Gail (India) Ltd. Vs DCIT (ITAT Delhi)

INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “C”: NEW DELHI
(Through Video Conferencing)

BEFORE
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND
MS. MADHUMITA ROY, JUDICIAL MEMBER

ITA No. 4657/Del/2014
Asstt. Year 1997-98

GAIL (India) Ltd.
Mr. L.R. Gupta ED(F&A),
Gail (India) Limited,
16, Bhikaji Cama Place
New Delhi – 110 066
PAN AAACG1209J
(Appellant) 

Vs. 

DCIT LTU New Delhi.
(Respondent)

ITA No. 5091/Del/2014
Asstt. Year 1997-98
DCIT (LTU)
NBCC Plaza,
Pushp Vihar.
Sector –III
New Delhi – 110 017
(Appellant) 

Vs. 

Gail (India) Ltd.
16, Bhikaji Cama Place,
New Delhi – 110 066
PAN AAACG1209J
(Respondent)

Assessee by: Shri Rohit Jain, Advocate
Ms. Deepashree Rao,
Shri Vibhu Gupta, CA
Department by : Ms. Sunita Singh, CIT(DR)
Date of Hearing 23.11.2020
Date of pronouncement 26.11.2020

O R D E R

PER N.K. BILLAIYA, AM

ITA No. 4657/Del/ 2014 and ITA No. 5091 Del 2014 are cross appeals by the assessee and the revenue preferred against the order of the CIT(A)-LTU, New Delhi dated 30.06.2014 pertaining to assessment year 1997-98. Both these appeals were heard together and are disposed of by this common order for the sake of convenience and brevity.

2. We will first address to the appeal of the assesee in ITA No. 4657/D/2014. The grievance of the assesee read as under :-

1. That the Commissioner of Income-tax (Appeals) (CIT(A)) erred on facts and in law in holding that “Lean gas” is manufactured/ produced only at the two LPG Plants at Vaghodia (Gujarat) and Vijaipur (MP) for the purpose of allowing deduction under sections 801/ 801A of the Income-tax Act, 1961 (“the Act”) and not at various customer terminals, as claimed by the appellant following the order of CIT (A)for the preceding assessment year. 

1.1 That on facts and circumstances of the case and in law, the CIT(A) erred inholding that the activities undertaken by the appellant at its customer terminals did not constitute “manufacture or production of any article or thing”, so as to be eligible for deduction under sections 801, 80IA and 80HH of the Act.

1.2 That on the facts and circumstances of the case and in law, the CIT(A) erred in not appreciating that the various activities/ processes undertaken  by the appellant, including removal of impurities, condensate and moisture and for regulating temperature and pressure at various customer terminals, as part of mandatory contractual obligations, in order to render lean gas in usable state and tradable condition, constituted “manufacture”/ “production” of processed “Lean Gas”.

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