Generation Corporation Circle 1(1) Ltd Hyderabad Hyderabad PAN:AACCA2734J (Appellant) (Respondent) Assessee by: Shri M.Chandramouleswara Rao, C.A Revenue by: Shri Jeevan Lal Lavidiya, CIT (DR) Date of hearing: 01/11/2022 Date of pronouncement: 02/11/2022 ORDER Per R.K. Panda, A.M ITA No.236/Hyd/2016 filed by the assessee is directed against the order dated 18.12.2014 passed u/s 263 by the learned CIT1 Hyderabad relating to A.Y 201011. ITA No.75/Hyd/2018 filed by the assessee is directed against the order dated 31.7.2017 passed by the learned CIT (A)1 Hyderabad relating to A.Y 201011. For the sake of convenience, both these appeals were heard together and are being disposed of by this common order. ITA No.236/Hyd/2016 2. There is a delay of 375 days in filing of this appeal by the assessee for which the assessee has filed a condonation Page 1 of 21 ITA Nos 236 OF 2016 AND 75 OF 2018 AP Power Generation Corporation application along with an affidavit explaining the reasons for such delay. The reason given in the condonation application filed along with the affidavit is that at the time of receipt of the order, there was a lull and the administration of the assessee company came to a standstill and lot of confusions were prevailing due to the division of the State of A/P and dispute in the division of employees of the company and agitations all around. After considering the contents of the condonation application filed along with the affidavit and after hearing both the sides, the delay in filing of this appeal by the assessee is condoned and the appeal is admitted for adjudication. 3. Facts of the case, in brief, are that the assessee is a State PSU engaged in power generation, filed its return of income on 28.09.2010 declaring total income at Nil under the normal provisions and Rs.484,74,65,032/ u/s 115JB of the I.T. Act. The Assessing Officer passed the order u/s 143(3) on 28.3.2013 determining the taxable income at Nil and book profit u/s 115JB at Rs. 484,74,65,032/. 3.1 Subsequently, the learned CIT examined the records and noted that the Assessing Officer completed the assessment without properly examining the following issues: (i) The assessee has debited an amount of Rs.24.55 Crores in P& L A/c towards misc. losses and provisions. This amount includes Rs. 87,30,955/ toward provision for bad and doubtful debts. Since these provisions are not allowable expenditure, the same is required to be verified and decided accordingly. Page 2 of 21 ITA Nos 236 OF 2016 AND 75 OF 2018 AP Power Generation Corporation (ii) The assessee in the computation of income statement u/s 115JB(working sheet to form 29B) has taken the book profit at Rs.28866.02 lakhs and derived income of Rs.484,74,65,032 u/s 115JB as against Rs.51008.45 lakhs. This resulted in short Computation of income and hence required to be corrected. (iii) It is noticed that the assessee has debited an amount Rs.24.55 Crores in P& L A/c towards 'misc. losses and provisions'. This amount includes Rs.15,03,01,740/ and Rs.3,43,45,409/towards, obsolescence of stores etc. and 'loss on sale of scarp' respectively. As the assessee is having the scarp account separately, the obsolescence of store account needs to be transferred to scarp account and scarp receipts thereof, if any needs to be offered to tax. 3.2. He, therefore, issued a showcause notice to the assessee asking as to why the order passed by the Assessing Officer should not be set aside in term