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2023 (1) TMI 1115 - AT - Income TaxTP Adjustment - Determination of ALP - electricity supply bites captive power generation plant to its AEs - As contended internal CUP i.e., the rate at which the non-eligible unit and other AEs procured power in an uncontrolled transaction from an unrelated entity viz. APSPDCL, was the right basis for determination of Arms Length Price (ALP) - HELD THAT:- TPO himself conceded that the rate at which the assessee supplied the power to the APSPDCL during the financial year 2015-16 at Rs. 5.45 cannot be an uncontrolled transaction, TPO cannot ignore the transaction as submitted by the assessee between TGV Projects, Gauri Gopal Hospital and SRHHL with the APSPDCL at Rs. 8.98, Rs. 8.82 and Rs. 10.71 per unit cannot be ignored. At the same time the consistent view taken by the higher judicial fora and also the Tribunal in the cases referred to by the assessee is to the effect that when the assessee had set up a captive power generating unit and provided electricity to its AEs and claimed deduction under section 80-IA of the Act in respect of profits arising out of such activity, for the purpose of such deduction the market value of power supplied by the assessee to its AEs should be computed considering the rate of power charged by the State Electricity Board for supply of electricity to industrial consumers. We, therefore, respectfully following the decisions of Reliance Industries Limited [2019 (2) TMI 178 - BOMBAY HIGH COURT], Godavari Power and Ispat Ltd [2013 (10) TMI 5 - CHHATTISGARH HIGH COURT], Gujrat Alkalis and Chemicals Ltd [2016 (10) TMI 1111 - GUJARAT HIGH COURT] and Kanoria Chemicals and Industries Ltd [2013 (5) TMI 357 - CALCUTTA HIGH COURT] are of the considered opinion that the assessee is justified in adopting the ALP of the electricity supply bites captive power generation plant to its AEs at Rs. 8.74 and the Revenue is not justified in excluding certain heads of charges from out of it. With this view of the matter, we allow the grounds of appeal on this aspect.
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