PRAMOD LAKRA, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(1), KOLKATA, KOLKATA V. BALRAMPUR CHINI MILLS LTD , KOLKATA

ITA 1081/KOL/2025

AI Insights

The case involves multiple appeals by the Revenue against Balrampur Chini Mills Ltd. concerning the arm's length pricing of captive power transfers to associated enterprises and the disallowance of deductions under Section 80G of the Income Tax Act for CSR expenditures. The Tribunal consolidated the appeals due to the similarity in issues across the assessment years. The primary legal contention revolved around the appropriate pricing for captive power and the eligibility of CSR expenditures for deductions under Section 80G. The Tribunal referenced the Supreme Court's decision in CIT vs. Jindal Steel & Power Limited and previous ITAT decisions favoring the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772377 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2020-2021
• Other Referred Cases: CIT v. Jindal Steel & Power Limited, Deputy Commissioner of Income Tax vs. M/s. The Peerless General Finance & Investment & Co. Ltd., JMS Mining (P.) Ltd. v. Pr. CIT, Acme Chem Ltd. v. DCIT, Goldman Sachs Services Pvt. ltd. Vs. JCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN KISHORE
• Assessee Lawyers: S. K. TULSIYAN; LATA GOYAL; ARS
• Keywords: Transfer pricing; Retrospective amendment; Earning of tax free income; Charitable institution
• Section: 37; 14A; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA Nos.1079 to 1082/KOL/2025 (Assessment Year:2017-18, 2018-19, 2020-21 & 2021-22) DCIT, Circle 11(1) Aaykar Bhavan, 6 th Floor, P-7, Chowringhee Square, Kolkata-700069, West Bengal Vs. Balrampur Chini Mills Ltd. FMC Fortuna, 2nd Floor, 234/3A, AJC Bose Road, Minto Park, Kolkata-700020 West Bengal (Appellant) (Respondent) PAN No. AAACB9373Q Assessee by : Shri S.K. Tulsiyan, & Ms. Lata Goyal, Ars Revenue by : Shri Praveen Kishore, DR Date of hearing: 23.07.2025 Date of pronouncement: 26.08.2025 O R D E R Per Rajesh Kumar, AM: These are appeals preferred by the Revenue against the orders of the CIT (A), Kolkata-22 (hereinafter referred to as the “Ld. CIT(A)”]even dated 24.12.2024 for the AYs2017-18, 2018-19, 2020- 21, 2021-22. 02. At the outset we note that the appeals of the Revenue are time barred by 81 days. Considering the facts and circumstances of the case, we find that there is plausible and bonafide reasons to condone the delay and the delay of filing the appeals is hereby condoned. 03. The facts and circumstances in these appeals are identical, hence, for the sake of convenience and brevity, these are decided and disposed Printed from counselvise.com Page | 2 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 of together. First of all we will take ITA no. 1079/KOL/2025 A.Y. 2017- 18 as lead case and facts are discussed in the following paragraphs. ITA no. 1079/KOL/2025 A.Y. 2017-18 04. The issue raised by the revenue in ground no. 1 is against the order of ld. CIT deleting the adjustment made by the AO/TPO amounting 44,83,27,538/- in respect of transfer of captive power to its Associated Enterprises (AEs) while the other grounds no. 2 to 13 are in support of ground no.1. 05. The facts in brief are that the assessee is engaged in the business of manufacturing and sale of Sugar, Molasses, Industrial Alcohol, Ethanol, Organic Manure and Generation & Distribution of Power in the form of steam and electricity. The electricity so generated is partly consumed in the sugar/ distillery plants and partly sold to the State Electricity Board (SEB)/ UPPCL. The assessee is having specified domestic transactions pertaining to the transfer of power to its own undertaking and therefore, case of the assessee was referred to Transfer Pricing Officer (TPO) for determination of the arm's length price of the specified domestic transactions of sale of captive power. The learned TPO passed an order under Section 92CA(3) making adjustment on account of transfer of power to its own undertaking that is captively consumed by other undertakings of the assessee company on the basis of rate charged by generating companies for supply of power to the distribution company. During the instant assessment year, the captive consumption of power was 14,04,31,492 units. The assessee for the purpose of benchmarking these transactions adopted the rate on the basis of State Electricity Board tariff notification which was 8.1525/Kwh, at which the electricity is Printed from counselvise.com Page | 3 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 sold and supplied to the consumers whereas the rate adopted by the TPO was 4.96/Kwh and thereby, making an adjustment of ₹ 44,83,27,583/-.Accordingly the assessment was framed. 06. In the appellate proceedings, learned CIT (A) allowed the appeal of the assessee after taking into consideration the contentions and submissions of the assessee by following the decision of Hon'ble Apex Court in the case of CIT v. Jindal Steel & Power Limited (Civil Appeal No.13771 or 2015) reported in [2023] 157 taxmann.com 207 (SC) dated 06.12.2023 by observing and holding as under: - “4.1 The appellant is engaged in generation of electricity and had transferred electricity to its other units at the rate of Rs. 8. 