Transfer Pricing Adjustment on Corporate Guarantee Deleted Where Methodology Accepted in Earlier Years

ISSUE

Whether the Transfer Pricing Officer (TPO) is justified in making an adjustment on account of Corporate Guarantee Fees charged to Associated Enterprises (AEs), when the same transaction and pricing methodology were accepted by the Department in previous assessment years without any change in facts.

FACTS

Assessment Year: 2021-22.
The Assessee: A pharmaceutical manufacturer.
The Transaction: Provided corporate guarantees to its AEs.
The Dispute: The TPO rejected the assessee’s benchmarking and made an upward adjustment to the guarantee fee.
Defense: The assessee argued that the corporate guarantee arrangements were identical to those in previous years. In those earlier years, the TPO and AO had scrutinized and accepted the transactions as being at Arm’s Length.

DECISION

Rule of Consistency: The Tribunal/Court upheld the order of the Commissioner (Appeals), noting that the issue had already been decided in favor of the assessee in earlier years.
No Factual Change: Since there was no change in the “factual matrix” or legal proposition, the Department cannot take a contrary stand for the current year.
Verdict: The adjustment was deleted. [In Favour of Assessee]

II. MEIS SCRIPS HELD TO BE CAPITAL RECEIPTS, NOT TAXABLE INCOME

ISSUE

Whether export incentives received under the Merchandise Exports from India Scheme (MEIS) constitute Revenue Receipts taxable as income under Section 2(24)(xviii), or Capital Receipts which are not chargeable to tax.

FACTS

The Receipt: The assessee received incentives under the MEIS scheme.
The Provision: Section 2(24)(xviii) generally defines assistance in the form of a subsidy, grant, cash incentive, etc., as “Income.”
The Dispute: The Department sought to tax these receipts as revenue income. The assessee contended they were capital in nature, likely arguing based on the “purpose test” (that the incentive was to offset infrastructure/capital costs or promote investment).

DECISION

Capital Nature: The Tribunal held that the export incentive received under the MEIS scheme is a Capital Receipt.
Exclusion from Income: Consequently, it ruled that such receipts do not fall within the meaning of “Income” under Section 2(24)(xviii).
Verdict: The receipts were held non-taxable (or eligible for exclusion). [In Favour of Assessee]

KEY TAKEAWAYS

The “History” Defense in TP: Transfer Pricing disputes are often repetitive. If you won a point (like Guarantee Commission rates) in a previous year, cite that order immediately. Unless the Department proves a “change in circumstances,” the Tribunal will likely follow the Principle of Consistency (based on Radhasoami Satsang SC ruling).
MEIS Taxability: This is a highly favorable and aggressive ruling. The general view (post-2015 amendments) is that most export incentives are taxable revenue. However, if you can prove the Object of the scheme was to fund capital expansion rather than boost daily profits, you can rely on this judgment to claim the receipt as a non-taxable Capital Receipt.
- Caution: Expect the Department to appeal this to the High Court, as it contradicts the plain reading of Section 2(24)(xviii).

IN THE ITAT AHMEDABAD BENCH ‘D’

Deputy Commissioner of Income-tax

Alembic Pharmaceuticals Ltd.^*

Dr. B.R.R. Kumar, Vice President
and MS. SUCHITRA R. KAMBLE, Judicial Member

IT Appeal No. 436 (Ahd) of 2025
[Assessment year 2021-22]

NOVEMBER 25, 2025

Sher Singh, CIT-DR for the Appellant. S.N. Soparkar, Sr. Adv. for the Respondent.

ORDER

Dr. B.R.R. Kumar, Vice-President.- This appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income-tax (Appeals), Ahmedabad-13 (hereinafter referred to as “CIT(A)” for short) dated 20.12.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act” for short], for Assessment Year (AY) 2021-22.

2. The Revenue has raised the following grounds of appeal:-

(i)

“Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the upward adjustment of Rs. 2,55,68,000/- on account of guarantee fee/ commission charged for the guarantee given by the assessee to its AEs as per provisions of 92C of the Income Tax Act, 1961 for the guarantee given by the assessee to its AEs ?

(ii)

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that there is absence of change in any facts of the Appellant for AY 2021-22 ignoring the fact that the benchmarking arrived by the TPO for the year under consideration on the basis of reliable data obtained from various banks u/s 133(6) of the Income tax Act and hence the decision relied upon by Ld. CIT(A) of M/s Excel Industries Ltd. (SC) is not applicable in the present case of assessee?

(iii)

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the benchmarking arrived by the TPO on the basis of reliable data obtained from various banks u/s 133(6) of the Income tax Act thereby violating Rule 10C of the I.T. Rules, 1962?

(iv)

Whether on facts and in the circumstances of the cases and in law, the Ld. CIT(A) has erred in accepting the ALP of the assessee ignoring the fact that the comparable rate for HDFC and ICICI bank taken by assessee is not reliable as the data obtained by TPO from banks u/s 133(6) of the Income tax Act provides different rate by bank itself thereby violating Rule 10C of the I.T. Rule, 1962?”

(v)

Whether on facts and in the circumstances of the cases and in law, the Ld. CIT(A) has erred in accepting the ALP of the assessee determined by ignoring the guidelines laid down under the I.T. Act and Rules and thereby violating the ratio laid down by the Hon’ble Supreme Court in the case of Sap Labs India Pvt. Ltd. v. ITO?

(vi)

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing the additional claim of MEIS receipts without revising the ITR?

(vii)

Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in holding the additional claim of MEIS receipts as capital in nature, without appreciating the fact that the same were received in lieu of export sales.?

