Captive consumption valuation cannot include notional profit where no sale or commercial job work exists.

PCC poles manufactured and consumed by the Electricity Board for transmission work could not have their assessable value enhanced by adding a notional 10 per cent profit. The proposed uplift rested on an assumption of job work or commercial dealing, but the factual matrix showed no sale, no business transaction, and no assignment of work to another person earning such margin. On that basis, the valuation approach adopted by the authorities and the Tribunal was unsustainable, and the 10 per cent profit addition was deleted.

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Issues: Whether the assessable value of PCC poles manufactured for use by the Electricity Board for laying electric lines and transmission of electricity could be enhanced by adding 10 per cent profit on the footing of captive consumption.

Analysis: The poles were manufactured and used by the Electricity Board itself for transmission purposes. The reasoning that a 10 per cent margin of profit had to be added proceeded on the assumption of job work or commercial dealing, but the factual matrix did not show any sale, business dealing, or assignment of work to another person earning such profit. In these circumstances, the basis for enhancing the value on the footing adopted by the authorities and the Tribunal was not sustainable.

Conclusion: The addition of 10 per cent profit to the value of the PCC poles was unjustified and was deleted.

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