Captive power valuation under section 80-IA and fixed-asset expense allocation upheld; Revenue's appeals were dismissed.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The ITAT upheld deletion of transfer pricing adjustments on captive power supplied to eligible manufacturing units for section 80-IA purposes, applying the Supreme Court principle that the relevant market value is the rate charged by the State Electricity Board or distribution company to industrial consumers, not the regulated or contracted surplus-power rate. It accepted the annual landed cost paid by the manufacturing units as the proper benchmark and rejected the Revenue's challenge. The Tribunal also sustained allocation of common head office expenses on the fixed-asset ratio, holding that the Revenue had followed the same method in earlier years and no change in facts or law justified a profitability-based allocation. All four Revenue appeals were dismissed.....