AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 35
X X X X Extracts X X X X
X X X X Extracts X X X X
....n amount of Rs. 49,61,60,892, being the market value of electricity generated and supplied from various units of the undertaking for captive consumption. The NFAC / CIT(Appeals) failed to appreciate that the market value for captive consumption should be determined based on the rate at which electricity is supplied to the consuming units by the State Electricity Board (SEB), and not the rate at which excess electricity is sold to third parties or SEBS. 2.1 On the facts and in the circumstances of the case and in law, the NFAC /CIT(Appeals) has further erred in confirming the downward adjustment of Rs. 126,68,65,505, by adopting ALP of the inter unit transfer of power at Rs. 2,84,66,09,006/- instead of Rs. 4,11,34,74,512/- as claimed in the return of income. The disallowance is therefore unjustified and liable to be deleted as decided by the Coordinate Bench of the ITAT in assessee's own case for past years. 3. On the facts and in the circumstances of the case and in law, the NFAC/CIT(A) erred in confirming the disallowance u/s.14A of the Act of Rs. 7,15,78,435/-. 3.1 On the facts and in the circumstances of the case and in law, the NFAC/CIT(A) failed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmission for purchase of electric power generated through Thermal Power Plants as the Arm's Length Price in relation to the electricity transferred by the eligible power generating units of the assessee to its cement manufacturing units. SL No Thermal Power Plant Quantity of Captive Consumption (Units) Tariff rate per unit (INR) adopted by assessee (B) Value of Captive Consumption as computed by Assessee (C = A x B) (Rs) Tariff rate per unit (INR) proposed by TPO (D) Value of Captive Consumption proposed by TPO (E = A x D) (Rs) Amount of Adjustment (F = C− E) (Rs) 1 Sankarnagar, Tamil Nadu 250,591,485 6.57 1,646,386,056 4.66 1,167,756,320 478,629,736 2 Banswara, Rajasthan 102,540,051 7.70 789, 558,393 4.11 421,439,610 368,118,783 3 Vishnupuram Telangana 293,788,102 5.71 1,677,530,062 4.28 1,257,413,077 420,116,986 Total 6,219,494.366 2,846,609,00 1,266,865,505 5. On appeal the Ld. CIT(A) confirmed the action of the TPO. Aggrieved, the assessee is now in appeal before us. 6. Heard both the parties. We find that this issue is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessee is entitled to the deduction u/s.80IA of the Act in respect of the electricity generated and consumed. This is not in dispute. The dispute has risen for computing the deduction u/s.80IA of the Act. The issue admittedly is covered by the decision of the Co-ordinate Bench of this Tribunal in the case of Sri Velayudhaswamy Spinning Mills Vs Deputy Commissioner of Income Tax referred to supra and as also the decision in the case of Eveready Spinning Mills vs. Assistant Commissioner of Income Tax referred to supra. A similar view has also been taken in the case of M/s. Saranya Textiles vs. The Assistant Commissioner of Income Tax, wherein one of us is a party. This view of ours is also supported by the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax vs. Gujarat Alkalies Chemicals Limited reported in 395 ITR 247(Guj.), wherein it has been held that the deduction u/s.80IA was allowable to the for generation of power for captive consumption and that the rate of power generation at which the electricity board supplied power to its consumers rather than the rate at which the power generating companies supply its power to the electricity ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the coordinate bench, we are of the considered view that the DRP has completely erred in sustaining the additions made by the Assessing Officer towards downward adjustment to the transactions of inter unit transfer of power from captive power generating unit to the assessee company. Thus, we direct the Assessing Officer to delete additions made towards TP adjustment in respect of deduction claimed u/s. 80IA of the Act." 7. We find that the decision of the Tribunal in the assessee's own case for the AY 2018-19 is squarely applicable to the present case on hand. The Ld. DR has sought to distinguish the same by citing the decision rendered by the ITAT, Hyderabad in the case of Sanghi Industries Ltd Vs DCIT (170 taxmann.com 716). We however are unable to persuade ourselves to consider the same because it is distinguishable on facts, and since, we are bound by the order passed by the coordinate Bench of this Tribunal in assessee's own case (supra). Hence, in accordance with judicial discipline and following the decision (supra) for AY 2018-19, we set aside the order of the lower authorities, and uphold the benchmark analysis undertaken by the assessee and delete the downward ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he parties. It is seen that, this Tribunal in assessee's own case for AY 2013-14 in ITA Nos.2038 & 2210/Chny/2017 & ITA No.737/Chny/2018 vide order dated 18.08.2021, after considering similar arguments of both the sides, had had held that, those investments which yielded exempt income was to be considered for the purposes of computing disallowance under Rule 8D, by observing as under:- "6.1 Having heard both the sides and considered material on record, we find that an identical issue has been considered by the Co-ordinate Bench of ITAT, Chennai in assessee's own case for assessment years 2007-08 in ITA Nos.1343/Mds/2010, where the Tribunal held that, only those investments which yielded exempt income shall be considered to disallow 0.5% of average value of investment, the income from which does not form part of total income. We further noted that ITAT, Delhi Special Bench in the case of ACIT vs. Vireet Investment Pvt. Ltd., 58 ITR (Trib) 313 had considered an identical issue and held that only those investments which yielded exempt income for the year needs to be considered for computing disallowance of 0.5% of the average value of investment. The ld.CIT(A) after considere....