowed to the dealers are nothing but commissions payment which attracts TDS. 21. On the other hand, the ld AR for the assessee submits that discount allowed by the assessee to its dealers are not commission, but type of incentive for getting the timely payment. Transaction with dealers was won principal to principal basis. The ld. AR of the assessee submits that the issue under consideration is also covered by the decision of this Tribunal in assessees own case for the A.Y. 2012-13 in ITA No. 432/Srt/2018 order dated 22/08/2022. 22. We have considered the submissions of both the parties and have seen the orders of the lower authorities. On comparisons of the facts, with the facts of earlier years, we ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 22 find that on similar grounds of appeal in assessees own case for the A.Y. 2012-13 in ITA No. 432/Srt/2018 order dated 22/08/2022, this bench has passed following order: “22. We have considered the submissions of both the parties and have gone through the orders of the lower authority. We have also seen the orders of the Tribunal and High Court in various years and recorded above. We find that during the assessment the assessing officer noted that no TDS is made on the discount of Rs. 4.697 crore made to dealers. The assessing officer held that dealers are acting as agent of the assessee and like commission agent. The so-called dealers have rendered services in the course of buying and selling of goods and such services falls within the definition of commissions or brokerage and was liable to deduction under section 194H. We find that before ld CIT(A) the assessee filed detailed written submissions and relied on various case laws. The ld CIT(A) after considering the submissions of the assessee held that the issue is covered by the decision of his predecessor for AY 2009-10, 2010-11 & 2011-12 and following the same the assessee was allowed relief. We find that order of ld CIT(A) in earlier years has been affirmed by Tribunal and further appeal before High Court has already been dismissed. Hence, we do not find any infirmity in the order of ld CIT(A), which we affirm. In view of the aforesaid legal position, we do not find any merit in the ground raised by the revenue.” ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 23 23. Considering the decision of Tribunal in assessees own case for A.Y. 2012-13, wherein we have followed the orders of earlier years as noted therein, and by following the principle of consistency, we do not find merit in the grounds of appeal raised by the revenue, hence, we affirm the order passed by the ld. CIT(A). In the result, this ground of appeal is dismissed. 24. Ground No. 5 to 9 relate to Transfer Pricing adjustment, which include transfer of power from co-generation power plant, transfer of steam eligible for profit under section 80IA. 25. Brief facts relating to those grounds of appeal are that assessee has 33 Megawatt co-generation power plant and steam unit for generating electricity for its internal power requirement, which is eligible for deduction of 100% profit and gain derived from eligible business under section 80IA. In the computation of income, the assessee claimed deduction of Rs.91.42 crore under section 80IA(4) (Rs.21.55 Crore from wind mill and Rs. 69.86 Crore from CPSU). The assessee while preparing its report in Form-10CCB, under section 92E related to specified domestic transfer, considered the early average unit electricity rate charged by Electricity Company of ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 24 State Government i.e. Dakshin Gujarat Vij Company Ltd. (DGVCL) as rate to the transfer electricity to its manufacturing unit. The assessee also claimed deduction in respect of its profit generated from transfer of its steam to manufacturing units, as steam is also a form of power. The same rate as charged by DGVCL was considered to transfer steam to manufacturing unit and revised claim of Rs.129.83 crores was claimed under section 80IA before Assessing Officer. As the transaction falls within the scope of specified domestic transaction (SDT). The reference was made to Transfer Pricing Officer (TPO) for benchmarking of transaction. The TPO disregarded the analysis undertaken by assessee and applied the rate of electricity transfer to its manufacturing unit and used to average rates, (i) average of tariff rate by Gujarat Electricity Regulating Commission and (ii) the yearly average rate from Indian Energy Exchange by applying most appropriate method as CUP method. The TPO/assessing officer allowed the profit from windmill of Rs. 21.55 Crore and claim under section 80IA of Rs. 69.83 Crore from CPSU was reduced to nil. The revised claim of assessee was not accepted ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 25 by Assessing Officer by referring the decision of Hon’ble Apex Court in the case of Goetze (India) Limited 284 ITR 323 (SC), by taking view that additional claim was raised by way of letter (application) and the same was not claimed in return of income. The Assessing Officer referred the order of TPO dated 26.10.2016 wherein the claim of deduction under section 80IA of CPSU of Rs.69.86 crores was reduced to nil and profit from Wind Mill of Rs.21.55 crores was allowed. 