PCIT Vs NTPC Vidyut Vyapar Nigam Ltd. (Delhi High Court)
Delhi High Court held that no addition on account of sale of fly ash since the entire sale proceeds of fly ash were deposited in a fly ash utilization fund and the said funds were to be spent only in accordance with directions issued by Government.
Facts- The respondent [Assessee] is a public sector company and a wholly owned subsidiary of National Thermal Power Corporation Limited [NTPC]. The Assessee is, inter alia, engaged in the business of trading energy. During the relevant year, it was also engaged in trading fly ash and related products.
Post assessment proceedings, the PCIT invoked the provisions of Section 263 of the Act and made a further addition of ₹42,16,04,786/- on account of sale of fly ash and cenosphere. ITAT allowed the appeal of the assessee. Being aggrieved, the present writ is filed by the revenue.
Conclusion- Held that there is no question of the Assessee having earned any income. The fly ash did not belong to the Assessee, but to its holding company – The Assessee had only sold the fly ash and utilized part of the funds as mandated and made over the balance funds to NTPC.
