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2011 (7) TMI 965 - ITAT CHENNAIDeduction u/s 80IA in respect of windmill undertaking - determination of price - assessee engaged in textile manufacturing, also engaged in generation of electricity from its windmills - captive consumption - assessing authority adopted the price of power at Rs. 2.70 per unit (rate at which Tamil Nadu Electricity Board takes over electricity from assessee) - assessee contended it to be market rate of Rs 3.50 per unit( rate at which TNEB sells electricity to consumers - Held that:- Market price comes into play only when the assessee is buying power from the Tamil Nadu Electricity Board just like any other consumer. The Tamil Nadu Electricity Board is the supplier and the assessee is the consumer and there is no question of commodity banking or barter exchange. The Tamil Nadu Electricity Board sells power to the assessee in the usual course of its business and the assessee buys the power like any other consumer in the market. It is in that context price collected by the Tamil Nadu Electricity Board i.e. Rs. 3.50 per unit is obvious the market price of the power generated by the assessee. The expression used in section 80-IA(8) is "market value" means the value determined by market forces. In the captive consumption of power generated by the assessee-company no market force is operating. Market forces come into the picture only when the assessee buys power from the Tamil Nadu Electricity Board like any other consumer. Therefore assessing authority is directed to recompute, the profit and gains of the eligible unit for the purpose of section 80-IA on the basis of the unit price of electricity generated by the assessee-company at Rs. 3.50 per unit - Decided in favor of assessee.
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