TaxTMI 
TaxTMI 
2026 (8) TMI 746
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....er, a reference was made to TPO on 23.08.2022. The TPO vide its order dated 31.10.2023 has proposed the adjustment of INR 26,83,98,808/- by reducing the sale price of power transferred from eligible units to non-eligible units and further proposed the adjustment of INR 44,87,06,477/- being reduction in sale price of steam transferred to eligible unit to non-eligible unit. Thereafter, the draft assessment order was passed on 28.12.023 wherein the total income was proposed to be assessed at INR 49,75,97,516/- as the assessee has claimed u/s 80IA of INR 29,39,99,356/- on the profits from sale of power and steam from the eligible unit to non-eligible unit which was determined at NIL by the TPO. 3. Against the said order, the assessee filed objections before Ld. DRP who vide its order dated 25.09.2024 has directed to add mark up of 30% to the average rate of electricity of INR 2.84 per unit at IEX. After incorporating the directions of Ld. DRP, the AO passed the final assessment order u/s 143(3) r.w.s. 144C of the Act on 25.10.2024 wherein the adjournment on account of sale price of power was reduced to INR 21,38,02,792/- and adjustment on account of reduction in sale of price of INR....
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....f power from eligible unit to non-eligible unit on the basis of price charged by MVVNL to industrial consumer as the sale value for transfer of electricity from eligible unit to non- eligible unit and entitled for deduction u/s 80IA(4) of the Act. The ld. AR thus prayed that all the issues being identical and are squarely covered by the judgments of Hon'ble Supreme Court; Hon'ble High Courts and Co-ordinate Bench, therefore, the adjustment made by the AO/TPO be deleted and deduction u/s 80IA of the Act be allowed to the assessee. 9. Per contra, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submits that the facts and circumstances are different from the previous year and further field a detailed written submission in this regard wherein the main contention of the Revenue is based on the judgment of Co-ordinate Bench of Hyderabad Tribunal in the case of Sanghi Industries Ltd. vs DCIT reported in [2025] 170 taxmann.com 716 (Hyd.Trib.) wherein the Tribunal has rejected the said electricity utility as a suitable comparable on account of different FAR. The Revenue also challenged the application on the judgment of Hon'ble Supreme C....
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....in the economic analysis, which is forming part of the TPSR at Paper Book-1 Page No. 187-192 (TPSR Page No. 20 to 25) with regard to determination of Arm's Length Price (ALP) for above mentioned SDTs. 3.1 Firstly, it is evident from perusal of TPSR that the Assessee has not chosen any Tested Party, while determining ALP for any of the above mentioned Specified Domestic Transaction. This deficiency was highlighted during the course of hearing and on specific query from the Hon'ble Bench, the Ld. AR was not able to explain the same. 3.2. Since no tested party has been chosen, it is not known with whom the price for electricity charged by comparable chosen by the assessee i.e. MVVNL is being compared by using CUP. Under T.P. Laws, the economic analysis (manner of determination of ALP i.e. choice of comparables, adjustments needed for comparables etc.) changes based on the choice of tasted party. 3.3 The assessee has not carried out any comparison of FAR ( functions performed, assets employed and risk assumed) with regard to tested party and comparables at all in its TPSR showing contravention to provisions of I.T. Rule 10B, 10C etc. and raising serio....
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....ion of the State Government etc. For the above said reasons, the electricity tariff charged by the State distribution utility cannot be compared with the tariff charged by the assessee for supplying the electricity to itself. 35. In view of the above, we are of the opinion that due to the functions performed, asset employed and the risk assumed by the State Utility were materially different than that of the assessee power generator, we do not find that the State Utility is comparable with the power generator of the assessee. Needless to say for the purpose of comparing the transaction of a third party with the assessee under the comparable uncontrolled price (CUP) method, it is necessary though the transaction should be parametria similar to each other with no difference in FAR and analysis .... " In view of the above, either MVVNL can not be considered as suitable comparable under CUP or adjustment would be required to be made to the electricity price charged by it to factor in the difference in FAR as per mandate of Rule 10B of I.T. Rules. Without such adjustment, MVVNL electricity rates can not act as comparables for CUP method in this case. Further, for making....
