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2021 (9) TMI 589 - AT - Income TaxAccrual of income - Supply of steam free of cost - Estimation of Profit from sale of steam - Addition of notional receipt from supply of steam - assessee why no income has been accounted on the account of sale of steam supplied to SBEC Sugar Ltd. and why rate of steam sold to SSL should not be taken at ₹ 236/- per ton as per earlier years - HELD THAT - We find that CIT(A) while deciding the issue in favour of the assessee had noted that identical issue arose in assessee's own case in earlier years and the Tribunal has decided the issue in those years in assessee's favour. We also find that identical issue arose in assessee's own case in A.Y. 2014-15. In Revenue's appeal, the Co-ordinate Bench of Tribunal vide order dated 19.03.2021 2021 (3) TMI 936 - ITAT DELHI and by following the order of the Tribunal 2012 (3) TMI 665 - ITAT DELHI for A.Y. 2007-08 had dismissed the appeal of the Revenue thereby deciding the issue in favour of the assessee.
Issues Involved:
1. Deletion of addition made by the AO on account of profit from the sale of steam. Issue-Wise Detailed Analysis: 1. Deletion of Addition on Account of Profit from Sale of Steam: The primary issue in this appeal is whether the CIT(A) was justified in deleting the addition of ?5,35,56,896/- made by the AO on account of profit from the sale of steam. The AO had noticed that the assessee had shown the production of steam, which was supplied to SBEC Sugar Limited (SSL) free of cost, unlike in earlier years when it was sold at ?75/- per ton. The AO considered the sale of steam at ?236/- per ton, resulting in an addition of ?5,35,56,896/- to the total income of the assessee. The CIT(A) deleted the addition by following the decision of the Tribunal in the assessee's own case for earlier years, specifically Assessment Years 2003-04 to 2009-10, where the issue was decided in favor of the assessee. The CIT(A) noted that the Tribunal had consistently held that no real income accrued to the assessee from the supply of steam to SSL, as SSL had stopped making payments for steam since October 2001, and the conversion agreement between SSL and the assessee was not approved by PICUP. The Tribunal, in the current appeal, observed that the issue had been consistently decided in favor of the assessee in earlier years, including A.Y. 2014-15, where the Tribunal had dismissed the Revenue's appeal by following its order for A.Y. 2007-08. The Tribunal reiterated that the CIT(A) had correctly followed the earlier decisions and noted that the Revenue had not pointed to any distinguishing feature in the facts of the current year compared to earlier years. Additionally, the Revenue had not provided any material to demonstrate that the ITAT orders in the assessee's own case for earlier years had been stayed, set aside, or overruled by a higher judicial forum. The Tribunal concluded that no interference with the order of the CIT(A) was warranted for the year under consideration and dismissed the ground of the Revenue. Conclusion: The appeal of the Revenue was dismissed, and the deletion of the addition made by the AO on account of profit from the sale of steam was upheld. The Tribunal's decision was based on the consistent findings in the assessee's favor in earlier years, where it was established that no real income accrued from the supply of steam to SSL, and the conversion agreement was not approved by PICUP.
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