TaxTMI 
TaxTMI 
2025 (1) TMI 1533
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....o keep the issue alive as an appeal has been filed by the income tax department before the Rajasthan High Court against the favourable order of the Jaipur Tribunal in assessee's own case for A.Y. 2018-19. 2. Based on the facts and in law, the Ld. DRP/Ld. AO has erred in confirming the computation of Arm's Length Price (ALP) of the power transferred by captive power plant (CPP) to the cement plant at Rs. 4.57 per unit as determined by the TPO as against Rs. 7.77 per unit determined by the assessee on the basis of rates at which M/s. Jaipur Vidyut Vitran Nigam Ltd. (JVVNL) supply electricity units to the assessee and the ALP of electricity generated by the wind power plant transferred to JVVNL at Rs. 4.57 per unit as determined by the TPO as against Rs. 7.10 per unit determined by the assessee on the basis of rates at which m/S. JVVNL supply electricity units to the assessee without considering the favourable decision of the Hon'ble Supreme Court of India in the case of CIT vs. Jindal Steel & Power Limited (2023) 118 CCH 207 dated 6 December 2023 wherein the SC has held the ALP to be the market value of the power supplied by the State Electric....
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.... Transfer of power from windmill Rs. 4,02,25,635/- Total adjustments u/s. 92CA of the Act Rs. 46,16,39,395/- 4. Based on above order of the TPO passed u/s. 92CA (3) of the Act, a draft assessment order was passed on 29.09.2023. Against this draft order assessee filed objections before the Ld. Dispute Resolution Penal (DRP) by filing Form No. 35A on 17.10.2023. The Ld. DRP confirmed the action of the AO and TPO on which assessee objected. The assessee being aggrieved with the order of the AO passed with reference to the direction of Ld. DRP, 1 Delhi preferred the present appeal before us. We have carefully considered the draft order of the AO read with the order of the TPO passed u/s. 92CA(3) of the Act, order of the Ld. DRP passed u/s. 144C(5) of the Act and final assessment order passed u/s. 143(3) r.w.s 144C(13) and 144B of the Act. 5. The Appellant is a company engaged in manufacturing of cement and generation of power. The manufacturing plant of cement is at Morak, Kota. The two coal based Capital Power Plants ("CPP") having installed capacity of 17.5 MW each is also situated at Morak, Kota and two Wind Power Plants ("WPP") having an aggregate capacity of....
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....coordinate bench in Appellant's own case for A.Y. 2018-19 vide order dated 28 November 2022 (PB 35-45) has held that adjustment could have been made if the assessee had claimed deduction under section 80-IA or because of the addition made, the income would have been positive on which deduction under section 80-IA could have been allowed. However, as the Appellant has neither claimed deduction under section 80-IA due to losses or AO made any addition wiping off the losses and assessing the income, addition made on account of transfer pricing adjustment on account of supply of electricity was deleted by the coordinate bench. As there is no order by any higher appellate authority, i.e. the Hon'ble High Court or Supreme Court in favour of the Revenue and also the Revenue is not able to make out the case, distinguishing the earlier ratio laid down by the coordinate bench, we are in agreement with the order of the coordinate bench and respectfully following the same, Ground No. 1 raised by the assessee is allowed. 9. Ground No. 2 pertain to the adjustment proposed by the Transfer Pricing Officer (TPO) u/s. 92CA (3) of the Act amounting to Rs. 46, 16, 39,395/-. On this i....
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....of which Central Electricity Regulation Commission ("CERC") and State Electricity Regulation Commission ("SERC") for various states have been established. 13. As per Section 86 of The Electricity Act, 2003, the SERC have been assigned various functions, including the following: * determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State * regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State 14. Evaluating this in light of the meaning of arm's length price i.e. a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises in uncontrolled conditions, it is evident that the transaction of purchase of electricity by State Electricity Boards from independent power producers is a regulated activity, being subject to approval of SERC, and therefore is not a transaction undertaken in unc....
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....igh Court in case of PCIT Vs. Gujarat Alkalis and Chemicals Ltd. (2017) 395 ITR 247 (Guj) and ACIT, Bharuch Circle, Bharuch, Through Commissioner vs. Pragati Glass Works Pvt Ltd (2012) 80 CCH 0433 [PB 88-91] * Bombay HC in case of CIT (LTU) vs. Reliance Industries Limited (2020) 421 ITR 0686 (Bom) [PB 92-95] * Rajasthan HC in the case of CIT vs. Shree Cement Limited (ITA No 85/ 2014) [PB 96- 110] * Kolkata ITAT in case of DCIT vs. Balarampur Chini Mills Ltd 62 CCH 95 dated 5 May 2021 [PB 111-125] * Delhi ITAT in the case of DCM Shriram Ltd vs. Addl. CIT [2022] 215 TTJ 299 (Del) dated 28 October 2021 PB [126-160] Cost of electricity generation of the Appellant is higher than the price considered by the Appellant for section 80-IA 16. The cost of electricity generation of the Appellant after considering a return on capital of 15.5 percent is higher than the price at which the electricity has been transferred by CPP and WPP to the cement plant and M/s. JVVNL respectively. As per section 45 of RERC Regulation, 2009, the tariff is determined by considering the cost of generation and adding thereto return on capital at 15.5% of the equity. Taking....
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.... (supra) and Shree Cements (supra), definition of market value was construed with respect to clause (i) to explanation to section 80A (6) of the Act wherein the 'market value' was defined to mean price that goods or services would fetch if these were sold in the open market, subject to statutory or regulatory restrictions, if any. However, in this case, clause (iii) to explanation to section 80A (6) of the Act, inserted by Finance Act, 2012 (with effect from 1 April 2013) is applicable wherein the 'market value' has been defined to mean the arm's length price as defined in clause (ii) of section 92F of the Act which means 'price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions". 21. Thus, the above case laws are not applicable and are distinguishable basis the applicable provisions of the Act. As per the legal maxim 'generalibus specialia derogant', it is a settled principle of law that special things derogate from general things. If a special provision is made on a certain matter, the matter is excluded from the general provisions. 22. In light of above, it is submitted that the clause (....