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....lized in the paper manufacturing unit/processing unit. This is highly improbable scenario as steam entering the paper manufacturing unit will be regulated by the engineers/technical teams of the unit based on actual requirement of the such unit. In a co-generation plant, it is not the case that entire heat associated with steam coming out of power plant gets utilized in the processing plant. Co-generation plants are designed by providing multiple options/exit options to regulate the consumption of the steam (flowing from power plant to processing plant) in such a manner that only that much heat associated with steam is put to use in the processing plant, which is the actual requirement at that point in time. Hence, any heat associated with steam remaining unutilized in the processing plant or not needed to be routed to processing plant after coming out of power plant is not wasted, and instead routed in a manner that it goes to reduce re-heating requirement of steam needed for the power plant. As such, there is always some residuary heat value left in steam coming out of processing unit, which remains to be considered while working out cost factor. Further, some loss in heat value ....
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....9;ble S.C. in para 33 of its judgement, amended definition of 'market value' was not applicable in that case. As per amended provision of the section 80A(6), 'market value' in respect of a Specified Domestic Transaction would mean Arm's Length Price as defined in clause (ii) of section 92F of the Act. Further, as per section 92C of the Act, arm's length price needs to be determined as per most appropriate methods out of the six methods prescribed in the said section. As a result, in the present case, market value of goods supplied (i.e. electricity supplied by eligible unit to non-eligible unit) is required to be computed as per 'most appropriate method' out of the six methods prescribed in section 92C of the Act and in turn, such 'most appropriate method' is required to be applied in the manner prescribed in Rule 10B(1), 10B(2) and 10B(3) of the I.T. Rules. Selection of 'most appropriate method' is to be done as per Rule 10C. These rules lay down detailed manner and prescribe need for FAR analysis i.e. comparison of functions performed, assets employed and risk assumed between the parties involved in concerned SDT and uncont....
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....o transfer of steam, if Hon'ble Bench is of the considered view that transferred steam can not valued at NIL, the entire benchmarking exercise for transfer of steam will require reworking based on actual consumption basis as discussed above. Hence, in that case, the issue may be set aide to the TPO/AO for fresh determination of ALP for transfer of steam based on actual consumption basis. Similarly, the benchmarking of transaction of transfer of electric power done by the Assessee suffers many deficiencies as discussed above right from absence of tested party to choice of comparable to lack of FAR analysis and lack of required adjustments. Hence, in case, Hon'ble Bench find benchmarking approach of TPO unjustified, matter will be required to be set aside to the AO/TPO for fresh benchmarking of SDT of transfer of electric power in view of severe deficiencies in Assessee's benchmarking too. 7. Before concluding, it would be pertinent to highlight that as per the Transfer Pricing jurisprudence as explained in decision of 5 Members special bench in the case of Aztec Software & Technology Services Ltd. [2007] 162 Taxman 119 (Bangalore - Trib.) (SB), if determination ....
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....ve SDTs with opportunity given to the Assessee to furnish details and make its points before the Ld. TPO afresh. 8. In view of the above, contention of the Assessee to uphold the ALP as determined in TPSR deserve to be rejected. 10. Heard the contentions of both parties at length and perused the material available on record. With respect to the revenue' argument regarding the amendment in Section 80IA of the Act and further incorrectly following the judgement of Hon'ble Supreme Court in the case of Jindal Steel & Power Ltd. (supra), it is observed that in assessee's own case for preceding assessment years, while deciding the appeal, the Co-ordinate Bench has already considered both these aspects and had reached to the conclusion that rate charged by State Electricity Board to unrelated industrial consumer should be taken as the basis for valuation of electricity from eligible unit to non- eligible unit. The relevant observations as contained in para 18 to 25 of the order of coordinate bench are reproduced as under :- 18. "We have heard the rival contentions and perused the material available on record. In the instant case, the TPO made the adjustmen....
