TaxTMI 
TaxTMI 
2024 (2) TMI 147
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....he case and in law, the Id. CIT(A) was justified in giving a finding that the rate at which Chhattisgarh State Power Distribution Company Limited (CSPDCL) purchases power from captive power plant is not uncontrolled transactions and there by ignoring the facts brought on the record by the TPO? 3. Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in giving finding by ignoring the facts that when the external comparable uncontrolled price was available then as to why purchase price by CSPDCL can't be taken for determination of comparable uncontrolled price (CUP)? 4. Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred on considering 'Market rate' instead of "Arm's Length Price" determined for the transaction made by the assessee for purchasing power, ignoring the provisions explanation (iii) below the sub-section (6) of section 80IA of the Income Tax Act, 1961? 5. Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in ignoring the FAR (Function performed, Assets used and Risks undertaken) analysis of the transacti....
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....d associate enterprises, as under: Particulars Amount in Rs. Transaction value @Rs.4.30/KWH 12,47,15,477/- Transaction value @Rs.1.45/KWH 4,20,55,219/- ALP Adjustment 8,26,60,258/- After receiving the order of the TPO u/s. 92CA(3) of the Act, dated 29.10.2018, the A.O vide his order passed u/s. 143(3) dated 26.12.2018 had given effect to the downward adjustment suggested by him and resultantly, disallowed its claim for deduction u/s. 80IA of the Act of Rs. 2,69,83,026/-. After, inter alia, making the disallowance of the assessee's claim for deduction u/s. 80IA(4)(iv)(a) of the Act of Rs. 2,69,83,026/-, the A.O vide his order passed u/s. 143(3), dated 26.12.2018 determined the income of the assessee company at Rs. 3,53,49,370/-. 6. Aggrieved the assessee company carried the matter in appeal before the CIT(Appeals) who after drawing support from the order of the Hon'ble High Court of Chhattisgarh in the case of Commissioner of Income Tax, Raipur Vs. Godawari Power and Ispat Limited, (2014) 223 TAXMAN 234 and the orders of the Tribunal, viz. ACIT-2(1) Vs. Mahendra Sponge and Power Limited, ITA No.197/RPR/2017 dated 29.07.2022 for A.Y.2013-14; ACIT-1(1) Vs....
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....nt part is reproduced below: "11. As the facts and issue involved in the present appeal of the assessee remains the same as were there before the Tribunal in its own case for AY 2008-09, therefore, we are unable to comprehend as to on what basis the A. 0 had declined to follow the same. At this stage, we may herein observe that it is neither a fact nor the case of the department that the aforesaid order of the Tribunal had either been set-aside or stayed by the Hon'ble High Court which would have otherwise justified the declining on its part to follow the same. Apart from that, we find absolutely no justification on the part of the A. in not following the binding judgment of the Hon'ble High Court in the case of CIT VS. Godawari Power & lspat Ltd. (supra) which seizes the issue under consideration Admittedly, the Department had assailed the aforesaid judgment of the Hon'ble High Court by filing a SLR before the Hon'ble Apex Court but again, as long as the said judicial Pronouncement is not set-aside or stayed by the Hon'ble Apex Court the same holds the ground and have to be ritually followed by the lower authorities. We, thus, in terms of our aforesaid....
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.... by the Hon'ble High Court of Chhattisgarh in the case of ACIT, Circle-1(2), Raipur Vs. M/s. Mahendra Sponge and Power Ltd., Tax Case (Income Tax Appeal) No.8 of 2016 dated 02.08.2013, Page 207 of APB. Also, the Ld. AR submitted that the issue involved in the present appeal was squarely covered by the judgment of the Hon'ble High Court of Chhattisgarh in the case of CIT, Raipur Vs. M/s. Godawari Power and Ispat Limited (supra), Page 214-218 of APB. 10. Per contra, Shri Satya Prakash Sharma, Ld. Departmental Representative (for short 'DR') relied on the assessment order. However, on being confronted with the fact that the issue was squarely covered by the orders of the Tribunal in assessee's own case for the preceding years as well as by the judgment of the Hon'ble Jurisdictional High Court, the Ld. DR did not controvert the said factual position. 11. We have thoughtfully considered the issue in hand in the backdrop of the contentions advanced by the Ld. authorized representatives of both the parties. As stated by the Ld. AR, and rightly so, the issue involved in the present appeal is squarely covered by the aforementioned orders passed by the Tribunal in assessee's own cases,....