1525 per kwh i.e. at the rate of electricity in an open market fixed by UP Electricity Regulatory Commission. The appellant alsopurchased electricity from UPPCL in two of its non-eligible units namely Maizapur&Tulsipur, where the average annual landed cost of electricity for the FY 2017-18 came to INR 9.65 per unit. The appellanthas benchmarked its transaction adopting CUP by relying on the tariff order issued by the state government electricity board for distribution units by treating it as the market rate at which the power is supplied in the open market. However, the Id. TPO has held that the rate of electricity should be the rate charged by generating companies for supply of power to the distribution companies and determined the rate of electricity at Rs.4.96 per Kwh to be at arm's length. 4.2 The appellant has relied on theorder of the Hon'ble ITAT, Kolkata in its own case in ITA No 1672/Kol/2019 for AY 2016-17 dated 05-05-2021wherein the said issue was decided in its favour. Sub-section (8) of section 80-IA provides that goods or services held by the eligible business should be transferred to any other business at \"market value\". Explanation to section 801A(8) provides for the definition of market value. The Explanation was amended w.e.f. 1-4-2013 wherein clause (ii) was inserted relating to arm's length price. The hon'ble Kolkata tribunal discussed the applicability of the two clauses in the Explanation in the aforesaid decision and held the following: 8. The issue on hand is determination of the quantum of profit which could be claimed as deduction under Section 801A of the Act for which we have to determine the price at which the electricity is transferred by the Captive Power Plant of the assessee company to the manufacturing unit of the assessee company. 8.1. Explanation to Section 801A(8) inserted by the Finance Act, 2012 w.e.f. 01.04.2013 reads as follows: Printed from counselvise.com Page | 4 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 \"Explanation. -For the purposes of this sub-section, \"market value\", in relation to any goods orservices, means- (i) the price that such goods or services would ordinarily fetch in the open market; OR(ii) the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA.\" (Emphasis ours) 8.2. A plain reading of the above explanation demonstrates that, for determination of market value, you can adopt the price at which the goods or services would ordinarily fetch in the open market OR the ALP as defined in Section 92F(ii) of the Act where the transfer of such goods or services is a specified domestic transaction referred u/s 92BA of the Act. The Act states that either of the above two may be adopted as the \"market value\". This, in our view justifies the claim of the assessee that it can claim \"Market Value\" as per limb (i) of the Explanation.\" 4.3 As held by the tribunal the assessee can claim the market value of goods and services transferred as per clause (i) of the Explanation i.e. the price such goods and services would ordinarily fetch in the open market even after insertion of arm's length price in clause (ii). 4.4 The issue of market value (relevant for clause (i) of the aforesaid Explanation) relating to the rate of supply of power by generating units to its own other units has been settled by the Hon'ble Supreme Court in the case of CIT vs. JINDAL STEEL & POWER LIMITED (CIVIL APPEAL No. 13771 OF 2015) reported in [2023] 157 taxmann.com 207 (SC) [06-12-2023] wherein the court held that market value of power supplied by assessee to its industrial units should be computed by considering rate at which State Electricity Board supplied power to consumers in open market and not comparing it with rate of power when sold by appellantto State Electricity Board. Further, the principle that emanates from the judgement is that the said rate should be considered as arm's length price for the purpose of transfer pricing. The relevant extract of the decision of Jindal Steel (supra) is as below: \"22. Reverting back to sub-section (8) of Section 80-IA, it is seen that if the assessing officer disputes the consideration for supply of any goods by the assessee as recorded in the accounts of the eligible business on the ground that it does not correspond to the market value of such goods as on the date of the transfer, then for the purpose of deduction under section 80-IA, the profits and gains of such eligible business shall be computed by adopting arm's length pricing. In other words, if the assessing officer rejects the price as not corresponding to the market value of such good, then he has to compute the sale price of the good at the market value as per his determination. The explanation below the proviso defines market value in relation to any goods to mean the price that such goods would ordinarily fetch on sale in the open Printed from counselvise.com Page | 5 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 market. Thus, as per this definition, the market value of any goods would mean the price that such goods would ordinarily fetch on sale in the open market. 