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....ions are considered as specified domestic transactions in terms of Section 92BA of the Act. Clause (iii) of the Explanation states that if the transactions are specified domestic transactions as referred to in Section 92BA, then the market value of the goods remains the ALP as defined in clause (ii) of Section 92F of the Act. 20. We observed that similar provisions are contained in Section 80IA(8) of the Act where the clause (ii) of Explanation to Section 80IA(8) also states that the market value in relation to any goods transferred means an arm's length price as defined in clause (ii) of Section 92F of the Act where the transfer of such goods is a specified domestic transaction in Section 92BA of the Act. Both clause (iii) of the Explanation to Section 80A(6) as well as clause (i) of the Explanation to Section 80IA(8) have been brought to the statute book by the Finance Act, 2012 with effect from 1st April 2013. 21. Now coming to the facts of the present case where the TPO had evaluated and compared the transactions with reference to the average price of IEX. The power generating companies, who did not sell the electricity in the open market on account of the....
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....ble Supreme Court in the case of Jindal Steel & Power Ltd. (supra) and held the order of the Tribunal as reasonable order and confirmed the same. The observations of the Hon'ble High Court as contained in para 43 to 60 of the order are reproduced as under- 43. In the present case, the question is to determine the market value or the ALP of power supplied by power plants established by the Assessee to its other units. Supplying of electricity is governed by the Electricity (Supply) Act, 1948 and Electricity Act, 2003. The transmission of electricity is also governed by the Electricity Rules, 2005. 44. Thus, the market for supply of electricity is regulated. Thus, to apply the CUP method, it would be necessary to ascertain the comparable transactions that are similar in material aspects and there is no difference between the transactions which has a bearing on the price of the power supplied. 45. The question whether the average IEX rate at which power is traded on IEX, is a comparable uncontrolled transaction, is required to be evaluated by determining whether there are any differences between the specified domestic transactions and the uncontrolled tr....
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....d in the metering devices. 52. It is also clear that the said material differences between the electricity supplied by SEBs or power distribution companies and those secured by bidding on IEX would have a significant bearing on the price of power. 53. As noted above, the CUP method is an appropriate method only in cases where there is sufficient degree of identity between the tested transactions and comparable uncontrolled transactions. The CUP method cannot be applied where there is significant dissimilarity between the comparable transactions and it is not feasible to determine an adjustment to eliminate the impact of the said differences on the prices of comparable transactions. 54. In the present case, the Assessee had supplied excess power to UPPCL in UP region at the rate of Rs.4.39 per kWh. Thus, the said transaction was accepted by the learned DRP as well as the learned ITAT as an internal uncontrolled transaction. The rate at which such electricity was supplied by the Assessee being Rs.4.39 per kWh, was rightly accepted as an ALP. 55. As noted above, the learned ITAT also accepted the rates at which electricity was supplied by the SEBs/p....
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....sessee. 58. The Revenue had approached the Supreme Court assailing the orders passed by the learned ITAT and the High Court. In the aforesaid context, the Supreme Court had held as under: "23. This brings to the fore as to what do we mean by the expression "open market" which is not a defined expression. 24. Black's Law Dictionary, 10th Edition, defines the expression "open market" to mean a market in which any buyer or seller may trade and in which prices and product availability are determined by free competition. P. Ramanatha Aiyer's Advanced Law Lexicon has also defined the expression "open market" to mean a market in which goods are available to be bought and sold by anyone who cares to. Prices in an open market are determined by the laws of supply and demand. 25. Therefore, the expression "market value" in relation to any goods as defined by the Explanation below the proviso to sub-section (8) of section 80IA would mean the price of such goods determined in an environment of free trade or competition. "Market value" is an expression which denotes the price of a good arrived at between a buyer and a seller in the open market i.e., wh....
