2025 (10) TMI 1386

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....2017-18. 2. The brief facts are that the appellant is engaged in the business of manufacturing of wielded and seamless tubes, cold forged nuts and also generation of wind power. 3. The assessee has set up a wind power generation plant at Kutch, Gujarat as permitted by GEDA of 1.25 MW. The assessee has entered into an agreement with Madhya Gujarat Vij Company Ltd. (MGVC) which is a distribution company (DISCOM) on 14.05.2008 and another agreement with Gujarat Energy Transmission Corporation Limited (GETCO) on 06.05.2008. The assessee has opted to wheel the energy generated at its captive unit to its other establishment M/s. Gandhi Special Tubes at Village Nurpura, Taluka Halol, Dist. Panchamahal through the DISCOM power grid. It appear....

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....ssing Officer has found that the rate for captive consumption was charged at Rs. 7.49 per unit by Madhya Gujarat Veej Company Ltd. (DISCOM) and the rate for wind energy sold to DISCOM was charged at Rs. 2.86 per unit. The Assessing Officer has observed that the sale price of the assessee to MGVC (DISCOM) i.e. Rs. 2.86 should have been the market price for captive consumption as it represents the market value of the goods and the same should have been adopted for the purpose of deduction under Section 80IA of the Act. In that view, the Assessing Officer has reduced the deduction under Section 80IA of the Act by Rs. 58,15,960/-, which order has been confirmed in appeal. 5. We have heard parties. Perused record. 6. The learned AR has sub....

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....e of deduction under Section 80IA of the Act. 8. We have considered the submissions made. We find that the issue may not detain us long as it is covered by the two decisions of jurisdictional High Court in case of Reliance Industries Ltd. (supra) and the decision of Supreme Court in Jindal Steel & Power Ltd. (supra). It is not in dispute that the assessee is entitled to deduction under Section 80IA for the relevant assessment year in respect of the eligible business. The only issue is with regard to the quantum of profit and gains of the eligible business and the resultant deduction as is permissible under Section 80IA of the Act. It is also not in dispute that the DISCOM is supplying power to the assessee @ Rs.7.49 per unit. During the ....

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....ory requirements. In the present case, as the electricity from the State Electricity Board was inadequate to meet power requirements of the industrial units of the assessee, it set up captive power plants to supply electricity to its industrial units. However, the captive power plants of the assessee could sell or supply the surplus electricity (after supplying electricity to its industrial units) to the State Electricity Board only and not to any other authority or person. Therefore, the surplus electricity had to be compulsorily supplied by the assessee to the State Electricity Board and in terms of Sections 43 and 43A of the 1948 Act, a contract was entered into between the assessee and the State Electricity Board for supply of the surpl....