3. The brief facts of the case are that the assessee is engaged in the business of development, manufacturing and marketing of pharmaceuticals products, i.e. Formulations and Active Pharmaceuticals Ingredients. The assessee filed its return of income for the year under consideration 11.03.2022 declaring net taxable income at INR 1050, 96,73,380/- under normal computation and INR 1358,67,07,764/- under book profit u/s 115JB of the Act. During the course of assessment proceedings, a reference was made by the Assessing Officer to the Transfer Pricing Officer (TPO) under Section 92CA(1) of the Act for determination of Arm’s Length Price with reference to the international transactions reported by the assessee in Form No. 3ECB. The TPO vide order dated 30.10.2023, u/s. 92CA(3) of the Act, made a total adjustment of INR 2,55,68,000/- to the total income of the assessee on account of provision of corporate guarantee. Thereafter, the Assessing Officer passed the assessment order dated 29.01.2024, in consonance with the order passed by the TPO, computing an adjustment of INR 2,55,68,000/-.

4. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) granted relief to the assessee by deleting the upward adjustment of INR 2,55,68,000/- on account of guarantee fee/commission charged for the guarantee given by the assessee to its AEs, with following observation:

“8.3.1 Transfer Pricing adjustment on corporate guarantee fee charged from Associated Enterprises (AEs) – INR 2,55,68,000/

8.3.2 The Appellant has raised various grounds towards Transfer Pricing adjustment on corporate guarantee fee charged from Associated Enterprise (‘AEs’) as under:

2.1 On the facts and in the circumstances of the case and in law, the Ld. Transfer Pricing Officer (TPO) and Assessing Officer (AO) have grossly erred in making an addition on account of Transfer Pricing (TP) adjustment on corporate guarantee fen charged from its AEs viz. Alembic Pharmaceuticals Inc. USA (Alembic USA) and Alembic Global Holdings SA (AGH) of INR 2,55,68,000/

2.2 The Lo TPO and AO have grossly erred in holding that provision of corporate guarantee is an international transaction when such corporate guarantee by the Appellant to the bankers of its AEs was in the nature of shareholder activity and therefore, it cannot be considered as an International transaction

2.3 The Ld. TPO and AO have also grossly erred in holding that provision of corporate guarantee is an international transaction when the liability arising from such provision of corporate guarantee by the Appellant to its AEs was only notional in nature and a contingent liability

The Ld. TPO and AC have also erred in law by not considering the fact that the Appellant has not incurred any cost for providing corporate guarantees and that the Appellant does not have any major debts.

24 The Ld TPO and AO have grossly erred in considering the arm’s length commission rate to be 1.50% based on guarantee rates charged by various banks operating in India applying external Comparable

Uncontrolled Price (‘CUP) data and thereby ignoring the internal CUP rates of 0.20% to 0.30% submitted by the Appellant that were charged by the bankers to the Appellant for provision of bank guarantee

2.5 The Ld TPO and AO have also erred in not providing any cogent reasons for rejecting the comparable bank rates for bank guarantees as submitted by the Appellant

26 The Ld. TPO and AO have also erred in not providing the details of various parameters considered by the eight banks, as selected by the Ld. TPO for charging the rate of guarantee for FY 2020-21, basis which the Ld. TPO has determined the arm’s length rate of guarantee commission as 1.50%

2.7 Without prejudice to the above, the Ld TPO and AO have erred in making an adjustment even though the said transaction was accepted to be arm’s length by themselves in the previous years and thereby erred in ignoring the Principle of consistency when the facts & circumstances continue to remain the same

2.8 Without prejudice to above, the Ld. TPO and AO have erred in ignoring the differences between the corporate guarantee and bank guarantee and that the rate of commission to be charged for corporate guarantee, if any, shall be much lower than the rate of commission charged by banks for providing bank guarantee.

2.9 Without prejudice to the above the Ld. TPO and AO have erred in computing an adjustment at 1.50% even though various judicial decisions have held that corporate guarantee fee be charged at 0.50%.

8.3.3 After going through the facts of the matter as elaborated by the TPO and enumerated by the AR in various grounds I am of the considerable view that said transaction of provision of corporate guarantee was already accepted to be at arm’s length by the Ld. TPO and AO during previous Assessment years namely A.Y 15-16. A.Y 16-17 AY 18-19. As such there are no maternal changes in the facts pertaining to the transaction for the current period. Hence, following the ‘Principle of Consistency’ which requires that when the facts & circumstances continue to remain the same, then there should not be any variation in the treatment from earlier years and relying on the judgement of Apex Court in the matter of Mis Excel Industries Ltd. (SC) held that,

“In Radhasoami Satsang Saomi Bagh v. Commissioner of Income Tax, [1992] 193 ITR 321 (SC) this Court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same fundamental aspect permeates in different assessment years. In arriving at this conclusion, this Court referred to an interesting passage from Hoystead v. Commissioner of Taxation, 1926 AC 155 (PC) wherein it was said “Parties are notpermitted to begin fresh litigation because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the court of the legal result either of the construction of the documents or the weight of certain circumstances if this were permitted, litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted and there is abundant authority reiterating that principle. Thirdly the same principle, namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed In that case also a defendant is Commissioner of Income-tax v. Dalmia Promoters Developers (P) Ltd(Delhi High Court) bound by the judgment although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken.”

8.3.4 It is settled law that principles of consistency will be applied if there is no change in the facts and circumstances. I am also of the view that principle of consistency should be applied in the given facts and circumstances as there were no change in comparison to the previous assessment year. I am aware of the fact that strictly speaking, res judicata does not apply to income tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order it would not be at all appropriate to allow the position to be changed in a subsequent year. It is not permitted to begin fresh litigations because of new views they may entertain of the law of the case or new versions which they present as to what should be proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted. In the absence of change in any facts of the Appellant for AY 2021-22, this act of deviation on part Ld. TPO and AO is against the well-established Principle of Consistency. Hence, said addition is deleted.

8.4 Another ground of appeal raised by the appellant is regarding claim of export incentives received as capital receipt for normal and MAT purpose.