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....a price cannot be said to be the price which is determined in the normal course of trade and competition. 27. Another way of looking at the issue is, if the industrial units of the assessee did not have the option of obtaining power from the captive power plants of the assessee, then in that case it would have had to purchase electricity from the State Electricity Board. In such a scenario, the industrial units of the assessee would have had to purchase power from the State Electricity Board at the same rate at which the State Electricity Board supplied to the industrial consumers i.e. Rs. 3.72 per unit. 28. Thus, market value of the power supplied by the assessee to its industrial units should be computed by considering the rate at which the State Electricity Board supplied power to the consumers in the open market and not comparing it with the rate of power when sold to a supplier i.e., sold by the assessee to the State Electricity Board as this was not the rate at which an industrial consumer could have purchased power in the open market. It is clear that the rate at which power was supplied to a supplier could not be the market rate of electricity purchased by....
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....39;ble ITAT, Kolkata in ITC Ltd's own case for subsequent AY 2009-10 in ITA Nos. 685/Kol/2014 & 1267/Kol/2014 read with MA Nos. 17- 18/Kol/2019 have also expressed a divergent view as expressed in their own case by Hon'ble Calcutta High Court in FY 2001-02 by holding that the said judgment has since been reversed by Hon'ble Supreme Court and following the ratio decidendi laid down therein, the assessee's benchmarking methodology viz., the price at which the manufacturing units procures power from SEB, was held to be appropriate ALP." 25. In view of the above facts, and by respectfully following the judgements of the Hon'ble Supreme Court and of the jurisdictional High Court as relied upon herein above, in our considered opinion, for the purposes of determination of the market value of the transfer of electricity from eligible unit to non-eligible unit is to be taken at the market value at which the electricity company charges from consumers as has been requested by Ld.AR. Since in the present case, the assessee has taken the price at the rates at which the electricity is supplied by MVVNL to the industrial consumers i.e. Rs. 6.36 per unit thus, the sale....
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....e same and initially stated that assessee should have adopted the cost plus method for the benchmarking of transfer of steam. However letter on when the assessee contended that if the assessee would have used the cost plus method, the relevant deduction u/s 80IA would have been much higher. Thereafter, the learned transfer pricing officer changed its stand and directed the assessee to submit a statement of cost of production of steam manufactured during the period 1/4/2013-31/3/2014. Assessee stated that it is submitted original set of corsets of the cost of production of steam transferred certified by the cost accountant. However letter on the learned transfer pricing officer on examining the process of power generation stated that the power plants are not installed for steam production but for power generation and as steam being byproduct do not have any cost. Therefore he rejected the most appropriate method applied by the assessee he further held that activity regarding production of steam shows that steam is produced as a result of burning of fuel in boiler. This steam is used for generation of electricity. Thus the entire cost of electricity absorbs entire cost of production ....
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....y comprise water, fuel, power, direct expenses ( such as boiler inspection fee) consumable stores, direct employee cost, repair and maintenance, depreciation, inter- utility transfer and factory overhead. For example: Cost of power generation will include cost of fuel such as furnace oil, coal, salaries and wages, consumable stores, repair and maintenance, deprecation and factory overhead. Unit cost is arrived at on the basis of the net aggregate consumption in different departments after adjusting transmission losses. In case of cogeneration (power and steam) where waste heat from TG (Turbine Generation) is recovered in waste heat recovery unit and used for production of steam, due credit should be given to the Power plant and corresponding charge to SGP(Steam Generation Plant). Charging of power to the consuming cost object is generally done at the weighted average of the cost of power purchased, generated and distribution cost at the consuming point. Steam: A separate statement of cost of steam is prepared indicating the quantity of steam generated, cost of fuel, soft water, power, employee cost for operating staff, sundry supplies, chemical additives, deprecation and other work....