26. Aggrieved by the additions / adjustments the assessee filed before the Ld. CIT(A). Before Ld. CIT(A) the assessee filed various detailed written submissions dated 26.03.2018, 18.07.2018 and 22.-08.2018. The submission of assessee is extracted by Ld. CIT(A) in para-8.5 of his order. 27. On the market rate of Arm’s Length Price for transfer of power from Power Plant CPSU to its manufacturing units, the assessee is stated that they adopted CUP as most appropriate method. The assessee considered open market rate at Rs.6.92 yearly waited for average units price of electricity for AY 2013- 14, at which rate State Electricity Board (SEB) supplied electricity for commercial use to the manufacturing units. The ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 26 market rate can be considered as Arm’s Length price because market rate is a price agree between two unrelated parties dealing as independent as buyer and seller, without any influence of relationship. The market rate is the instantaneous available rate of an identical commodity and its service and is most appropriate Arm’s Length price, when CUP method as most appropriate method as a transaction. To support such submission, the assessee relied on the decision of Hon’ble jurisdictional High Court in the case of Gujarat Alkalies Ltd. 395 ITR 247 (Guj) wherein it was held that in adopting market rate charged by State Electricity Board (SEB), as Arm’s Length price. It was also submitted that power generated by CPSU is fed into main receiving station (MRS), where it is fused with power supplied by DISCOM and then supplied to manufacturing units. Once power is fed into MRS, it becomes indistinguishable as a source of generation. It also became insignificant to determine whether the end product was produced by performing “x” number of functions or “+x” number of functions, what ultimately matter is the similarity of end product with other end-product having same utility ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 27 valid. CUP method focuses on product comparability. Functional comparability is to overlook when there is identical product or service available in the market. On such basis, the assessee claim that price charges by SEB, is Arm’s Length price and the entire exercise by TPO of distinguishing function and rejecting CUP selected by assessee was futile. The assessee further claimed that steam generated by CPSU is also eligible for deduction under section 80IA, as steam is also form of power. The assessee during the assessment, vide application dated 25.10.2016 submitted its claim under section 80IA in respect of profit derived from generation of stem which was captively consumed in manufacturing operation. The Assessing Officer rejected the claim by referring the decision of Hon’ble Apex Court in the case of Goetze (India) Limited (Supra), on the ground that claim was not made the return of income, hence, cannot be considered. The assessee submitted that they had claimed deduction on captive power plant in the e-filing return of income and claim was only modified during the assessment proceedings. Technically it is not additional claim and the decision of Hon’ble Apex Court in ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 28 the case of Goetze Indi Ltd. (supra) is not applicable and to support its contentions, the assessee relied on the decision of Hon’ble jurisdictional High Court in the case of Mitesh Impex (TA No.2562 of 2009) (supra). The assessee also relied in the case of CIT vs. Shah Alloys Ltd. In TA No. 2093 of 2010 and Pragati Glass Private Limited in Tax Appeal No.1646 of 2010. 28. The Ld. CIT(A) after considering the submission of assessee in referring and relying upon decision of Hon’ble jurisdictional High Court in the case of Mitesh Impex (supra) held that claim can be made even at the appellate stage and admitted the additional claim raised before the Assessing Officer vide application dated 25.10.2016 and directed to examine the same on merits. 29. On the issue of Arm’s Length price that market rate can be considered as Arm’s Length price on the basis of price agreed between two unrelated parties dealing as independent buyer and seller without any influence of any relationship. The Ld. CIT(A) held that the ratio of decisions of Hon’ble jurisdictional High Court in the case of Gujarat Alkalies & Chemicals Ltd.