8.4.1 The facts of the case are that the Appellant did not make this claim in the return of income. During the scrutiny proceedings, this claim has been made before the AO vide its letter dated 20.10.2023. However, the AO had not made any observations on this claim though the assessee requested to allow the same. The same issue came for adjudication for the appeal filed by the assessee in its own case for the AY 2018-19 and AY 2020-21 with different quantum of export incentives. For the AY 2021-22, the quantum of exports incentives under MEIS Scrips received is Rs. 59,79,85,415/-, Hence, the decision taken by my predecessors in CIT(A) proceedings on this very issue for the AY 2018-19 & AY 2020-21 is squarely applicable to the ground raised in this appeal on characterization of export receipts. The discussion for the AY 2018-19 is reproduced below for ready reference

14.01During the assessment proceedings, the assessee made an additional claim before the AO for reducing the taxable receipts Rs 57,83,98,917/- which are reported in the profit and loss account under the caption export incentives received in the form of scripts under Merchandise Export from India Scheme (MEIS) pursuant to the Foreign Trade Policy 2015-2020. However, while filing the return of income for the AY2018-19, the appellant claims that it has in advertently offered the MEJS Scrips as revenue receipts. The appellant made a claim before the AO otherwise than filing the revised return to treat the MEIS Scrip value as capital receipts. To substantiate his fresh claim which was not made in the return income but to consider the same, the assessee placed reliance on the CBDT circular 14 (XL-35) dated 11.4.1955 and requested the AQ to reduce the receipts of MEIS Scripts from returned income. However, the AO has not considered the plea of the appellant during the assessment proceedings as evident from the assessment order with the following reasoning-

“As the MEIS is granted as a percentage of export sales and export sales is accounted as revenue in nature. Hence, MEIS being an export incentive is also revenue in nature. Further, reliance is also placed in this regard on the decision of Hon’ble supreme in the case of Goetze (India) Ltd. v. Commissioner of Income Tax (284 ITR 323)

14.02 Aggrieved with the decision of the AO on the above issue, a ground is raised by the appellant in the present appeal. In support of additional claim to be admitted at any stage which was not made in the return of income, the appellant relied on the decision of the Hon’ble Supreme Court in the case of National Thermal Power Co. Limited v. CIT (1998) 229 ITR 383 (SC) wherein it was held that the eligible to raise claim before the Appellate Authorities and the Appellate Authorities are entitled to consider the new claims and adjudicate upon the same on merits of the case. The relevant portion of the said judgement is reproduced as under

5. Under section 254 of the Income-tax Act. 1961, the Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is, thus, expressed in the widest possible terms The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law if, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner (Appeals) Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier.

6. in the case of Jute Corpn of India Ltd. v. CIT [1991] 187 ITR 588, this Court, while dealing with the powers of the AAC, observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to there striations or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the AAC in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The AAC must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The AAC should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also.

7. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) takes loo narrow a view of the powers of the Tribunal vide eg. CIT. Anand Prasad (Delhi) CIT v. Karamchand Premchand (P) Ltd(1969) 74 ITR 254 (Guj) and CIT v. Cellulose Products of India Ltd.(1985) 151 ITR 499/11984) (G) (FB). Undoubtedly the Tribunal will have the discretion to allow or not allow a new ground to be raised But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.

8. The reframed question, therefore, is answered in the affirmative, ie the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits”

Further to the above, the appellant relied on the decision of Hon’ble Kolkata High Court in the case ofPr CIT, Central-t, Kolkata v. Ankit Metal & Power Ltd which rejects the plea of the Revenue that the AO is not having the power to admit an additional claim which was made otherwise than filing a revised return. The ratio decidendi of the case is as under-

28. The third issue involve in the instant appeal which requires adjudication is whether the action of Tribunal entertaining/allowing the claim which was made by the assessee before the Assessing Officer by filing a revised computation instead of filing a revised return since the time to file the revised return was lapsed for claiming to treat the incentive subsidies in question as capital receipts instead of revenue receipts as claimed in original return. The Assessing Officer had denied this claim. Revenue has attacked the order of the tribunal by relying on the decision in the case of Goetze (india) Ltd. (supra)

29. This case does not help the revenue/appellant in this case Supreme Court has made it clear that its decision was restricted to the power of the Assessing authority to entertain a claim for deduction otherwise than by a revised return, and did not impinge on the power of the Appellate Tribunal under Section 254 of the Income Tax Act, 1961 The Hon’ble Supreme Court in the said decision held as follows:

“In the circumstances of the case, we dismiss the Civil Appeal However, we make it clear that the issue in this case is limited to the power of the Assessing Authority and does not impinge on the power of the Income Tax Appellate Tribunal under Section 254 of the income Tax Act, 1961.”

29.1 This judgment was followed by our Court in the case of Britannia Industries Ltd (supra) holding that Tribunal has the power to entertain the claim of deduction not claimed before the Assessing Officer by filing revised return. Respectfully following the aforesaid decision as well as the view already taken by us in this case that the aforesaid subsidies are capital receipt and not an income and not liable to Tax Tribunal in exercise of its power under Section 254 of the Income Tax Act justified this claim though no revised return under Section 139 (5) of the Act was filed before the Assessing Officer. We answer both the question Nos. 1 and 2 in negative and in favour of assessee

30 Accordingly Appeal of the revenue is dismissed.

14.03 Further, the appellant has relied on its own case for the AY 2009-10 on similar circumstances though on a different issue regarding the admission of an additional ground of appeal to allow the claim of deduction regarding amount transferred to debentures redemption reserve while computing the book profits u/s 115.JB of the Act before the CIT(A) which was not raised before the AD. At the first appellate stage the CIT(A) has admitted the said additional ground. The relevant portion of the CIT(A) order is reproduced as under