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....had sold/transferred the same to its steel division and associate concerns at a higher value, i.e, at the rate of Rs. 4.30 per unit, the AO with the prior approval of the Pr. CIT, Raipur made a reference u/s. 92CA(1) of the Act to the Transfer Pricing Officer (TPO) for computing the arm's length price (ALP) of the specified domestic transactions of the assessee with its associate enterprise viz. Animesh Ispat (P) Ltd. The TPO vide his order passed u/s. 92CA(3) of the Act, dated 31.10.2017 did not find favour with the benchmarking carried out by the assessee of its specified domestic transactions with its AE. Accordingly, the TPO on the basis of the reasoning recorded in his aforesaid order adopted the rate of Rs. 1.88/- per unit, i.e, the rate at which electricity was sold by the assessee to CSEB and determined the ALP of the assessee's specified domestic transaction at Rs. 1.88/- per unit. On the basis of his aforesaid observations, the TPO proposed a downward adjustment of Rs. 11,47,00,658/- and advised a revision of the assessee's claim for deduction u/s. 80IB of the Act. Accordingly, the A.O after receiving the order passed by the TPO u/s. 92CA(3) of the Act, dated 31.10.2017, ....
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....rmed that the issue is squarely covered by the decision of Bilaspur Bench of the Tribunal in the case of ACIT V/s Godavari Power &Ispat Ltd. [2011] 133 ITD 502 (Bilaspur). In the compilation of the assessee at page 12, the respondent-assessee has also placed reliance on the order of Hon'ble High Court of Chhattisgarh at Bilaspur in the Tax case No.31, 34,32 of 2012 dated 2nd August, 2013 pronounced in the case of CIT V/s Godavari Power &Ispat Ltd., wherein on this very fact that the said assessee was a manufacturer of Iron steel and captive power plant has supplied electricity to its manufacturer unit which was at higher rate than the power supplied to Chhattisgarh State Electricity Board; the Hon'ble High Court has held as under : "28. The Chhattisgarh-Company is a company which is generating power. It is neither consumer of the electricity, nor it is supplying power to a consumer. It also cannot sell power to any consumer directly: it has to compulsorily sell it to the Board. 29. The power sold by the Chhattisgarh-Company to the Board is a sale to a company which itself supplies power to the consumers. It is not sale of power to the consumer. 30. The St....
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....so law pronounced by the Hon'ble Jurisdictional High Court, we hereby reject this ground of revenue." 11. As the facts and issue involved in the present appeal of the assessee remains the same as were there before the Tribunal in its own case for AY 2008-09, therefore, we are unable to comprehend as to on what basis the A.O had declined to follow the same. At this stage, we may herein observe that it is neither a fact nor the case of the department that the aforesaid order of the Tribunal had either been set-aside or stayed by the Hon'ble High Court which would have otherwise justified the declining on its part to follow the same. Apart from that, we find absolutely no justification on the part of the A.O in not following the binding judgment of the Hon'ble High Court in the case of CIT Vs. Godawari Power & Ispat Ltd. (supra) which seizes the issue under consideration. Admittedly, the Department had assailed the aforesaid judgment of the Hon'ble High Court by filing a SLP before the Hon'ble Apex Court but again, as long as the said judicial pronouncement is not set-aside or stayed by the Hon'ble Apex Court the same holds the ground and have to be ritually followed by the l....