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7.0 Post survey proceedings, Revenue is disputing the eligibility of such claim u/s 80IA. Since decision on the said claim for AY 2019-20 is before your Honours, it is our duty to bring Revenue's contentions before this Hon'ble Bench. The above claims have already been adjudicated by the Hon'ble Tribunal post the aforesaid Survey Proceedings while disposing off the appeals for AY 2015-16 to AY 2018-19 and allowed after considering relevant facts and also decision of Hon'ble ITAT for earlier years. The eligibility of Solid Waste Management System has also been duly considered by the Hon'ble Tribunal at Para No. 78 to 79 at Pg 63-64 of its Order dated 21-02-2024 in ITA No. 489/JPR/23 for AY 2015-16. Further, Department vide Order u/s 143(3) for AY 2013-14 dated 16-12-2014 which is the first year of eligibility of claim of SWMS, had looked into this claim in great detail, including scrutiny of all the activities being carried out by this facility. In addition to the verification of the activities, AO has also verified its interlinkage with the cement manufacturing operations and computed detailed functional analysis and functional split between the SWMS facility and the cement operations [Refer Pg 11-18 of the Assessment Order at Pg 16-18 for detailed operations and functions performed by the SWMS as analysed by Department]. It is humbly submitted that in the aforesaid assessment order for AY 2013-14, because of the interlinkage of the facility with the cement unit the department disallowed the partial claim by applying Profit Split Method (PSM) resulting into splitting the total profit from the Shree Cement Limited vs. ACIT said activity into profit attributable to above eligible facility and profit attributable to cement unit. The appellant duly accepted the above methodology and did not dispute the same before the appellate authorities only because the same was correct and as per the law.

Vide additional ground no. 2 the ld. AR of the assessee submitted that direction be given to allow the claim of deduction u/s 80IA on eligible solid waste management system as per Form no. 10CCB filed as the said claim is also covered by the decision of this co-ordinate bench for A. Y. 2015-16 Shree Cement Limited vs. ACIT to 2018-19. While arguing that ground he additionally bring on record the fact that a survey was carried out at the premises of the assessee - appellant in June 2023. During the survey, the team visited the plants located at Beawar, Ras, Nawalgarh in Rajasthan & Panipat in Haryana, looked into the business operations of the appellant and took statements of few of the employees in relation to deduction claimed u/s 80-IA by the company in respect of its Solid Waste Management Systems (SWMS). The said deductions are being claimed from A.Y. 2013-14 onwards which had been subjected to scrutiny proceedings u/s 143(3) by the AO as well as by TPO in all the years. The same has also been subjected to litigation before the appellate authorities including before this Hon'ble Tribunal as well. While submitting so he also stated that the deductions under Chapter VIA for SWMS is already under sunset effective from 01-04-2017 and no new tax holiday are available to new SWMS set up thereafter. Revenue in post survey proceedings disputing the eligibility of such claim u/s 80IA. Since the issue on the said claim for A.Y. 2019-20 is under consideration he stated the contention raised by the revenue and his reply on it. He stated that the above claims have already been adjudicated by the Hon'ble Tribunal post survey Proceedings while disposing off the appeals for AY 2015-16 to AY 2018-19 and allowed after considering relevant facts. He also submitted Shree Cement Limited vs. ACIT that the eligibility of Solid Waste Management System has also been duly considered vide Para No. 78 to 79 at Pg 63-64 of the order of this tribunal dated 21-02-2024 in ITA No. 489/JPR/23 for AY 2015-16. Further, Department vide Order u/s 143(3) for AY 2013-14 dated 16-12-2014 which was the first year of eligibility of claim of SWMS, had looked into this claim in greater detail, including scrutiny of all the activities being carried out by this facility. In addition to the verification of the activities, AO has also verified its interlinkage with the cement manufacturing operations and computed detailed functional analysis and functional split between the SWMS facility and the cement operations [Refer Pg 11-18 of the Assessment Order at Pg 16-18 for detailed operations and functions performed by the SWMS as analyzed by Department]. Therefore, the assessment order for AY 2013-14, because of the interlinkage of the facility with the cement unit the department disallowed the partial claim by applying Profit Split Method (PSM) resulting into splitting the total profit from the said activity into profit attributable to above eligible facility and profit attributable to cement unit. The appellant duly accepted the above methodology and did not dispute the same before the appellate authorities only because the same was correct and as per the law. He also relied on a detailed distinguishable note on the issue raised by the revenue as filed.

16. The additional ground no. 2 raised deals with the allowance of claim of deduction u/s 80-IA on account of Solid Waste Management System [SWMS].

16.1 The brief facts related to the issue are that during the year, the appellant vide Form 10CCB filed along with the return of income have claimed deduction u/s 80-IA amounting to Rs. 769.50 Crs. w.r.t. eligible Solid Waste Management System (SWMS-Fly Ash) based on Profit Split Method (PSM), taking ~79% of the profits as attributable to SWMS based on Shree Cement Limited vs. ACIT FAR analysis carried out by the appellant. The same has also been reported in the Transfer Pricing Certificate in Form 3CEB filed along with the return of income. However, in the Tax Audit Report filed by the Tax Auditor reported an amount of Rs. 142.66 Crs. w.r.t claim u/s 80-IA in respect to SWMS (Fly ash) computing the Deduction based on stand taken by the Revenue in Transfer Pricing Order for AY 2014-15, where Cost Plus Method (CPM) was adopted by the TPO. The Tax Auditor in his report, while reporting the claim of Deduction u/s 80IA on SWMS (Fly ash) of Rs. 142.66 Crs. stated that the said claim may be modified to Rs. 769.50 Crs. in case the PSM method adopted by the appellant in respect to claim of SWMS (Fly ash) is upheld by the appellate authorities in earlier years. Accordingly, the appellant while filing of return of income had adopted a conservative approach and restricted the claim of deduction u/s 80-IA on solid waste management system (Fly Ash) to Rs. 142.66 Crs. in the computation of total income based on the stand taken by TPO in earlier years with balance claim of Rs. 626.84 Crs duly made in Form 10CCB read along with Notes to Tax Audit Report read along with notes forming part of Return of Income which has been placed on record by the appellant in the Paper book filed before this Bench.

v) He also submitted that in that assessment proceeding ld. AO not only verified the claim but he has because of the interlinkage of the facility with the cement unit the department disallowed the partial claim by applying the profit split Method [ PSM ] resulting into profit attributable to cement unit. The assessee - appellant duly accepted the above methodology and did not dispute the same before the appellate authorities only because the same was considered in accordance with the law and thereby not challenged that adjustment.