10.3 I have carefully considered the matter. The issue involved je deduction of debenture redemption reserve from book profit computed under section 115JB is purely a question of law arising from fact on record. As such, there is nothing to suggest that omission of the same from the Appeal Memo was willful or unreasonable In case of CIT v. Gokuldas & Co (2007) 253 ITR 633 (Raj), it was held that the scheme of statue itself empowers first appellant authority to allow appellant before it go in hearing of appeal in to any ground not taken in the grounds of appeal and decide the same unless he is satisfied that failure to raise such ground was will full or unreason able and where there is material or evidence before assessing officer to support such claim. Further, such claim even if not raised before AO, if raised before the first appellate authority, he ought to consider and decide it, if he is satisfied about bonafides. It is not AO case that the omission of ground of appeal from Appeal Memo was willful or unreasonable. Additional ground of appeal therefore admitted”

14.04 The CIT(A) relied on several case laws wherein it was held that the powers of appellate commissioner being co-terminus with that of the AD the appellate authority can modify the assessment order on an additional ground even if it not raised before the AO and thus the CIT(A) has admitted the additional ground and decided the issue on merits in favour of the applicant. Further, it is also noted that the Revenue had appealed before Hon’ble ITAT against the decision of CIT(A) in admitting the additional ground on the above issue which was not a subject matter of discussion before the AO during the assessment proceedings. After having detailed discussion, the Hon’ble ITAT had confirmed the order of CIT(A) in admitting a new issue which was not a subject of discussion before the AO. Subsequently, ‘Revenue preferred an appeal before the Hon’ble High Court against the order of the ITAT It is pertinent to mention here that Revenue did not raise a ground on the issue of admissibility of additional ground by the CIT(A)/ITAT before the Hon’ble Gujarat High Court which was not found place in the assessment order of the AO. In view of the above, it may be concluded that Revenue has accepted the decision of the ITAT on the issue of admitting the additional grounds by the CIT(A) even on claim which was not made in the return of income Thus, as per the above discussions, the precedence on the same legal principle in the assessee’s own case for the earlier assessment year must be followed by admitting the additional ground of the appellant on a fresh claim made before the AD which was not made in the return of income Accordingly, the additional ground raised by the appellant to consider the receipt of export incentives as capital receipts is admitted and being adjudicating on merits

14.05 in admitting the additional claim which was not made in the return of income but filed with revised computation or made a fresh claim before the AO, the same shall be admitted by the authorities of Income Tax, being a quasi-judicial authority and to be decided on merit without dismissing the same summarily for the reason of the claim was not made in the return of income or through revising the return. To present its arguments, reliance was placed by the appellant on circular issued by the CBDT vide No. 14 (XL-35) dated 11.04 1955 and the respectfully following case laws presented by during appeal proceedings

SR. Koshti v. CIT [2005]276/TR165(Guj)

Thomas Kurian v. ACIT [2007/106/tD 158(Coch.)

DCIT v. CMSS ecuritas Ltd/ (Mumbai-Trib.)

Dilip Dharmsey Khatauv v. ITO(Mumbai-Trib.)

Chicago Pneumatic India Ltd v. DCIT[2007] 15 SOT 252(Mum.)

In my opinion, the reliance placed on Goetz India (SC) is not applicable to the facts of the case. If any inadvertent mistake made by the assessee by not claiming non-taxable item shown as taxable item in ITR would not entitle the Revenue to fax such items by relying on procedural lapses and technical parameters, when the law is not sanctioning taxing such item of receipt. Further, if the assessee is making a claim which was not finding place apparently in ITR or P&L A/c portion of ITR irrespective of the fact that the issue is related to a receipt or expenditure, the same cannot be allowed When the entire facts are readily available and apparent from the ITR/Audit Report filed with the Department before the case is taken up for scrutiny, then it is judicious decision to accept the claim for examination and decide the correctness of the claim of such item(s) as taxable or otherwise without adhering to the stringent principles of time limitations to make such claims insisting to file only through the revised return. Basically, in two circumstances in which the additional claims shall not be made- (i) the expenditure which was not routed through accounts as part of the return filing & (ii) new claims which are made only in the reassessment proceedings-initiated u/s 147. Thus when only a question of law involved which has to be decided based on all facts which are available on the record before taken up the case for scrutiny, there is no harm caused to the Revenue in considering such claim of the assessee and decide the issue whether exigible to tax or otherwise as per the applicable provisions of the law. The principle to be followed is no tax can be imposed/collected without sanction of the low. All the case laws submitted by the assessee in support of his pleas are examined and found that all those decisions are relevant to the facts of the case and guiding the lower appellate authorities to admit the question of law which was raised on the facts available on the record to decide the issue of nature of MEIS scrips for taxation purpose. Hence, the ground of appeal to treat the MEIS scrip as capital or revenue receipt is admitted for adjudication

14.06 Before adjudicating the issue of nature of export incentives as capital or revenue, a brief background of the Merchandise Exports from India Scheme(here after called MEIS)is to be seen, MEIS was introduced under the Foreign Trade Policy (2015-2020) with the objective of promoting the export of notified goods produced in India Earlier there were five different schemes for rewarding merchandise exports with different kinds of duty scrips/incentives/subsidies/duty drawbacks etc with varying conditions attached to their use. Later all these schemes have been merged into a single scheme, namely MEIS The MEIS aims to incentivize and support Indian exporters by providing them with assistance in the form of non-cash incentives which are typically received in the form of duty credit scrips. The same can be utilized for payment of customs duty or may be transferred to others. Them a in objective of providing these scrips under MEIS is to make the exporters competitive in global markets. The objective of the MEIS scheme from its formulation document is presented by the assessee as under-

“3.03 0bjective

Objective of Merchandise Exports from Indie Scheme (MEIS) is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced/manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness.”

This clearly shows the incentive is mainly aimed to built-up a robust infrastructure with an aim to meet international competition challenges to exports goods from India with ultimate goal of creating employment.