(supra) is squarely applicable on the issue of section ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 29 80IA(8) wherein it was held that rate charged by SEB supplied to its consumers at the same rate. Therefore, the market rate of electricity supplied by CPP units to its general units, it would not make difference if the rate charged by SEB comprises of electricity duty because looking from the prospective of consumers, the consumers would be paid full rate inclusive of duty and therefore it is irrelevant to consider various components of rates. The Ld. CIT(A) by referring the decisions of Tribunal in the case of DCIT vs. Deepak Fertilizers & Petro Chemicals Corporation Ltd. in ITA No.2116/Mum/ 2014 wherein it was held that stem is also a form of power eligible for deduction under section 80IA(4). On the basis of aforesaid observation, the Ld. CIT(A) directed to delete the adjustments made by the Assessing Officer and further held that assessee is eligible for deduction of profit from transfer of stem under section 80IA as charged by the SEB be applied for determining the amount of claim. Aggrieved by the order of Ld. CIT(A) the Revenue has filed appeal before the Tribunal. 30. We have heard the submission of Ld. CIT-DR for the Revenue and the AR of the assessee. The Ld. CIT-DR fully supported ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 30 the order of Assessing Office and prayed to set aside the order of ld. CIT(A) and to restore the order of Assessing Officer. 31. On the other hand, Ld. AR for the assessee submits that market rate charged by SEB to its consumers is also Arm’s Length price because it is price agreed between two unrelated parties dealing as independent buyer and seller, without influence of relationship. Market rate is the instantaneous available rate of an identical commodity or services and is most appropriate Arm’s Length price when CUP method is being used, when end-produce with other end product having same utility value, is of utmost importance in CUP. To support his submission, the ld.AR for the assessee is relied on the decision of Hon’ble jurisdictional High Court in the case of Gujarat Alkalies & Chemicals Ltd.(supra), Gujrat State Fertilizers and Chemicals Ltd.in ITA No.319 & 339/AHD/2012, Balaramapur Chini Mills Ltd. ITA No.1672/Kol/2019 dated 05.05.2021, in the case of DCM Sri Ram Ltd. [TS 1009-ITAT-2021(Del)]. 32. On the issue that steam is a form of power and eligible for deduction, the Ld. AR for the assessee relied on the decision of ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 31 Hon’ble jurisdictional High Court in the case of Jay Chemicals Ltd. 120 taxmann.com 315, DCIT vs. Deepak Fertilizer and Petro Chemicals Corporation (supra) and decision of Hon’ble Apex Court in the case of CIT vs. Tanfac Industries Ltd. SLP (C) No.18537 of 2009, DCIT vs. Vishal Fabrics Ltd. (2022) 139 taxmann.com 30 (AHD-Tribunal.) Star Paper Mills vs. DCIT (2022) 134 taxmann.com 177 (Kol-Trib.) Hon’ble Bombay High Court in the case of CIT vs. Reliance Industries (2019)102 taxmnn.com 372 (Bom). 33. We have considered the rival submissions of both the parties and have gone the orders of lower authorities carefully and the case laws cited by the parties. During the assessment the assesse raised additional claim that the steam generated by CPSU in also eligible for deduction under section 80IA. The claim of the assessee was not accepted/ considered by assessing officer by taking view that no such claim is made in the return of income and in absence of any claim in return of income such additional claim cannot be raised during assessment. To support his view, the assessing officer relied on the decision of Apex Court in Goetze (India) Limited (supra). ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 32 We find that before ld CIT(A) the assessee claimed that no new claim was raised before assessing officer rather they only modified its claim during the assessment proceedings. Technically it is not additional claim and the decision of Hon’ble Apex Court in the case of Goetze Indi Ltd. (supra) is not applicable and to support its contentions, the assessee relied on the decision of Hon’ble jurisdictional High Court in the case of Mitesh Impex (supra). We find that the ld CIT(A) by following the decision of Jurisdictional High Court in Mitesh Impex (supra) admitted the revised/ additional claim and directed the assessing officer to examine the claim and allow the same. We find that on similar issue the Jurisdictional High Court in Jay Chemical Limited (supra) held that steam produced by the assessee can be termed as power and would be qualified for the benefit of deduction under section 80IA(4). Thus, keeping in view the afforesaid factual and legal position, we do not find any infirmity in the order of ld CIT(A), which we affirmed. Consequently, the corresponding ground of appeal is dismissed. ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 33 34. Now turning to the other issues of SDT on transfer of power from captive power plant to manufacturing unit. As noted above the TPO while disregarded the analysis undertaken by assessee and applied the rate of electricity transfer to its manufacturing unit and used to average rates, (i) average of tariff rate by Gujarat Electricity Regulating Commission and (ii) the yearly average rate from Indian Energy Exchange by applying most appropriate method as CUP method. The TPO/assessing officer allowed the profit from windmill of Rs. 21.55 Crore and claim under section 80IA of Rs. 69.83 Crore from CPSU was reduced to nil. Before ld CIT(A) the assessee filed detailed written submission, which we have noted in detail in earlier paras of this order, which are not repeated here for the sake of brevity. The ld CIT(A) after considering the submissions of the assessee and following the decision of Jurisdictional High Court in Gujarat Alkalies and Chemical Limited (supra), while following decisions in Shah Alloys Limited (supra) and in Pragati Glass Works Limited (supra) held that Profits and gains from infrastructure undertakings, deduction under section 80-IA(4) was allowable to assessee for ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 34 generation of power for captive consumption and same was to be computed considering rate of power on which Electricity Board supplied power to its consumer. We further find that similar view was taken by Bombay High Court in CIT Vs Reliance Limited (supra) also held that where assessee had set up a captive power generating unit and provided electricity to its another unit and claimed deduction under section 80-IA in respect of profits arising out of such activity, valuation of electricity provided to another unit should be at rate at which electricity distribution companies were allowed to supply electricity to consumers. Thus, in view of the afforesaid factual and legal position, we do not find any infirmity in the order passed by ld CIT(A), which we affirm. Resultantly, the corresponding grounds of appeal raised by revenue are dismissed. 35. In the result, the appeal of the Revenue is dismissed. ITA No. 721/Srt/2018 by revenue for AY 2014-15. 36. The revenue has raised following grounds of appeal, “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting addition on account of disallowance of ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 35 expenses on consumption and replacement of stores and spares of Rs.2,51,56,553/- treated as capital expenditure by the A.O. without appreciating the finding recorded in the assessment order. 2. On the facts and circumstances of the case and in law, the Ld. C.I.T.(A) erred in deleting addition on account of disallowance of depreciation on goodwill of Rs.56,36,311/- without appreciating the factual finding recorded in the assessment order. 3. On the facts and circumstances of the case and in law, the CIT(A) erred in deleting the disallowance u/s 37(1) of the Act in respect of expenditure of Rs.1,26,56,804/- incurred by the assessee towards fulfilment of corporate social responsibility by way of contribution to State Govt. projects by holding that such consideration was made by the appellant not for doing charity but with sound business consideration which has helped in building brand image, without appreciating that the said expenditure incurred by the assessee had nothing to do with the business activities carried on by the ae and the assessee was neither in the business of providing finance to the State Govt. nor in the business of developing the State Government’s various projects. 4.On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance u/s 40(a)(ia) of the Act in respect of commission payment to dealers of Rs.6,64,20,591/-- by holding that discount given to dealers is not in the nature of commission liable for deduction at source u/s 194H of the I.T. Act, without appreciating that the nature of services rendered by the dealers to the assessee company, reveal that the dealers had merely acted as commission agents, and the assessee company had made payment to dealers without deduction of tax at source. ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 36 Consequently, the AO had correctly made disallowance u/s 40(a)(ia) of the Act by invoking the provisions of explanation to secretin 194H of the Act. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that market rate can also be considered as an arm’s length price without appreciating that market rate in relation to goods and services depends upon market forces whereas arm’s length price (ALP) has to be determined taking into account prevalent laws and regulatory factors and therefore the factors that go into determination of market rate and ALP are quite different. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that appellant is eligible for claim of deduction of profits from transfer of steam under section 80IA without appreciating that the assessee had not made the said claim in its return of income and therefore the same cannot be allowed in view of ratio laid down by Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT (284 ITR 323). 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the appellant is eligible for deduction of profits from transfer of steam under section 80IA and directing the AO to allow claim of deduction u/s 80IA in respect of profit from transfer of steam/power from C.P.S.U. after verification of calculation by relying on the decision of Hon'ble Gujarat High Court in the case of Mitesh Impex (Tax Appeal No.2562 of 2009), without appreciating that the decision of Hon'ble Gujarat High Court in the case of Mitesh Impex (supra) is distinguishable from the facts of the instant case, inasmuch in the case of Mitesh Impex (supra), the assessee, dropped the claim of deduction u/s 80IB and 8HHC of ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 37 the Act in the revised return of income for the first time before C.I.T.(A), whereas in the instant case, the assessee neither made the claim of deduction u/s 80IA of the Act on profits from steam generation and used for captive consumption in manufacturing and the AO erred in rejecting revised claim filed by the appellant with regard to profit from transfer of electricity and steam by CPSU. 8. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that there is no difference between power generated by the captive power plant and power supplied by the State Electricity Board (SEB). Therefore, the open market rate of INR 6.32 i.e. yearly weighted average per 6.92 i.e. yearly weighted average per unit rate of electricity at which SEB supplied electricity for commercial use during A.Y 2012-13, as considered by the appellant is a fit Comparable Uncontrolable Price to benchmark the transaction of transfer of electricity from captive power plant to the manufacturing unit without appreciating that there is material difference between captive power plant as a seller and distribution / transmission entity. The difference are both in terms of functions performed as well as assets used. In the case of distribution and transmission entities, apart from assets used for generation of electricity, huge investment have gone in laying in transmission and distribution infrastructure. These investment and related transmission are totally missing in the CPP. 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the rate as charged by the S.E.B. be applied for determining the amount of claim by relying on the decision of Hon'ble ITAT in the case of Gujarat Fluorochemicals Ltd.(ITA No.805/Ahd/2017 and 2744/Ahd/2012), wherein the Hon'ble ITAT relied on the decision of Hon'ble Gujarat High Court in ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 38 the case of Gujarat Alkalies and Chemicals Ltd.(2017) 395 ITR 247 (Gujarat) without appreciating that the facts of the case of Gujarat Alkalies & Chemicals Ltd. is distinguishable from the facts of instant case inasmuch in the case of Gujarat Alaklaies and Chemicals, the assessee had adopted the market rate of Rs.5.40/- per unit for power transferred by C.P.P i.e. the rate at which S.EB. supplied electricity, whereas the AO adopted the market rate of power at Rs.5.32/-- per unit by excluding the electricity duty levied by the S.E.B. for the purpose of deduction u/s 80IB of the Act, whereas in the instant case, the AO had made disallowance of deduction u/s 80IA by determining arm’s length price rate of power to the mean of two external CUP i.e.G.E.R.C and Indian Energy Exchange Ltd.” 37. On comparisons of grounds of appeal, we find that the revenue has raised similar grounds of appeals as raised in appeal for AY 2013-14, which we have dismissed after detail discussions on facts and legal view taken by Jurisdictional High Court, thus, following the principles of consistency, the appeal of revenue for AY 2014-15 is also dismissed with similar observation. 38. In the result, the appeal of revenue for AY 2014-15 is also dismissed. 39. In combined result, both the appeal of the Revenue is dismissed and assessees CO in AY 2013-14 is dismissed as ITA No.720-721/SRT/2018 & CO 13/SRT/2021 (A.Ys. 13-14 & 14-15) M/s Gujarat Narmada Valley Fertilizers & Chemicals Ltd. 39 not pressed. A copy of the instant common order be placed in the respective case file(s). Order pronounced in the open Court on 31/10/2022 and the result was also placed on the Notice Board. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद᭭य/ACCOUNTANT MEMBER] [᭠याियक सद᭭य JUDICIAL MEMBER] Surat, Dated: 3110/2022 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order Sr.P.S./Assistant Registrar, ITAT, Surat