23. This brings to the fore as to what do we mean by the expression \"open market\" which is not a defined expression. 24. Black's Law Dictionary, 10th Edition, defines the expression \"open market\" to mean a market in which any buyer or seller may trade and in which prices and product availability are determined by free competition. P. Ramanatha Aiyer's Advanced Law Lexicon has also defined the expression \"open market\" to mean a market in which goods are available to be bought and sold by anyone who cares to. Prices in an open market are determined by the laws of supply and demand. 25. Therefore, the expression \"market value\" in relation to any goods as defined by the explanation below the proviso to sub-section (8) of Section 80- IA would mean the price of such goods determined in an environment of free trade or competition. \"Market value\" is an expression which denotes the price of a good arrived at between a buyer and a seller in the open market i.e., where the transaction takes place in the normal course of trading. Such pricing is unfettered by any control or regulation; rather, it is determined by the economics of demand and supply. 26. Under the electricity regime in force, an industrial consumer could purchase electricity from the State Electricity Board or avail electricity produced by its own captive power generating unit. No other entity could supply electricity to any consumer. A private person could set up a power generating unit having restrictions on the use of power generated and at the same time, the tariff at which the said power plant could supply surplus power to the State Electricity Board was also liable to be determined in accordance with the statutory requirements. In the present case, as the electricity from the State Electricity Board was inadequate to meet power requirements of the industrial units of the assessee, it set up captive power plants to supply electricity to its industrial units. However, the captive power plants of the assessee could sell or supply the surplus electricity (after supplying electricity to its industrial units) to the State Electricity Board only and not to any other authority or person. Therefore, the surplus electricity had to be compulsorily supplied by the assessee to the State Electricity Board and in terms of Sections 43 and 43A of the 1948 Act, a contract was entered into between the assessee and the State Electricity Board for supply of the surplus electricity by the former to the latter. The price for supply of such electricity by the assessee to the State Electricity Board was fixed at Rs. 2.32 per unit as per the contract. This price is, therefore, a contracted price. Further, there was no room or any elbow space for negotiation on the part of the assessee. Under the statutory regime in place, the assessee had no other alternative but to sell or supply the surplus electricity to the State Electricity Board. Being in a dominant position, the State Electricity Board could fix the price to which the assessee really had little or no scope to either oppose or negotiate. Therefore, it is evident that determination of tariff between the assessee and the State Electricity Board cannot be said to be an exercise Printed from counselvise.com Page | 6 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 between a buyer and a seller in a competitive environment or in the ordinary course of trade and business i.e., in the open market. Such a price cannot be said to be the price which is determined in the normal course of trade and competition. 27. Another way of looking at the issue is, if the industrial units of the assessee did not have the option of obtaining power from the captive power plants of the assessee, then in that case it would have had to purchase electricity from the State Electricity Board. In such a scenario, the industrial units of the assessee would have had to purchase power from the State Electricity Board at the same rate at which the State Electricity Board supplied to the industrial consumers i.e., Rs. 3.72 per unit. 28. Thus, market value of the power supplied by the assessee to its industrial units should be computed by considering the rate at which the State Electricity Board supplied power to the consumers in the open market and not comparing it with the rate of power when sold to a supplier i.e., sold by the assessee to the State Electricity Board as this was not the rate at which an industrial consumer could have purchased power in the open market. It is clear that the rate at which power was supplied to a supplier could not be the market rate of electricity purchased by a consumer in the open market. On the contrary, the rate at which the State Electricity Board supplied power to the industrial consumers has to be taken as the market value for computing deduction under section 80-IA of the Act. 29. Section 43A of the 1948 Act lays down the terms and conditions for determining the tariff for supply of electricity. The said provision makes it clear that tariff is determined on the basis of various parameters. That apart, it is only upon