14.07 The appellant has also relied on several case laws in support of his claim that in order to determine the nature of incentives received as capital receipt or revenue receipt, it is necessary to evaluate the key objective or purpose for which MEIS Scheme has been introduced. It is pertinent here to mention that the classification of export incentive scrips as revenue or capital receipts depends on the nature and purpose of the receipt The appellant contended that the said incentives are received as part of the business activity of exports. By using scrips to pay duties and taxes, exporters could reduce their overall cost of production and improve competitiveness in the global market. The objective of primary said to be offset infrastructural in efficiencies and associated costs involved MEIS was exporting goods produced or manufactured in India, especially those having high export intensity. employment potential, and value addition and thus the rational with which the scheme was introduced is capital in nature, the incentives so received under the scheme should also to be treated as capital receipts. With the above submissions and placing reliance on some of the case laws (which will be discussed later in the order), the AR has requested to reduce the books profit admitted in the return of income to the extent of MEIS scrips recorded in the return of income as operating business revenue

14.08 To support the purpose test to decide a receipt as capital or revenue the Department and taxpayers knocked the doors of the Hon’ble courts both at High Court level and Supreme Court One of the cases where the Department pleaded before the Hon’ble Court of Kolkata on the similar issue to decide the taxability of the export incentives is here. The citation of the decision is Pr CIT, Central-1, Kolkata. Ankil Metal & Power Ltd.. Wherein, the Hon’ble High Court had discussed in detail the basis for treating nature of receipt into revenue or capital after considering the Apex Court decisions. The same is taken as guidance while deciding the appeal on hand. The appropriate portion of the decision of the Hon’ble High Court is extracted below-

19. We have heard both sides at length on the issues involved in the instant appeal considered their submission and perused the relevant record. The first issue which requires adjudication is whether incentives Interest subsidy’ and ‘Power subsidy received by the assessee under the schemes in question are capital receipt not liable to the taxed or ‘Revenue receipt and is liable to be taxed and the key question which arises for determination of this issue is what is the character of the incentive subsidies under the said schemes in question and in judging the character of incentives, the “purpose test” is a great factor.

20. On this issue decision in the case of Sahney Steel and Press Works Ltd. (supra) relied upon by the revenue is a leading decision on the test or determining the nature and character of a subsidy under any scheme as to when it is to be treated as ‘capital receipt or revenue receipt in the hands of the assessee and considering this decision of Sahney Steel & Press Works Ltd. (supra) another leading decision on this proposition of law is Ponni Sugars and Chemicals Ltd (supra) Law laid down in these two decisions have been uniformly followed in series of decisions of the Hon’ble Supreme Court our High Court and other High Courts which assessee has relied as referred above on this issue. The following paragraph of the judgment delivered by the Hon’ble Supreme Court in Pornni Sugars & Chemicals Ltd. (supra) case reads thus (page 400).

“The importance of the judgment of this court in Sahney Steel case lies in the fact that has discussed and analyzed the entire case law and it has laid down the basic test to be applied in judging the character of a subsidy That test is that the character of the receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is given. In other words, in such cases, one has to apply the purpose test. The point of time at which the subsidy is paid is not relevant. The source is immaterial. The form of subsidy is immaterial. The main eligibility condition in the scheme with which we are concerned in this case is that the incentive must be utilized for repayment of loans taken by the assessee to set up new units or for substantial expansion of existing units. On this aspect there is no dispute. If the object of the subsidy scheme was to enable the assessee to run the business more profit able then the receipt is on revenue account On the other hand, if the object of the assistance under the subsidy scheme was to enable the assessee to set up a new unit or to expand the existing unit then the receipt of the subsidy was on capital account. Therefore, it is the object for which the subsidy assistance is given which determines the nature of the incentive subsidy The form or the mechanism through which the subsidy is given are irrelevant”

21. A perusal of the judgments in Sahney Steel & Press Works Ltd (supra) and Ponni Sugars & Chemicals Ltd (supra) therefore, reveals that the apex court had applied the above quote dictum to determine the purpose, which the two schemes had intended to achieve by the incentive subsidies, permissible under the schemes in question in those cases

22. It was, therefore, in the context of respective subsidy incentive schemes in the two cases, that the subsidy in Satiney Steel & Press Works Ltd. (supra) was held to be revenue receipt whereas the subsidy in Ponni Sugars & Chemicals Ltd (supra) was held as capital receipt.”

23. On a careful look into these decisions it appears that the law is settled that the nature of incentives/subsidies granted by the Government under any Scheme to any enterprise would totally depend upon the salient features of the said Scheme The purpose for which the incentive/subsidy is given under the Scheme is the determining factor to lay down the nature of the incentive/subsidy. If an Incentive/subsidy is given as a general assistance to the assessee to carry on his business or trade, it would be an operational incentive and thus a trading receipt in the hands of the assessee. However, if the object of the subsidy, irrespective of its source, is to enable the assessee to acquire new plant and machinery or for further expansion of its manufacturing capacity or for setting up a new unit, the entire subsidy must be held to be a capital receipt. The incentives/subsidies, depending upon the purpose for which they are granted, fall under two categories namely:

(i)

Operational incentives/subsidies which are given to the assessee to carry on his business or trade and,

(ii)

Fixed capital incentives/subsidies which are given to the assessee to set up a new unit or to expand its existing unit.

