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2013 (2) TMI 502 - AT - Income TaxClaim for deduction under Section 80-IA – Assessee is in the business of manufacturing of yarn - Also installed three windmills - Electricity Board purchased power from assessee at the rate of Rs. 2.70 p.u. and sold to assessee’s textile units at 3.50 p.u. – For deduction u/s 80-IA in respect of the power produced by the windmills, assessee adopted the rate at which the power was sold by Electricity Board to it, after making adjustments for the units generated by the assessee – Held that:- It is not that the same power that was produced by the assessee was supplied by the Electricity Board to its yarn manufacturing unit. The adjustment in the bills as a barter arrangement was, therefore, only for the convenience of the Electricity Board. Section 80-IA provides that where an assessee, which is eligible for 80-IA benefits, transferred its goods or service to its business other than the eligible business, the consideration if any recorded for such transfer in the accounts of the eligible business, should correspond to the market value of such goods or services - Determining of tariff between assessee and Electricity Board cannot be considered as an exercise undertaken in a competitive environment and under market conditions – Further Had the assessee not been saddled with the restrictions of supplying surplus power to the State Electricity Board, it would have supplied the power to ultimate customers at a price not less than Rs. 3.50 per unit, being the rate charged by the Board from its industrial consumers. Thus consideration recorded by the assessee for transfer of power for captive consumption, at Rs. 3.50 per unit, corresponds to the market value of such power – In favour of assessee.
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