granting of specific consent that a private entity could set up a power generating unit. However, such a unit would have restrictions not only on the use of the power generated but also regarding determination of tariff at which the power generating unit could supply surplus power to the concerned State Electricity Board. Thus, determination of tariff of the surplus electricity between a power generating company and the State Electricity Board cannot be said to be an exercise between a buyer and a seller under a competitive environment or a transaction carried out in the ordinary course of trade and commerce. It is determined in an environment where one of the players has the compulsive legislative mandate not only in the realm of enforcing buying but also to set the buying tariff in terms of the extant statutory guidelines. Therefore, the pricedetermined in such a scenario cannot be equated with a situation where the price is determined in the normal course of trade and competition. Consequently, the price determined as per the power purchase agreement cannot be equated with the market value of power as understood in the common parlance. The price at which the surplus power supplied by the assessee to the State Electricity Board was determined entirely by the State Electricity Board in terms of the statutory regulations and the contract. Such a price cannot be equated with the market value as is understood for the purpose of Section 801A (8). On the contrary, the rate at which State Electricity Board Printed from counselvise.com Page | 7 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 supplied electricity to the industrial consumers would have to be taken as the market value for computing deduction under section 80-1A of the Act. 30. Thus on a careful consideration, we are of the view that the market value of the power supplied by the State Electricity Board to the industrial consumers should be construed to be the market value of electricity. It should not be compared with the rate of power sold to or supplied to the State Electricity Board since the rate of power to a supplier cannot be the market rate of power sold to a consumer in the open market. The State Electricity Board's rate when it supplies power to the consumers have to be taken as the market value for computing the deduction under section 80-IA of the Act. 31. That being the position, we hold that the Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers. Therefore, the High Court was fully justified in deciding the appeal against the revenue. 32. Revenue has relied upon the decision of the Calcutta High Court in ITC Ltd. (supra). In that case, the High Court rejected the first contention of the revenue that the assessee therein was not entitled to the benefit under section 80-IA of the Act because the power generated was consumed at home or by other business of the assessee. After holding so, the High Court however, answered the question on the point of computation of profits and gains of the eligible business against the assessee. On going through the judgment, we find that facts of that case are clearly distinguishable from the facts of the present batch of appeals. It is noticeable that though an opportunity was granted by the assessing officer to the assessee to adduce evidence to justify the price of electricity sold by it to its paper unit, the same could not be availed of by the assessee. The electricity generated was sold by the assessee entirely to its paper unit. There was no surplus electricity to be supplied to the State Electricity Board and consequently, there was no contract between the assessee and the State Electricity Board determining the rate of tariff for theelectricity supplied by the assessee to the State Electricity Board. On the other hand, it was noticed that the Electricity Act, 2003 had come into force whereby and whereunder, the rate at which electricity could be supplied is determined, notably by Sections 21 and 22 thereof. That apart, there is the tariff regulatory commission which has the mandate for fixing the rates for sale and purchase of electricity by the distribution licensee. Thus it was noted that there is an inbuilt mechanism to ensure permissible profit both to the generating companies and to the distribution licensees. Therefore, it was held by the High Court that the assessee's generating unit could not claim any benefit under section 80-1A of the Act computing the profits and gains on the basis of the rate chargeable by the distribution licensee from the consumer and that the benefit could only be claimed on the basis of the rates fixed by the tariff regulatory commission for sale of electricity by the generating company. Facts being clearly distinguishable, this decision can be of no assistance to the revenue. Printed from counselvise.com Page | 8 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 33. Before parting with this issue, we may mention that reliance placed by Mr. Rupesh Kumar, learned counsel for the revenue on the definition of the expression \"market value\" as defined in the explanation below sub-section (6) of section 80 A of the Act is totally misplaced inasmuch as sub-section (6) was inserted in the statute with effect from 1-4-2009 whereas in the present case we are dealing with the assessment year 2001-2002 when this provision was note even borne. 