24. On perusal of the contents of the relevant portion under the incentive subsidy schemes in question we found that in the case of the assessee, the State Government under the West Bengal Incentive Scheme, 2000, and “West Bengal Incentive to Power Intensive Industries Scheme, 2005, had actually granted the subsidy with the sale intention of setting up new industry and attracting private investment in the state of West Bengal in the specified areas in the present case Bankura which is industrially backward hence the same was of the nature of non-taxable Capital receipt. Thus, according to the purpose test laid out by the Hon’ble Supreme Court, various and High Courts including our Court the aforesaid subsidy should be treated as capital receipt in spite of the fact that computation of Power subsidy is based on the power consumed by the assessee. It is well established from submission of the assessee as enunciated above that once the purpose of a subsidy is established, the mode of computation is not relevant as held in the decisions of the Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. (supra), CIT v. Ponni sugars & Chemicals Ltd (supra) and the decision of our High Court in case of Rasoi Ltd. (supra) against which SLP has been dismissed. The mode of computation/form of subsidyis irrelevant The mode of giving incentive is re-imbursement of energy charges. The nature of subsidy depends on the purpose for which it is given Hence the assessee draws support from the decisions already discussed earlier as the same principle will apply here. Thus the entire reason behind receiving the subsidy is setting up of plant in the backward region of West Bengal, namely, Bankura”

In the case on hand the incentive is said to be given for improving the exiting infrastructural facilities or improve the processes to enhance the exports with an object to create employment and also earn valuable foreign exchange. Therefore, the stand taken by the AO to decide the nature of receipt es revenue, only based on the method of disbursal of incentives which are proportional to the value of exports made is not a purpose test as proposed by the Apex Court in cases of Sahney Steel & Press Warks Ltd (supra) and Ponni Sugars & Chemicals Ltd. (supra)

14.9 In addition to the above principle, the assessee made certain submissions based on the law applicable to the facts before us related to the receipts under MEIS Scrips in the present case, the appellant has claimed these incentives does not come under the purview of income u/s 2(24) of the Act as the scrips received by the appellant are not in the nature of subsidy, grant or cash incentive, duty drawback concession waiver or reimbursement To elaborate further, the appellant argued in the personal hearing that MEIS scrips received from Govt. are not falling under subsidy, grants, duly drawback, concession, waiver or reimbursement but it is only an incentive it is also explained that though the word incentive is used against the exports, it is not a cash incentive. The benefit accrued to the assessee in terms of MEIS scrips has been considered by the appellant as non-cash incentive and can be utilized only for the specific purposes of payment of import duty against the raw material and goods imported for its business. The contention of the assessee is that providing the scrips is to encourage the exports from the manufacturing unit by improving the infrastructural facilities and producing the quality of goods indirectly by way of reducing overall costs of the production and enhanced competitiveness by way of brand building for their products in the international market. The assessee assumes that the benefit accrues trough the monetary value of the scrips is expected to enhance the skills of the manpower engaged in the manufacturing, improving the quality of goods manufactured through better imported precision machinery, adopting globally accepted standards in export goods to earn the valuable foreign exchange. To increase the exports, a robust system of physical infrastructure and high standards of human resources to meet the stringent norms of developed countries drug administrations shall be built up over a period of time. Due to this it is presented that the non-cash incentives to encourage exports from India are not given to carry the business of the assessee but provided to encourage the industries to build-up the manufacturing facilities at international Standards Such non-cash incentives cannot be treated as revenue receipts. Thus, it is explained by the appellant that non-cash incentives cannot be fit into the definition of income u/s 2(24)(xvi) of the Act and requested to treat the MEIS scrips as capital receipts and exclude the same from the total receipts erroneously reported as revenue of the year in the rectum of income. The appellant also explained in detail the incentives received against the exports under MEIS Scheme are the rewards for the achievement rather to categorise the same under subsidy, grant assistance or cash-incentive or duty draw back or waiver or concession or reimbursement of expenditure by taking the dictionary meaning of all these terms since the same are not defined in the Act but important in deciding the nature of the export incentive receipts I am in complete agreement with the appellant that the value of MEIS Scrips is nothing but a reward which is not taxable as income since the same is not falling under the definition of Sec 2(24)(xvi) or Sec. 28 of the Act. Due to this, though the receipts under the MEIS scrips are connected to the business carried on by the assessee company, those receipts cannot be said to be revenue receipt & taxable receipts. Thus, the receipts under MEIS scrips received against the exports made from India are treated as capital in nature and not subjected to tax for the AY 2018-19. Accordingly, the ground of appeal to treat the MEIS scrips as capital receipts is allowed.

14.10 The above discussion is pertaining to the normal computation and the effect of the above decision on the computation of book profit u/s 115JB to be taken up now in the subsequent paragraphs.

14.11 The assessee company raised an issue of correctness of taxing the MEIS Scripts as revenue receipt for the purpose of computing the book profit u/s 115JB of the Act. The AR of the assessee-company submitted that when the value of the scrips is not an income under normal provisions of the Act, the same cannot be made taxable in computing book profit u/s 115JB of the Act. The AR has following argument in support of his contention:-

“Once & is accepted that the export incentives under MEIS Scrips are not income within the meaning of section 2(24) of the Act the same cannot also form part of the total income or be subjected to tax under section 115JB of the Act. He submits That the subject matter of taxation under the Act is “income” The charging section 4 of the Act provides for levy of tax in respect of “Total Income” “Total Income” is defined in section 2(45) of the Act to mean “the total amount of income referred to in section 5. computed in the manner laid down in this Act. The material portion of section 5 reads 31 “5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes, all income from whatever source derived which” Thus, the “Total Income” in the relevant assessment year consists of all items of Income” as defined in clause (24) of section 2 of the Act, 1961 He submits that what can be taxed under section 115JB of the Act is the “Total income” which is income as defined in section 2(24) of the Act and non-cash incentive is outside the purview of the Act in relevant assessment year and cannot form subject matter of the charge of tax under section 4, cannot form part of “Total income” and cannot be subjected to fax either under the normal computation provisions or under section 115JB of the Act. The absence of provision in section 115JB of the Act for exclusion of such capital receipt credited to the profit and loss account cannot result in its taxation.”

14.12 Even if the export incentives under MEIS Scrips are considered as capital receipts, the question would arise that whether the AO is empowered to modify the book profits u/s 115JB of the Act. The book profit is derived from the net profit shown in the profit and loss account prepared as per Schedule III of the Companies Act. 2013. If in case, the AC finds that the profit and loss account has not been prepared in accordance with the accounting standards or the Companies Act, the AD can only make specific adjustments. These include certain adjustments in the form of

(a) Increase by Provision for unascertained liabilities, provisions for diminution in the value of assets, deferred tax, etc.

