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TMI Blog2015 (9) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... EVI, JJ. For The Revenue : Mr. Ramakrishna Bandi For The Assessee : Mr. C.S. Subrahmanyam and Mr. V. Sivakumar ORDER PER P.M. JAGTAP, A.M. One of the two issues involved in these two appeals filed by the Revenue is common and the same therefore have been heard together and are being disposed of by a single consolidated order. First, we shall take-up the appeal filed by the Revenue for A.Y. 2007- 2008 being ITA.No.1468/Hyd/2013 which is directed against the order of Ld. CIT(A)-V, Hyderabad dated 31.07.2013. The solitary issue involved in this appeal relates to the deletion by the Ld. CIT(A) of the addition of ₹ 53,19,838 made by the A.O. on account of difference in the valuation of banked energy. 2. The assessee in the present case is a company which is engaged in the business of manufacturing of cement. During the previous year relevant to A.Y. 2007- 2008, it commissioned a New Wind Electricity Generating Unit in Tamilnadu. It was already having a Wind Power Generation Unit in Andhra Pradesh and had entered into Power Purchase Agreement with Transmission Corporation of Andhra Pradesh Limited. A survey under section 133A was carried out on 13.03.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with CPDCL, the power generated by the assessee was being evacuated to CPDCL through Power Grid and once the power was so evacuated, the banked units did not remain the property of the assessee company. He held that when the electricity generated by the assessee was evacuated to the CPDCL at the inter-connection point, the transaction was completed as per the power purchase agreement and the value of such banked units for the purpose of recognizing the revenue should be taken at the agreement price of ₹ 3.10 per unit. Accordingly, adopting the said rate, the value of banked energy units of 22,25,874 was worked by the A.O. at ₹ 69,00,209 as against ₹ 15,80,371 taken by the assessee and the difference of ₹ 53,19,838 was added by him to the total income of the assessee in the assessment completed under section 143(3) vide order dated 31.12.2009. 3. Against the order passed by the A.O. under section 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) disputing the addition of ₹ 53,19,838 made by the A.O. on account of the alleged difference in the valuation of banked units. During the appellate proceedings before the Ld. CIT(A), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omic profit made by the enterprise. The appellant requested for acceptance of the method of valuation consistently followed for banked units which also accords with accounting standards. 5. However, the Assessing Officer opined that once power generated is evacuated through power grid, it no longer remains the property of the appellant and that the appellant has to receive the agreed price i.e., ₹ 3.10 per unit from APCPDCL. He opined that banked energy is part of the delivered energy from the appellant to APTRANSCO at the inter connection point of the grid system and made addition of ₹ 53,19,838 representing the difference in banked energy value. 6. The Assessing Officer failed to appreciate that electric power generated by the appellant cannot be stored like other commodities. It is for this reason that the power generated is evacuated into grid in accordance with the agreement entered into with APCPDCL. Once the power so evacuated is utilized by the appellant for its cement plant, (subject to payment of wheeling charges and banking charges) the appellant realizes the sale value to the extent of units adjusted against the consumption by the cement plant. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly succeeding year and therefore, there was no loss to the Revenue on this count. He also held that there being no change in the relevant facts and circumstances of the case as involved in the year under consideration vis- -vis the earlier years, the A.O. was not correct in changing the method of valuation consistently adopted by the assessee for valuation of banked power units. Accordingly, relying on the decision of Hon ble Supreme Court in the case of CIT vs. Bilhari Investment (P) Limited 299 ITR 1 (SC), the Ld. CIT(A) deleted the addition made by the A.O. by changing the method of valuation of banked power units in the year under consideration. Aggrieved by the order of the Ld. CIT(A), the Revenue has preferred this appeal before the Tribunal. 5. At the time of hearing before us, the learned DR relied on the order of the A.O. in support of Revenue s case on the issue under consideration while the Ld. Counsel for the assessee reiterated the submissions made on behalf of the assessee before the Ld. CIT(A) in support of assessee s case that the addition made by the A.O. on this issue was rightly deleted by the Ld. CIT(A). 6. We have heard the rival contentions and also peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The order of the Ld. CIT(A) is erroneous in law and on facts of the case. ii. The CIT(A) erred in deleting the addition of ₹ 5,40,326/- being difference in value of banked units of power disclosed by the assessee. iii. The CIT(A) erred in deleting the addition of ₹ 3,16,480/- being difference in value of power generation between the assessee and APCPDCL. iv. The Ld. CIT(A) erred in deleting the addition made under section 14A. v. Any other grounds that may be urged at the time of hearing. 8. We have heard the arguments of both the sides and also perused the relevant material on record. Although the learned representatives of both the sides have raised the arguments in support of their respective stand on the issues involved in this appeal on merit, it is observed that the tax effect involved in this appeal of the Revenue is less than the monetary limit of ₹ 4 lakhs prescribed by the CBDT vide Instruction No.5 of 2014 issued on 10.07.2014 for filing the appeals before the Tribunal. Although the said instruction is applicable to the appeals filed on or after 10.07.2014, Hon ble Gujrat High Court in the case of Suresh Chandra Durga Prasad Khatod (H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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