34. That being the position, we have no hesitation in answering this issue in favour of the assessee and against the revenue.\" 4.5 The aforesaid decision of the hon'ble Supreme Court was for the period prior to introduction of Transfer Pricing (TP) provisions on such specified domestic transactions, however, the same would equally apply to the period post introduction of the TP provisions as the concept of market price is the basis for determination of the arm's length price under TP provisions also which does not stand diluted. Even under TP provisions, the exercise conducted is to determine the market price by determining the arm's length price by following the procedure defined under Chapter X of the Income Tax Act. Moreover, as per the decision of hon'ble Kolkata tribunal in appellant's own case for AY 2016-17, the appellant can claim \"market value\" as per clause (i) of the Explanation to section 80-1A(8) which was also applicable to the Jindal Steel case decided by the hon'ble Supreme Court. Therefore, once the hon'ble Supreme Court has defined the market price for the purpose of transfer of electricity by the eligible units to the non-eligible units, the said price will also have to be accepted as the price as per clause (i) of the Explanation to section 80-1A(8). 4.6 As evident from the assessment order and submissions made, the facts of the caseareidentical to the issues raised before the Id. Bench of ITAT, Kolkata in the case of Balarampur Chini Mills Ltd.for AY 2016-17 (supra), wherein the revenue appeal was dismissed and following was held: \"8.12. In all the above case laws, the Courts have determined that the market value should be the rate at which electricity is supplied by the State Electricity Boards to its industrial customers. As already stated the Explanation to Section 801A(8) inserted by the Finance Act, 2012 w.e.f. 01.04.2013 gives an option for determination of \"Market Value\" as the ALP under the transfer pricing provisions OR as the price of such goods and services as, that it would fetch in the open market. 8.13. If it is taken that ALP is the market value, then we find there is no dispute that the MAM is CUP. The contention of the Id. D/R that when MAM is taken as CUP, we need not determine a tested party is erroneous. The ICAI in Guidance note u/s 948 of the Act has laid down that the tested party has to be identified even when MAM is CUP. In this case the assessee has taken that the tested party as the non-eligible unit and whereas the TPO has taken the tested party as the CPP i.e. the eligible unit. In our view the profit of the non-eligible unit also has to be properly determined. The only purpose for which the manufacturing unit is taken as the tested party was to determine the market value at which the manufacturing unit purchases power from unrelated third parties. No other function etc. are in question. In our view taking the Printed from counselvise.com Page | 9 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 manufacturing unit as tested party for the purpose of determination of ALP with MAM being CUP, cannot be found fault with. The TPO has chosen to take the price specified in the PPAs for purchase of power as the market value. The PPA is a 20 year agreement. The assessee required to take statutory clearances and approvals. The price is regulated. The sale of power under the terms and conditions of PPA cannot be considered as the market value of the sale of electricity. Such sales cannot be considered as made in \"uncontrolled conditions\". The Id. D/R submitted that the power generating company does not have distribution costs. When a captive power plant in an industry supplies electricity to its own manufacturing unit, there is no power distribution cost. The savings of cost of power can be determined only when the rate at which the manufacturing unit of the company purchases power in the open market from the power distribution companies is considered. Imaginary costs which are not incurred cannot guide our decision. 8.14. Thus while determining the ALP under transfer pricing provisions, in our view the assessee has correctly identified the manufacturing unit as the tested party and CUP as the MAM and the purchase price of electricity in the open market from the State Electricity Board to the manufacturing units in uncontrolled conditions as the Arms Length Price. 9. In view of the above discussion, consistent with the view taken in the case of M/s. Electrosteel Casting Limited (supra) and applying the propositions of law laid down by the jurisdictional High Court in the case of Graphite India Ltd. (supra), M/s. Kanoria Chemicals & Industries Ltd. (supra) and the Gujarat High Court in the case of Gujarat Alkalies and Chemicals Ltd. (supra) as well as the judgement of the Hon'ble Chhattisgarh High Court in the case of Godawari Power &IspatLtd. (supra) we uphold the finding of the Id. CIT(A) and dismiss this appeal of the Revenue. 