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TMI Blog2022 (11) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... d the application of provisions of Section 43(1) of the Act has not been challenged by the Revenue before us. Hence, there is absolutely no merit in the grounds raised by the Revenue before us. In any case, the issue in dispute is squarely covered by the decision of the Hon ble Jurisdictional High Court in the case of CIT vs. Karma Energy Ltd. 2015 (6) TMI 216 - BOMBAY HIGH COURT] We hold that the ld. CIT(A) had correctly addressed the issue in dispute in favour of the assessee. - ITA No.2777/Mum/2018 - - - Dated:- 30-9-2022 - SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI M.BALAGANESH, ACCOUNTANT MEMBER Assessee by: Shri Satish Modi Revenue by: Shri Ravinder Sindhu ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.2777/Mum/2018 for A.Y.2009-10 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-14, Mumbai in appeal No.CIT(A)-14/IT-25/17-18 dated 31/01/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 24/12/2016 by the ld. Asst. Commissioner of Income Tax (OSD)-7, Mumbai (hereinafter referred to as ld. AO). 2. The Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fluids, tablets, capsules and water for injection. The return of income for the A.Y.2009-10 was electronically filed by the assessee company on 29/09/2009 declaring total income of Rs.5,66,72,400/-. The original assessment was completed u/s.143(3) of the Act on 29/12/2011 determining total income of the assessee at Rs.5,94,76,720/-. Later re-assessment was framed u/s.143(3) r.w.s. 147 of the Act on 26/03/2016 determining total income of the assessee at Rs.137,61,75,450/- by making addition u/s.68 of the Act on account of share premium in the sum of Rs.131,66,98,733/-. Again yet another notice was issued u/s.148 of the Act on 30/03/2016 on the basis of information received from ITO 9(1)(1) Mumbai on 28/03/2016 wherein it revealed that as per survey report from the Investigation Wing, M/s. Anitas Exports Pvt. Ltd., had sold FFS machines to assessee herein in A.Yrs.2008-09,2009-10,2010-11 and 2011-12 at an exorbitant profit ratio and was claiming deduction u/s.80IC of the Act. Based on this, the assessment of the assessee was again reopened after obtaining necessary administrative approval u/s.151 of the Act. The assessee during the course of re-assessment proceedings apart from fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was submitted that the ld. AO had blindly relied on the contentions of the ld. AO of M/s. Anitas Exports Pvt. Ltd., without any independent application of mind from his side and without bringing any comparable cases on record to prove that the cost of acquisition of the assessee is inflated. It was submitted that the main basis for the ld. AO disbelieving the cost of acquisition of assets is that M/s. Anitas Exports Pvt. Ltd., had claimed deduction u/s.80IC of the Act on the profit derived from sale of machines to assessee on one hand and on the other hand, assessee is claiming depreciation at that acquired price. According to ld. AO of M/s. Anitas Exports Pvt. Ltd, sale price of FFS machines is inflated, hence on that inflated consideration, the seller is claiming benefit u/s.80IC of the Act and the payer i.e. assessee herein is claiming excess depreciation. 3.4. In the instant case, to support the pricing of cost of acquisition of the assessee, the assessee had relied upon TEV study report of D.K.Jain and Co., who is an independent technical export appointed by State Bank of India and which report has been furnished to the Revenue in the past and has been consistently acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 wherein similar issue arose with regard to price paid for acquisition of wind mill. The ld. CIT(A) also observed that this case has been further affirmed by the Hon ble Jurisdictional High Court reported in 57 taxmann.com 235. Accordingly, the disallowance made on account of depreciation and additional depreciation was deleted by the ld. CIT(A). 3.6. The ld. DR before us vehemently argued that the arrangement between assessee and M/s. Anitas Exports Pvt. Ltd., for acquisition of FFS machines was a sham transaction. He reiterated the finding of the ld. AO vehemently that both assessee as well as its sister concern were claiming benefits which results in tax avoidance. 3.7. From the aforesaid observations of the ld. CIT(A), we find that the ld. CIT(A) had duly applied the provisions of Section 43(1) of the Act which defines actual cost. We find that the ld. CIT(A) had categorically observed that Rs.20,00,00,000/- is the actual cost of acquisition of FFS Machines for the assessee paid to M/s. Anitas Exports Pvt. Ltd. This factual finding and the application of provisions of Section 43(1) of the Act has not been challenged by the Revenue before us. Hence, there is absolutely n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or that the price was inflated. The Tribunal found that the Assessing Officer had proceeded on the basis of a presumption that the cost of each windmill is inflated by Rs.1 crore and it had not been proved by documentary evidence that such money came back to the assessee from the concern to whom commission was paid, namely M/s. Suhani Traders. 14. Mr. Mistri highlighted the fact that although the receipt of commission by Weizmann group company is alleged, there is no merit whatsoever in the contention that could justify disallowance of the depreciation claim. The Tribunal found that there is no excessive payment. The Assessing Officer has not disputed the fact that the assessee paid lease rent of Rs.5,51,788/- to Weizmann group Ltd. on account of the windmills taken on lease and the contention of the Assessing Officer that lease rents were unreasonable was not based on any cogent material but only based on assumption and presumption. In fact, the lease rents were fixed in accordance with the formula provided by Indian Renewable Energy Development, a Government of India Company which provided support to Electricity Project. 15. The Tribunal found that the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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