(b) Reduced by Amount withdrawn from reserves provisions etc. if credited to the profit and loss account etc.

As per the provisions of Sec 115JB of the Act, the AO has limited power of making adjustment i.e., either to increase or decrease the net profit disclosed by the assessee to the extent provided for in Explanation to Sec 115JB of the Act. It was brought to the notice of the AR that the AO has no power to make adjustment other than entailed in the sec. 115JB of the Act during the discussion of personal hearing. With respect to the above view, the AR attention was drawn towards the decision of the High Court in the case of Apollo Tyres Ltd. v. CIT (2002) 255 ITR 273 (SC) which reads as under:-

“The Assessing Officer while computing the income under section 115J of the Act has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has limited power of making put additions and reductions as provided for in the Explanation to the said section. To differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J”

14.13 Responding to the above query, the appellant had submitted recent decisions which were distinguished the Apollo Tyres Ltd (supra) by various High Courts and of ITATS on the impugned issue of powers of the Incometax Authority to tweak with the book results if there are errors found in profit statement of the assessee company. The relevant decisions are discussed m subsequent part of this order

14.14 In the case of Pr. CIT. Central-1, Kolkata v. Ankit Metal & Power Ltd., regarding the capital receipts received which was not claimed in the return of income or filing the revised return by reducing the returned income u/s 115JB of the Act can be claimed by the assessee before the AO by way of filing the revised computation. In the order, the Hon’ble High Court had distinguished the decision of the Apex Court in the case ofApollo Tyres Ltd. v. CIT ITR 273 (SC) slating that a receipt is not in the character of income, it cannot form part of the book profit”. The relevant portion of the decision is reproduced below for ready reference-

“26. Now the second issue which requires adjudication is as to whether the aforesaid incentive subsidies received by the assessee from the Government of West Bengal under the schemes in question are to be included for the purpose of computation of book profit under Section 115 JB of the Income Tax Act 1961 as contended by the revenue by relying on the decision in the case of Appollo Tyres Ltd (supra)

27. In this case since we have already held that in relevant assessmentyear2010-11thaincentives’Interestsubsidy and Power subsidy’ is a ‘capital receipt and does not fall within the definition of “Income’ under Section 2(24) of Income Tax Act 1961 and when a receipt is no ton in the character of income it cannot form part of the book profit under Section 115JB of the Act, 1961. In the case of Appollo Tyres Ltd. (supra) the income in question was taxable but was exempt under a specific provision of the Act as such it was to be included as a part of the book profit. But where a receipt is not in the nature of income at all it cannot be included in book profit for the purpose of computation under Section 115JB of the Income Tax Act, 1961. For the aforesaid reason, we hold that the interest and power subsidy under the schemes in question would have to be excluded while computing book profit under Section 115 JB of the income Tax Act, 1961

14.15 Regarding non-applicability of the decision in case of Apoilo Tyres Ltd. v. CIT [2002] 255 ITR 273 (SC) regarding the limitation of powers of the AO in altering the statement of profit reported as per the Schedule III of the Companies Act, 2013 (18 of 2013), the AR relied on a case law on the issue distinguishing the decision of the Apex Court which states that before examining the correctness of the computation of arriving the book profit uls 115JB of the Act, it is the role of the AO to check whether the financial statements are prepared in accordance with the provisions of Schedule-ill to the Companies Act, 2013. The AR says that if the statement of profit is not prepared in terms of Sec. 115JB(2)(a) of the Act the same has to be modified in line with the mandated direction in accordance with the Schedule-ill to the Companies Act, 2013 To support his view, the discussion taken place and decision given by the Hon’ble ITAT, Mumbai on the similar issue in the case JSW Steel Ltd v. ACIT, Circle 11(5) Bangalore (Mumbai-Trib) is relied on by the appellant. For the ready reference, relevant portion of the decision is extracted as under-

xxxxxxxxxxxxxxxxxxxxxxxxxxx

14.16 On careful reading of the above decisions. I am convinced with the argument of the assessee that the AO had to tax the income with the express provisions of the Act and when there is a mistake crept in the determination of profit as per the Schedule-ill to the Companies Act, 2013, and such mistake is brought to the notice of the AO by the assessee or found by the AO suo-matto whether it is having the effect of increasing or decreasing the profit, the same needs to be carried out & determine the tax chargeable on correct income The right action expected from the tax administration is to determine & collect the tax in accordance with the law and the action of the AD shall not lead to losing the revenue by ignoring the incorrect computations or charging more tax on inadvertent & genuine mistakes of the taxpayers. In support of the above conclusion, a decision of the Punjab & Haryana High Court is relied on. Though the decision relied on below is in favour of Revenue the underlying principle regarding AO’s power to modify the book profit reported by the assessee under companies Act is given below-

In case of CIT-1, Ludhiana v Oswal Sugar Ltd (Punjab & Haryana), the Hon’ble High Court distinguished the decision of the Apex Court in the case of Apollo Tyres Ltd. v. CIT 1TR 273(SC) about the powers of the AO to set night the mistakes committed by the assessee in preparing the books of account of the assessee company and assess the correct income by making modification to the profit reported as per the companies Act. The relevant portion of the decision of the Hon’ble Punjab & Haryana High Court in this case is extracted below for ready reference-

“3. Learned counsel for the revenue submitted that the assessee had claimed a sum of Rs. 2.00,42,333/- as expenses on account of lease rent for the assessment years 1995-96 and 1996-97 which was charged to the Profit and Loss account. According to the counsel, the same was inadmissible while calculating deemed income under Section 115JA of the Act for purposes of determining the faxable income for the current assessment year. It was submitted that the claim of lease rent as deduction in respect of lease rent relating to the assessment years 1995-95 and 1996-97 in the current assessment year 1997-98 was not admissible in Parts !! and Ill to the 6th Schedule of the Companies Act 1956 (in short, “The Companies Act”) Once that was so, It was urged that the assessing authority was entitled to recast the profit and loss account in accordance with the and thereafter recompute the profit under Section 115 JA of the Act.