10. In the result, the appeal filed by the Revenue is dismissed.\" 4.7 It is further noted that subsequent to rendering of the judgment of Calcutta High Court in the case of CIT Vs ITC Ltd. dated 01-06-2015 (236 Taxman 612), the coordinate Benches of the Tribunal at Kolkata in Kanoria Chemicals & Industries Ltd (ITA No.944/K/16) & Graphite India Ltd Vs Addl. CIT (ITA No. 304-305/K/08) dismissed the Revenue's appeal against the Ld. CIT(A)'s order wherein the relief was allowed under Section 80-1A in respect of profits of CPPs by taking selling price of electricity equal to the landed cost at which the electricity was supplied by State Electricity Board (SEB) to the assessee's other units consuming electricity. It distinguished the facts in the case of ITC Ltd, wherein the power was sold in the state of Andhra Pradesh which had imposed restrictions on sale of power to third parties and that power was not sold in the open market. Further, the hon'ble Supreme Court in the case of Jindal Steel duly considered the decision in the case of ITC Ltd. and decided in favour of assessee. 4.8 Relying on the decision of the Hon'ble Supreme Court in the case of CIT vs. JINDAL STEEL & POWER LIMITED (Supra) and appellant's own case decided by hon'ble Kolkata tribunal for AY 2016-17,I hold that the rate adopted by the assessee i.e. Rs.8.1525 being the rate fixed by UPERC for sale of electricity in the open market shall be the Printed from counselvise.com Page | 10 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 arm's length price in the case of the assessee for A.Y. 2017-18 for supply of electricity by eligible units of the assessee to its non-eligible units. Hence, the issue is decided in favour of the appellant and the transfer pricing adjustment of Rs.44,83,27,538/- made by the Id. AO based on the order of the TPO is deleted and these grounds of appeal are allowed.” 07. After hearing the rival contentions and perusing the materials available on record, we find that only issue involved in the present appeal is determination of arm's length price of the domestic transactions of sale of captive power the associated enterprises, as stated hereinabove. The assessee benchmarked these transactions on the basis on SEB tariff notification which was ₹8.1525/Kwh whereas the Transfer Pricing Officer adopted ₹4.96/Kwh for benchmarking these domestic transactions with the AEs thereby making an adjustment of ₹44,83,27,538/-. Accordingly, the assessment was framed by the learned ld. AO making this addition. The learned CIT (A) while passing the order, has followed the decision of the Coordinate Bench in ITA No. 1672/KOL/2019, for A.Y. 2016-17, dated 5-5-2021, in the assessee own case. The learned CIT (A) also followed the decision passed by the Hon'ble Apex Court in the case of CIT Vs.Jindal Steel & Power Limited (supra), in which the Hon’ble Court has settled the issue once and for all by holding that market value of power supplied by the assessee to its industrialized units should be computed by considering the rate at which the State Electricity Board supplied power in the market to the consumers. The operative part of the decision has been extracted in the appellate order above. Besides, we note the decision for A.Y. 2016-17 in assessee’s own case has not been challenged before the Honorable High Court and has attained finality. Even on that count, the order passed by the Learned CIT is correct and valid. We also note that the learned CIT (A) has followed the same and therefore, the order passed by the learned CIT Printed from counselvise.com Page | 11 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 (A) is very reasoned and speaking order which has been passed in accordance with the ratio laid down by the Honorable Apex Court as referred to above and accordingly, we uphold the order of the learned CIT (A) by dismissing the appeal of the Revenue. ITA No. 1080 & /Kol/2025 A.Y. 2018-19. 08. The issue raised in this appeal is similar to one as decided by us in ITA No. 1079/Kol/2025 A.Y. 2017-18. Therefore, our decision in ITA No. 1079/Kol/2025 A.Y. 2017-18 would, mutatis mutandis, apply to this appeal a well. Consequently, the appeal of the revenue is dismissed. ITA No. 1081/KOL/2025 for A.Y. 2020-21 09. The first issue raised in ground no. 1 to 12 in this appeal is similar to one as decided by us in ITA No.1079/Kol/2025 for A.Y. 2017-18. Therefore, our decision in the said appeal would, mutatis mutandis, apply to this ground no. 1 to 12 of the revenue’s appeal as well. Accordingly, the ground no. 1 to 12 are dismissed. 