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2024 (5) TMI 1013 - ITAT CHENNAIDeduction u/s 80IA - determination of market value of the power supplied by the assessee to its industrial units - rate fixed by Tariff Regulatory Commission OR Rate chargeable by the distribution companies - as per AO assessee could not have claimed the benefit at the rate chargeable by the distribution companies but should have claimed on the basis of rates fixed by Tariff Regulatory Commission for sale of electricity by generating companies - Assessee supported in adopting the average price of the power purchased other than the captive power - HELD THAT:- Hon’ble Supreme Court in the case of CIT v. Jindal Steel & Power Limited [2023 (12) TMI 417 - SUPREME COURT] held the expression “market value” in relation to any goods as defined by the explanation below to proviso to sub-section (8) of section 80IA of the Act, meaning the price of such goods determined in an environment of free trade or competition, is market value which is an expression which denotes the price of a good arrived at between a buyer and a seller in the open market i.e., where the transaction takes place in the normal course of trading. Hon’ble Supreme Court held that the 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, but not comparing it with the rate of power when sold to a supplier i.e., sold by the assessee to the State Electricity Board. Thus, it is clear that the rate at which power was supplied to a supplier could not be a market rate of electricity purchased by a consumer in the open market, but, the rate at which the State Electricity Board supplied power to the industrial consumers is to be taken as market value. AR brought to our notice that the AO allowed the deduction under section 80IA of the Act for the initial year being assessment year 2011-12 - For the assessment year 2020-21, the Assessing Officer allowed deduction u/s 80IA in favour of the assessee. We note that the Revenue allowed the claim of the assessee for computing deduction u/s 80IA of the Act for initial year and the assessment year subsequent to the year under consideration. The assessee adopted price at ₹.5.60 per unit which was arrived at on the total charges paid by the assessee towards electricity purchased from Tamilnadu Electricity Board and other price power purchaser. Therefore, we hold that the rate at which State Electricity Board supplied electricity to the industrial consumers would have to be taken as the market value for computing deduction under section 80IA of the Act. Grounds raised by the Revenue are dismissed.
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