Relying upon the judgment of the Kerala High Court in Sree Bhagawathy Textiles Ltd. v. Asstt. CITITR 244, it was contended that expenses of prior period were not deductible while computing the book profits under Section 115JA of the Act. Learned counsel argued that the Tribunal has primarily decided the issue against the revenue by placing reliance on Apex Court decision in Apollo Tyres Ltd. v. CIT ITR 273 which was clearly discussed and distinguished by the Kerala High Court in the aforesaid decision.

4. On the other hand, learned counsel for the assessee relying upon the decision of the Apex Court in Apollo Tyres Ltd’s case (supra) submitted that once the profit and loss account was drawn on the basis of Parts Il and ill to the 6th Schedule of the Companies Act, the Assessing officer was not entitled to recast the same in view of the aforesaid decision of the Apex Court. The order passed by the Tribunal was, thus supported by the counsel for the assessee

5. After giving thoughtful consideration to the respective submissions made by learned counsel for the parties, we find that the Tribunal was not right in deciding the issue in favour of the assessee on the basis of the judgment of the Apex court in Apollo Tyres Ltd’s case (supra). The said judgment is distinguishable and is not applicable m the facts and circumstances of the present case.

6. In the present case, the assessee had claimed deduction in respect of lease rent relating to the assessment years 1995-96 and 1996-97 during the current assessment year 1997-98 The same was not covered in Parts Il and III to the 6th Schedule to the Companies Act. The Assessing Officer is entitled to recast the book profits as it is implied mandate which is given to the Assessing Officer to verify and satisfy himself whether the profit as shown in the Profit and Loss account is prepared in accordance with Parts II and ill to the 6th Schedule of the Companies Act Wherever the Assessing Officer finds that the profit is not determined in the profit and loss account in accordance with the aforesaid Schedule he is required to adjust the profit. Further the deduction as claimed by the assessee is not covered by any of Clauses (1) to (ix) of Explanation to Section 115JA of the Act. Once that is so the Tribunal was in error in applying the ratio laid down by the Apex Court in Apollo Tyres Ltd ‘s case (supra)”

14.17 Subjected to the above discussion, it is concluded that the receipts under MEIS Scrips is considered as capital receipts for normal computation of income and also for the computation of book profits u/s115JB of the Act. Accordingly, the AD is directed to allow the fresh claim made before him during the assessment to exclude the value of MEIS Scrips which was not made in there turn of income or through revised return but claim filed only through are vised computation/claim request made Due to the above said decision, the ground no. 3 of appeal raised on the above said issue is allowed.”

8.4.2 Further during the appellate proceedings, the appellant has also placed reliance on recent decision of Tribunal, Chennai Bench in case of Eastman Exports Global Clothing (P) Ltd (ITA Nos. 3326/Chny/2019 & 316/Chny/2024, order dated 20.09.2024 wherein the Tribunal has held that export incentive received under Merchandise Exports from India Scheme (‘MEIS scheme’) is a capital receipts and is not an income within the meaning of section 2(24) (xvili) of the Act.

8.4.3 Similarly in case of Container Corporation of India Ltd. v. Deputy Commissioner of Income-tax-(Delhi – Trib.) it was held that Credit under ‘Served From India Scheme’ [SFIS] given to assessee did not constitute taxable income of assessee, as SFIS credit could be utilized only against purchase of goods and to set off a portion of excise duty.

8.4.4 Further in Patanjali Foods Ltd. [2024](Mumbai – Trib.) it was held that Section 4 read with section 115JB, of the Income-Tax Act 1961-Income Chargeable as (Subsidy) Assessment year 2012-13 Assessee was in receipt of incentives under Focus Product Scheme (FPS) and Vishesh Krishi and Gram Udyog Yojna (VKGUY) under Foreign Trade Policy of Government of India These incentives were granted by Government for exploring potentially new markets from a long-term prospective to enhance India’s export potential in international market and generate employment opportunities and it was not granted to meet any cost of expenditure incurred by assessee to make exports Whether subsidies received by assessee was in nature of capital receipt and not liable to tax – Held, yes [Para 8 to 8.5].

8.4.5 As per the above discussion and relying upon decision of Chennai, Delhi and Mumbai ITAT and CIT(A)’s order for AY 18-19 & AY 20-21 in appellant’s own case, the AO is directed to grant relief to the appellant on the issue of export incentives received under MEIS Scrips of Rs.59,79,85,415/-as capital receipts and reduce the amount of such incentives in computing the total income under normal computation and also while determining the book profits u/s 115JB of the Act. Accordingly, the ground no 5 raised in the appeal is allowed.”

5. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal.

6. We have heard the rival contentions and perused the material available on record. We find that the issue of Corporate Guarantee Fee stands settled by the orders of the Co-ordinate Benches of the Tribunal for AY 2015-16, AY 2016-17, AY 2018-19 & AY 2015-16 in assessee’s own case. In the absence of any change in the factual matrix and legal preposition, we decline to interfere with the order of the Ld. CIT(A).

7. With regard to MEIS, we find that the issue stands adjudicated by the orders of the Co-ordinate Benches of the Tribunal for AY 18-19 & AY 20-21 in assessee’s own case. Further reliance is being placed on the following judgments of the Hon’ble Apex Court:-

(a)

Shree Balaji Alloys v. Commissioner of Income-Tax;

(b)

CIT v. Ponni Sugars and Chemicals Ltd. (2008);

In the absence of any change in the factual matrix and legal preposition, we decline to interfere with the order of the Ld. CIT(A).

8. In the result, the appeal of the Revenue is dismissed.