JUDGMENT

Akil Kureshi, J. - The appeal is filed by the revenue to challenge the judgment of the Income Tax Appellate Tribunal. Following questions are raised for our consideration:

"(a) Whether on the facts and in circumstances of case as well as in law, Tribunal was right in deleting addition made to tune of Rs. 3,39,95,000/on account of payment made by assessee to S. K. Gupta and his group of companies ignoring the facts of the case, including the incapacity of Shri S.K.Gupta to render such services, as also the spontaneous statement given by him at the time of search?

(b) Whether ITAT was correct in holding a divergent view in the assessee''s case when the coordinate bench at Delhi, under the same fact, upheld the disallowance in the case of Link Engineers Pvt. Ltd.?

(c) Whether, on the facts and in the circumstances of the case and in law, the ld. Tribunal was right in upholding the decision of the ld.CIT(A) who had deleted the addition made by the then AO by restricting the deduction under section 80IA at Rs. 48,76,82,681/as against Rs. 131,43,30,575/claimed by the assessee?"

2. Question Nos.1 and 2 are elements of the same issue and relate to the addition of Rs. 3.39 crores (rounded off) made by the Assessing Officer by disallowing expenditure of the said sum incurred by the respondent assessee in form of payments to one Shri S.K. Gupta. The Assessing Officer on the basis of statement of said Shri Gupta recorded during search operations held that the said person had not rendered any service to the assesseecompany so as to receive such payments. CIT (Appeals) however deleted the addition interalia on the grounds that Shri S.K.Gupta had retracted the statement recorded during search, that the assesseecompany had pointed out range of services provided by Shri Gupta and that the Assessing Officer had no other material to disallow the expenditure. The Tribunal in further appeal by the revenue confirmed the view of the CIT (Appeals) independently coming to the conclusion that the Assessing Officer was not justified in making the addition. It was noted that Shri Gupta retracted his statements within a short time by filing an affidavit. Subsequently, his further statement was recorded in which he also reiterated the stand taken in affidavit. The Tribunal also referred to the decision in case of the DCIT v. M/s Link Engineers Private Limited (ITA No.968 & 2248/Del/2011) in whose case also a similar issue of genuineness of payment to Shri S.K. Gupta had come up for consideration. The Tribunal noted that in such a case also the Tribunal had held in favour of the assessee.

3. Having heard learned counsel for the parties and having perused documents on record, we notice that the entire issue is based on the appreciation of materials on record. CIT (Appeals) and the Tribunal concurrently held that there was sufficient evidence justifying the payment to Shri S.K.Gupta, a Consultant and that the Assessing Officer other than relying upon the retracted statements of Shri Gupta recorded in search, had no independent material to make the additions. No question of law arises.

4. Question (c) pertains to the dispute between the department and the assessee regarding the rate at which the electricity generated by one unit of the assesseecompany and provided to the another be valued. The assessee contended that such valuation should be at the rate at which the electricity distribution companies are allowed to supply electricity to the consumers. The revenue on the other hand argues that the appropriate rate should be the rate at which the electricity is purchased by the distribution companies from the electricity generating companies.

5. This controversy arose in the background of the fact that the assessee had set up a captive power generating unit and claimed deduction under Section 80IA of the Income Tax Act, 1961 ("the Act" for short) in respect of the profits arising out of such activity. Obviously, therefore the attempt on the part of the a