010. The second issue raised by the Revenue in ground no. 13 is against the deletion of addition by the learned CIT (A) of ₹ 1,38,084,438/- as made by the learned AO u/s 14A of the Act. 011. The facts in brief are that during the impugned financial year, the assessee has not earned any exempt income from the investments in shares and securities. The learned AO during the course of assessment proceedings noted that though the assessee has not received any exempt income during the year but that the investments were capable of yielding exempt income in the subsequent years, and accordingly, invoked the provisions of Section 14A of the Act and made an addition of ₹1,38,084,438/-. Printed from counselvise.com Page | 12 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 012. The learned CIT (A) in the appellate proceedings allowed the appeal of the assessee after taking into account the contentions of the assessee by holding and observing as under: “3.19 On a perusal of the facts of the case, it is evident that the assessee had not earned any exempt income during the year. It has been contended by the assessee that nodisallowance can be made u/s 14A of the Act in the absence of any exempt income earned during the year it has been held by hon'ble Calcutta High Court in the cases of REI Agro [2022] 140 taxmann.com 71 and GKK Capital Markets Pvt. Ltd. (2017) 392 ITR 192(Cal) that no disallowance can be made u/s 14A in absence of exempt income earned during the year. However, section 14A was amended by Finance Act 2022. Post amendment to section 14A, disallowance u/s 14A can be made even if no exempt income is earned by the assessee. The issue whether the amendment to section 14A of the Act made by Finance Act, 2022 is retrospective or prospective has been settled by the Hon'ble Delhi High Court in the case of PCIT v. Era Infrastructure (India) Ltd [448 ITR 674] wherein the Hon'ble Court held that the amendment made by the Finance Act, 2022 to section 14A by inserting a non-obstante clause and Explanation will take effect from 1-4-2022 and cannot be presumed to have retrospective effect. 3.20 find that the ratio laid down in the case of PCIT v. Era Infrastructure (India) Ltd. (Supra) judgment dt. 20/07/2022, wherein the Hon'ble Court has held that the amendment made in Section 14A of the Act by Finance Act, 2022, will be applicable prospectively and also held that disallowance u/s 14A of the Act should not exceed the exempt income eamed by the assessee during the year, is squarely applicable to the case of the assessee since the assessee had not earned any exempt income during the year. In view of the same, I hold that no disallowance u/s. 14A of the Act is called for in the present case. Hence the disallowance made by the AO u/s 14A of the Act of Rs. 1,38,84,438/- is hereby deleted and this ground of appeal is allowed.” 013. After hearing the rival contentions and perusing the materials available on record, we find that the case of the assessee is squarely covered by the various decisions of judicial forums, wherein Hon'ble Courts have held that where there is no exempt income, no disallowance is called for u/s 14A of the Act. We note that the appellate order passed by the learned CIT (A) by following the decision of the Hon'ble Delhi High Court in the case of PCIT v. Era Infrastructure (Supra) and is a very reasoned and speaking order and does not require any interference at our end. Accordingly, we dismiss the ground no. 13 of revenue’s appeal. Printed from counselvise.com Page | 13 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 014. The third issue raised in ground no. 14 to 17 is against the order of learned CIT (A) allowing the deduction under Section 80G of the Act in respect of donation made under compulsory CSR expenditure which were incurred as donations to the eligible institutions under Section 80G of the Act. 015. The facts in brief are that the assessee during the year had paid ₹10,92,15,222/- for A.Y. 2020-21 to certain eligible funds/ charitable organizations registered under Section 80G of the Act whereas the total expenses incurred under CSR were Rs. 10,92,88,570/-. While computing the total income the amount paid towards CSR expenses (donations) were suo motto added to the income of the assessee and thereafter, claimed the deduction u/s 80G of the Act equal to 50% of the donations thereby claiming deduction of ₹5,46,07,611/- u/s 80G of the Act which was also duly certified by the tax auditor in Form 3CD. The assessee also filed full details before the learned AO including copy receipts and certificates u/s 80G etc. 016. According to the AO the assessee is not entitled to deduction u/s 80G of the Act in respect of expenditure incurred under head CSR expenses. The assessee submitted that CSR expenses and donations are two distinct and separate issues. The learned Authorized Representative submitted that the assessee had suo motto added these expenses u/s 37 of the Act and rightly claimed deduction u/s 80G of the Act. However, the AO was not in agreement with the assessee and disallowed the deduction claimed by the assessee u/s 80G of the Act. 017. In the appellate proceedings, the learned CIT (A) allowed the appeal of the assessee by observing and holding as under: - Printed from counselvise.com Page | 14 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 “3.14 I have gone through the assessment order, the submission made by the appellant and the documents furnished by the assessee in support of its claim. I have also perused the ITR and Tax Audit Report filed by the assessee. On perusal of the ITR filed for A.Y.2020-21. it was found that the assessee has disallowed the sum of Rs. 10,92,88,570/-on