1. By this petition filed u/s 34 of the Arbitration and Conciliation Act, 1996 (for short “the said Arbitration Act”), the petitioner has impugned the arbitral award dated 26.6.2012 and additional award dated 3.9.2012 allowing the claim made by the respondent. Some of the relevant facts for the purpose of deciding this petition are as under:-

2. On 30.4.1987, the petitioner placed an order on Bharat Heavy Electricals Ltd. (BHEL) for supply of a Turbine Unit of Cogeneration Plant for generation of electricity for its fertilizer plant which was supplied by the said company and was commissioned in the year 1989. It is the case of the petitioner that on 1.4.1990, the written down value of the said Turbine Unit in the books of the petitioner was “zero.”

3. On 27.9.1994, the petitioner addressed a letter to M/s. Tata Finance Ltd. offering it to take lease finance for one Co-generation Unit. On 28.9.1994, M/s. Tata Finance Ltd. sanctioned finance to the petitioner and the petitioner signed a letter of finance. On 28.9.1994, the petitioner raised an invoice of Rs.16,85,25,000/-. On the same day, M/s. Tata Finance Ltd. paid the petitioner a sum of Rs.16,85,25,000/- deducting Rs.41,89,110/- towards Lease Management Fee and towards Lease Rent for September 1994. On 28.9.1994, the petitioner and he said M/s. Tata Finance Ltd. entered into an agreement for Lease. Under the said agreement for Lease, lease rental was fixed at Rs.25,03,860/- which was calculated on the basis of Rs.14.15 (Per Month Per Thousand). On 28.9.1994, the Lease Summary Schedule was issued to the petitioner indicating the lease value and tenure.

4. The said M/s. Tata Finance Ltd. also issued Supplemental Lease Schedule on 28.9.1994 and issued a Debit Note for Rs.16,85,250/-. The petitioner confirmed having sold an asset covered by Invoice No.TF/94. It was the case of the petitioner that it was a financial transaction and the Turbine Unit of Co-generation Plant which was an immovable property and was never to be moved from the factory premises of the petitioner. On 30.3.1995, a certificate was issued by the Chartered Accountant of M/s. Tata Finance Ltd. certifying that the equipment was in working condition. On 25.7.1997, the lease tax was reduced from 5% to 4%.

5. M/s. Tata Finance Ltd. claimed depreciation in respect of the said plant in their Income Tax Returns for the year ending 31.3.1995 for the assessment year 1995-1996. On 31.3.1998, the Deputy Commissioner of Income Tax passed an order of assessment in respect of the return filed by the said M/s. Tata Finance Ltd. for the assessment year 1995-96 disallowing the depreciation. On 31.3.1998, the Income Tax Authorities issued a Demand Notice upon the said M/s. Tata Finance Ltd. under Section 156 of the Income Tax Act which notice was received by the said M/s. Tata Finance Ltd. on 1.4.1998. On 24.4.1998, the said M/s. Tata Finance Ltd. filed an appeal against the order passed by the Income Tax Authorities on 31.3.1998.

6. In the month of April 2000, lease tax was increased from 4% to 4.4%. On 11.10.2000 the said M/s. Tata Finance Ltd. raised a Debit Note for Rs.24,60,83,090/- claiming it to be tax liability on account of disallowance of depreciation for the assessment year 1995-96. On 16.2.2001, the Commissioner of Income Tax (Appeals) partly allowed the appeal filed by M/s. Tata Finance Ltd.

7. It is the case of the respondent that by a letter dated 22.3.2001 issued to the said M/s. Tata Finance Ltd., the petitioner had asked for various details and copies of assessment order etc. A copy of the letter dated 22.3.2001 was not produced in the arbitration proceedings by any of the parties. The respondent replied to the said letter by their letter dated 29.3.2001 and forwarded copy of assessment order dated 31.3.1998 and appeal memo. The said M/s. Tata Finance Ltd. also forwarded a Debit Note dated 11.10.2000. On 10.5.2001, the Tata Finance Ltd. filed an appeal before the Income Tax Appellate Tribunal. On 1.6.2001,