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....nter-division cost ascertainment and reapportionment of inter utility. This application may be used for determining inter-utility transfer cost. Quantitative records of production and distribution should be recorded for each utility to measure the unit cost of a utility. An illustration of steam cost is at Annexure 2. 39. In the annexure - 2 it is given and examples of the total steam cost to be determined in the manner when it is transferred to other units as Under :- "Examples of Steam cost - Transfer to Other units Steam cost per tonne works out to Rs 471.09 as illustrated under Annexure 2. If steam is transferred to other unit, distribution cost will be in addition to the above cost as illustrated below 1 Steam generation cost as 5.3.1 above Rs 471.09 Per MT 2 Distribution cost : Operation & Maintenance cost of distribution line Depreciation Other Total Distribution cost Per MT Rs 1.00 Rs 0.75 Rs 0.75 Rs 2.50 3. Inter Unit transfer cost Rs. 473.59 Cost of a utility determined as per para 5.3.2 plus share of administrative overhead to be charged." 40. Therefore, from the above analysis it is apparent that the learned revenue authorities have incorrectl....
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.... of "power". 14. The case of the Revenue is that "steam" is only an intermediate raw material for the manufacturing process. In other words, the production of "steam" is only a byproduct, which is used by the assessee for its manufacturing activity. 15. In this regard, the CIT(A) recorded the following findings: "2. The appellant has also claimed deduction under section 80IA on account of sale of steam to the chemical plant. "The steam was generated by the power plant in the boiler and part of it was also utilised for the chemical process of the non-eligible unit. The AO has held that the appellant was not entitled to the deduction on account of sale of steam to the power plant. It has been held by her that steam does not fall within the meaning of "power". In this reference she has made reliance on the judgment of honourable ITAT Ahmadabad in the case of N R Agrawal Industries Ltd v. DCIT dated 26/07/2013. The appellant on the other hand has submitted that the value of steam should be considered for arriving the profit as the scheme is being gererated for generation of electricity and after utilising the same for electricity generation the balance steam ....
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....ogical conclusion it would be useful to understand the process involved. The appellant has installed a boiler which generates high-pressure steam at a very high temperature. The steam is first fed in the turbine where part of the heat energy of the steam is utilized in generating the electricity and the balance energy available in the steam coming out from the turbine is utilised in the chemical process. The appellant is incurring expenses such as coal consumption, boiler running, depreciation of boiler and other machinery and the building in which the whole generation plant is housed. The expenditure for the steam, which is utilised in generation of power, and the balance steam which is utilised by the chemical plant can be determined by distributing the same in proportion to the heat value (Enthalpy) of the inlet steam and the outlet steam of the turbine. As per the details available on record the heat value of the inlet steam at 65.5 KG/cm2 is 793 kcal per KG whereas the heat value of the output steam at 3.5 KG/cm2 is 653.7 kcal per KG. The quantity of input and output steam remains the same and only the calorific value of the heat value goes down as part of the energy is utilis....
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....The Tribunal, concurred with the aforesaid findings recorded by the CIT(A), by taking support of the decision of a Co-ordinate Bench of the ITAT, Mumbai, in the case of West Cost Paper Mills (P.) Ltd. v. CIT, [2014] 52 taxmann.com 268. As regards section 80IA of the Act, strong reliance has been placed on behalf of the Revenue on the decision of this Court in the case of CIT v. Atul Ltd. [2016] 74 taxmann.com 255. In Atul Ltd. (supra), the assessee had established a new power plant by expending a sum of Rs. 14.62 Crore and claimed deduction under section 80IA. The Assessing Officer upon examination of such claim, arrived at the conclusion that the production of power would require boiler and also a turbine since the boiler would manufacture steam which would be a raw material for the production of power with the aid of turbine and such a plant would be a new industrial undertaking capable of generating electricity. The case of the assessee was that in the existing power plant the assessee had excess steam production capacity which was to be utilised by the turbine installed in the new plant. The Assessing Officer ultimately rejected the case of the assessee on the ground that the t....
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....or thermal. In such circumstances, the "steam" produced by the assessee can be termed as power and would qualify for the benefits available under section 80IA(4) of the Act." 45. Further Hon'ble Supreme Court in CIT v. Tanfac Industries Ltd., SLP (C) No. 18537 of 2009 [319 ITR 8 (st)] wherein while applying section 80IA of the IT Act, the Hon'ble Supreme Court took a view that the value of steam used for captive consumption by the assessee was entitled to be deducted under section 80IA of the Act. 46. Therefore it is apparent that i. steam is a valuable sources of power ii. it has cost of production, iii. There are methods and Costing Standards for determining the cost of production of steam. iv. Assessee has transferred the steam from eligible units to non-eligible units at cost only. v. Such cost is certified by the Cost Accountant, Chartered Accountant, and Chartered Engineers. vi. It cannot have Nil cost 47. In view of above facts, we are of the view that ld Revenue authorities erred in holding that the steam does not have any cost and therefore steam transferred by assessee's eligible units to ....
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....s not aware whether the revenue has preferred an appeal or not against the aforesaid orders of Tribunal. Since all these issue has already been decided in favour of the assessee by the Co-ordinate Bench of Tribunal in preceding assessment years thus, as a principle of consistency, as has been held by Hon'ble Supreme Court in the case of CIT vs Excel Industries Ltd. reported in 358 ITR 295 (SC), we followed the observations made in para 18 to 25 of the order which are reproduced in above-mentioned paragraphs and delete the adjustment made on account of supply of power from eligible unit to non-eligible unit. 13. It is also a matter of fact that the Hon'ble Third Member in the case of Jt.Cit (Osd)-Cc- 1(4), Mumbai vs Aditya Birla Nuvo Ltd in ITA No. 563/Mum/2018 & ITA No. 1885/Mum/2018 (Assessment Year :2013-14) vide order dated 17th November, 2025 has an occasion to consider the amendment made in section 80A of the Act with respect to the market value as required for the purpose of transfer of electricity from eligible unit to non-eligible unit for the purpose of claiming deduction u/s 80IA of the Act. Hon'ble Third Member after considering the amendments, has made fo....
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....ause (iii) to Explanation u/s.80A(6) of the Act and clause (ii) to Explanation u/s.80IA(8) of the Act were brought into the statute specifically for the purpose of substituting the market value by ALP in respect of SDT. 38. It is noteworthy, both clause (iii) to Explanation u/s.80A(6) of the Act and clause (ii) to Explanation u/s.80IA(8) of the Act refers to ALP as defined u/s. 92F(ii) of the Act. As discussed elsewhere in the order, the ALP as defined u/s. 92F(ii) of the Act means the price at which a transaction between the two unrelated parties is undertaken in uncontrolled conditions. 39. In the facts of the present appeal, admittedly, the Rayon Plant had purchased electricity from the State owned distribution licensee at Rs. 6.62 per unit. Had the Rayon Plant not purchased power from CPP to meet its requirement, it would have purchased power from the distribution licencee at the very same rate of Rs. 6.62 per unit. Therefore, there cannot be any doubt that the rate at which the Rayon Plant purchased power from the distribution licensee can be applied as a valid CUP to determine the ALP of the power supplied/ sold by CPP to Rayon Plant. In this context, the ld....
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....y is sold and supplied by the distribution company to an industrial consumer can be treated as ALP for determining the cost of power supplied by CPP for captive use. 42. While deciding the appeal preferred by the Revenue against the aforesaid order of the co-ordinate bench, the Hon'ble Calcutta High Court in PCIT vs Rungta Mines Ltd. [2025] 176 taxmann.com 410 (Calcutta) had an occasion to deal with the identical issue. Pertinently, in the said appeal, the Revenue had specifically raised the following question amongst others : (b) Whether on the facts and in the circumstances of the case, the Learned Income Tax Appellate Tribunal was justified in law in not considering the provisions of Income Tax Act, 1961 where it has been mandated in cases of transaction between eligible units and non- eligible units of an undertaking, in explanation (iii) of sub section (6) of Section 80A, that the expression "market value" in relation to any goods or services sold, supplied or acquired means the "arm's length price" as defined in clause (ii) of section 92F of such goods or services, if it is a specified domestic transactions referred to in section 92BA? 43. A....