account of Expenses incurred on Corporate Social Responsibility (CSR) u/s 37 of the Act in its ITR at page 34, clause 7(h). The sum of Rs. 10,92,15,222/- as CSR was given to charitable institutions. The appellant furnished the receipts and the 80G certificates issued by those institutions to the assessee. Hence it is clear that the assessee has paid CSR Donation to charitable institutions which are registered institutions w/s 80G of the Act. The only issue that arises for consideration is whether the said donation on account of CSR is allowable as deduction u's 80G of the Act. 3.15 Section 80G of the Act specifically mentions two instances viz, sub-clauses (lihk) and (iiihl) of section 80G(2)(a), l.e., contributions towards Swacha Bharat Kosh and Clean Ganga Fund respectively, where CSR expenditure is not allowable as deduction w/s.80G. This implies that such prohibition does not apply to any other CSR expenditure when no such prohibition has been mentioned in section 80G of the Act. Hence, CSR expenditure other than those relating to Swacha Bharat Kosh and Clean Ganga Fund are to be considered as allowable ws 80G of the Act. In the case of Deputy Commissioner of Income Tax vs. M/s. The Peerless General Finance & Investment & Co. Ltd.(Supra), the Jurisdictional Tribunal after considering the provisions of Explanation (2) to Section 37 of the Act and Section 80G of the Act, observed that the Parliament intended restrictions 10 CSR expenditure spent by way of donations to only two funds/trusts i.e. Swachh Bharat Kosh and Clean Ganga Fund. The Tribunal thus held that, the fact that specific prohibition/restriction has been made for CSR contributions only to two eligible charitable organizations, automatically implies that there is no prohibition/restriction in respect of claim of CSR expenses in any other case, which are otherwise eligible under section 80G of the Act. The Kolkata Tribunal has taken the same view in the case of JMS Mining (P.) Ltd. v. Pr. CIT in ITA No. 146/Rs/2021 dated 22 July 2021/[2021] 130 taxmann.com 118/190 ITD 702 (Rs. Trib.) and Acme Chem Ltd. v. DCIT in ITA No. 650/Rs/2022 dated 31-3-2023 and has deleted similar disallowances made by the AO uw/s.80G of the Act in relation to the CSR donations made to registered charitable trusts. 3.16 The assessee has also placed reliance on decisions of the Bangalore Tribunal in several cases wherein CSR paid to the institution registered u/s 80G were allowed as deduction u/80G of the Act. 3.17 In view of the discussion made above, the disallowance made by the AO of Rs.5,46,07,611/- which was claimed by the assessee u/s 80G of the Act is deleted and this ground of appeal is allowed.\" 018. After hearing the rival conditions and perusing the materials available on record, we find that during the year the assessee has incurred ₹ 10,92,88,570/- on corporate social responsibility which were so-motto Printed from counselvise.com Page | 15 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 added to the income while filing the return of income. We note that the assessee has incurred these expenses by way of payments to various trusts/ institutions registered under Section 80G of the Act and accordingly, claimed deduction equal to 50% of the amount donated, which was disallowed by the Learned AO. We note that the Learned CIT (A), by following the various decisions such as DCIT Vs. M/s The Peerless General Finance & Investment & Co. Ltd. in ITA No. 1469 & 1470/KOL/2019 (2019) 112 taxmann.com 410 (Kolkata-Trib.) dated 05.12.2019, Goldman Sachs Services Pvt. ltd. Vs. JCIT in IT(TP)A No. 2355/Bang/2019, Allegis Services (India) Vs. CIT in ITA No. 1963/Bang/2019, dated 29th April, 2020 and M/s FNF India Pvt. Ltd. Vs. ACIT in ITA No.1565/Bang/2019 dated 05.01.2021 allowed the deduction u/s 80G. Therefore, we do not find any reason to deviate from the findings given by the ld. CIT (A) who was passed a very reasoned and speaking order on this issue. Accordingly, we uphold the order of ld. CIT (A) by dismissing the ground no. 13 to 17 of the Revenue appeal. ITA No. 1082/KOL/2025 for A.Y. 2021-22 019. The first issue raised in ground no. 1 to 12 in this appeal is similar to one as decided by us in ITA No.1079/Kol/2025 for A.Y. 2017-18. Therefore, our decision in the said appeal would, mutatis mutandis, apply to this ground no. 1 to 12 of the revenue’s appeal as well. Accordingly, the ground no. 1 to 12 are dismissed. 020. The second issue raised in ground no. 13 to 16 in revenue appeal is similar to one as decided by us in ground no. 14-17 in ITA No. 1081/KOL/2025 for A.Y. 2020-21. Therefore, our decision in the said appeal would, mutatis mutandis, apply to this ground no. 13 to 16 of Printed from counselvise.com Page | 16 ITA No.1079 to 1082/KOL/2025 Balrampur Chini Mills Ltd.; A.Ys. 2017-18, 2018-19, 2020-21 & 2021-22 the revenue’s appeal as well. Accordingly, the ground nos. 13 to 16 are dismissed. 021. In the result all the four appeals of the revenue are dismissed. Order pronounced in the open court on 26.08.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 26.08.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "