TaxTMI 
TaxTMI 
2017 (8) TMI 1588
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....llowing substantial questions of law:D.B. Income Tax appeal No.86/2014 (i) Whether the Tribunal was legally justified in holding that the sales tax subsidy received by the assessee for Rs. 46,22,28,850/- in the form of sales tax exemption was a capital receipt and not a revenue receipt and also not to be included in book profit u/s 115JB ignoring the purpose of subsidy, which was given to enhance the production employment and sales in the State of Rajasthan which are post operational activities? (ii) Whether the Tribunal was legally justified in reversing the findings of the CIT(A) and allowing the assessee to adopt different market value of goods or services for the purpose of section 80IA(8) on the basis of the revised r....
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.... Emission Reduction (CER) pertaining to Carbon credit shown as capital receipt was neither chargeable to tax under the head "capital gain" nor under the head "business income" u/S.28(iv) and to be excluded for the purpose of section 115JB specifically when the benefit arose to the company from the business activity? D.B. Income Tax appeal No227/2016 (i) Whether the Tribunal was legally justified in reversing the findings of the CIT(A) and allowing the claim of the assessee for the value of the goods or services for the purpose of section 80IA(8) against the All India rate and the rate at which power was sold to third parties thereby deviating from the principle of determining the market value of goods or services referred to Sec....
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....produced by both the parties. At the outset, we find that the revised return filed by the Assessee has been accepted by the AO 12 by clear finding in the Assessment Order. Once revised return is validly filed & accepted, the original return is non-est, as it is completely substituted by the revised return. Now let us deal with 'Market Value'. On perusal of the assessment order & all other records, we find that facts with regard to adaptation of 'market value' are clear. The assessee has adopted a 'value' which is market value and the department has substituted the same by another value. The department is contending that the 'market value' as adopted by AO is the most appropriate since it represents price charged by the State Grid to various....
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.... relation to any goods or services, means the price that such goods or services would ordinarily fetch in the open market." 12. On perusal of the above, it could be clearlyseen that the Statute provides that the assessee must adopt 'Market Value' as the transfer price. In the open market, where a basket of 'Market Values'[say like, independent third party transactions, grid price (average annual landed cost at which grid has sold power to the assessee), Power Exchange Price for the relevant period etc.] are available, the law does not put any restriction on the assessee as to which 'Market Value' it has to adopt, it is purely assessee's discretion. So long as the assessee has adopted a 'Market Value' as the transfer price, that is ....
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....d by the assessee does not correspond to market value. In the present case, we find that the assessee has adopted a rate at which actual transactions have been undertaken by unrelated entities. The volumes of transaction as relied upon are also substantial and hence it cannot be said that the assessee has hand picked 15 some transactions, which are beneficial to it. The DR submitted that since the assessee has itself drawn power from the grid, the grid rate represents the 'best market value' & hence the same should only be adopted. We are not agreeable to the above contention of the department. No doubt the grid rate is market value but there is no concept of 'best' market value in law. If by using the said adjective, Revenue seeks to infer....
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....le unit is situated, the assessee has discretion to adopt any one of them as market value; and (d) If the value adopted by the assessee is 'market value' as explained above, it is not permissible for Revenue to recompute the profits & gains of the eligible unit by substituting the said value (as adopted by the Assesse) by any other 'market value'. 14. Accordingly, we delete the disallowance as made by the AO in order u/s 143(3) on account of deduction u/s 80IA of the Act and hence the grounds 1 & 2 are accordingly decided in favor of the assessee." 27. The said issue is also answered in favour of the assessee. 28. The issue No.3 is with regard to sale proceeds received by the company from the sale of Cert....