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....ub Section 2 of Section 9 states that every person, who has constructed a Captive Generating Plant and maintains and operates such plant shall have the right to open access for the purpose of carrying electricity from his Captive Generating Plant to the destination of his use. Section 42 of the Act deals with duties of the distribution licensees and open access. Thus, the scheme of the Act is that a person may construct, maintain or operate a Captive Generating Plant and dedicated transmission lines and captive plants will have the right to open access for the purpose of carrying electricity from captive plants to the destination of its use and no surcharge is leviable incase open access is provided to captive units by the central or state transmission utility or the transmission licensee involved in the distribution/ transmission of power. Further the provision make it clear that there is no embargo to other power generating companies to directly sell the power to such consumer at mutually agreed rate. This being not the legal position when the decision in ITC Limited was rendered, the said decision could not have been relied upon by the TPO/ assessing officer. 18. We con....
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.... can only be claimed on the basis of the rates fixed by the tariff regulation commission for sale of electricity by the generating companies to the distribution company? 20. The Court took note of the decision of the Hon'ble Supreme Courtin CIT Versus Jindal Steel and Power Limited 6. In the said case, the assessee having found that the electricity supplied by the State Electricity Board was inadequate and to meet the requirements of its industrial units, set up captive power generating units to supply electricity to its industrial units which was done at a particular rate. The surplus power if any, generated was to be wheeled out to the electricity board grid pursuant to an agreement between the State Electricity Board and the assessee at a rate fixed by the State Electricity Board. The question which arose of consideration is as to the quantum of deduction which the assessee would be entitled to claim under Section 80IA of the Act. The assessing officer held value of the electricity should be computed based on the rate fixed by the State Electricity Board for the electricity which is purchased by the assessee. The Dispute Resolution Panel (DRP affirmed the view taken....
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....he State Electricity Board while supplying electricity to the industrial consumers. Therefore, the High Court was fully justified in deciding the appeal against the Revenue." 21. The Hon'ble Supreme Court after taking note of the relevant provisions of the Income Tax Act, and in particular Section 80IA held that the market value of the power supplied by State Electricity Board to the Industrial consumers should be construed to be the market value of electricity and it should not be compared with the rate of power sold to or supply to the State Electricity Board since the rate of power to a supplier cannot be the market rate of power sold to a consumer in the open market. It was further held that the State Electricity Boards rate when it supplies power to the consumer have to be taken as market value for computing the deduction under Section 80IA of the Act. Thus, applying the decision of the Hon'ble Supreme Court in Jindal Steel and Power and in the light of the reasoning given in the preceding paragraphs, we hold that the learned tribunal rightly dismissed the appeals filed by the revenue. 44. It is noteworthy, in case of Star Paper Mills Limited vs.DCIT ....
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....ontrast, in the present case, CPP has sold power only to Rayon Plant for captive consumption at Rs. 6.62/- per unit and to no other party at any other rate. As against the aforesaid decision cited by learned DR, there are decisions of Hon'ble Delhi High Court in case of PCIT Vs DCM Shriram Ltd.(supra) and that of Hon'ble Calcutta High Court in case of PCIT Vs Rungta Mines Ltd. as well as plethora of other decisions of ITAT favourable to assessee, which are directly on the issue and have been rendered after considering all the relevant provisions of the Act, including, sections 80A(6), 80IA(8) with amended explanation, 92F(ii), Rule 10B etc. Therefore, these decisions carrying precedent value cannot be lightly brushed aside by branding them as per incuriam or having been rendered sub silentio of certain relevant provisions, merely because they are against the revenue. 46. Thus, upon considering the overall facts and circumstances of the case in the light of the judicial precedents cited before me, I am of the considered opinion that the price at which the assessee purchased power from the distribution licensee, GUVNL can be applied as a valid CUP for determining the....