TMI Blog2012 (8) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... cided in Additional Commissioner of Income-tax, Hisar Range, Hisar Versus Jindal Steel & Power Ltd. [2007 (6) TMI 308 - ITAT DELHI] - Thus the value of the power generated and consumed by the assessee will be that value that should have been paid by the assessee if the power was bought from open market. As 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 the question of market price arises & in such a scenario the price collected by the Tamil Nadu Electricity Board is Rs.3.50 per unit and it is obvious that the market price of the power generated by the assessee is Rs.3.50 per unit as opted by assessee - in favour of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolving other conditions of generation, transmission, wheeling and banking of the Electricity generated. Further, the Assessing Officer, while considering various clauses of the agreement which provided deduction of 5% of the gross energy generated by the Assessee s wind mills, computed the gross energy after wheeling in respect of units at the rate of Rs.2.70 per unit only thereby restricting the deduction at Rs.53,87,918/- against the claim of Rs.69,90,153/- claimed in the return of income. In this manner the Assessing Officer computed the Assessee s income at Rs.57,60,615/- instead of Rs.41,58,380/-, thereby making disallowance to the tune of Rs.16,02,235/-. 6. The Assessee preferred appeal. Before the CIT(Appeals), it argued that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he records of the case, that the Assessee is involved in production of wind generated power who entered into an agreement with TNEB to supply wind generated power at the rate of Rs.2.70 per unit which can be called as captive consumption of powerFor instance, in such arrangement, for such captive power , the Assessee pays nothing if it supplies 100 units to TNE Board gird, it can take 100 units with nothing to pay as both of them pay each other @ Rs.2.70 per unit. In case the Assessee s consumption crosses 100 units, then it pays TNEB @ Rs.3.60 per unit. It is only on the basis of this rate of Rs.3.60 per unit that the Assessee in the instant case has computed its deduction. We find that in such a situation, the co-ordinate Bench in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Commissioner of Incometax, Madurai vs. Thiagarajar Mills Ltd., Kappalur, Madurai. While delivering the judgment in Tax Case(Appeal) Nos.68 to 70 of 2010 dated 7-6-2010 their Lordships have held as under:- 9. Therefore, there is no difficulty in holding that captive consumption of the power generated by the assessee from its own power plant would enable the respondent/assessee to derive profit and gains by working out the cost of such consumption of power inasmuch as the assessee is able to save to that extent which would certainly be covered by section 80IA(1). When such will be the outcome out of own consumption of the power generated and gained by the assessee by setting up its own power plant, we do not find any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s electricity generating undertaking for captive consumption for the purposes of section 80IA(8) and not the price at which power is supplied by the assessee to the Board. 12. Further, as far as captive consumption of power is concerned, the assessee is neither selling nor buying electricity. The quantum of power contributed by the assessee to the Tamil Nadu Electricity Board can be availed as such by the assessee for which no additional payment is to be made. If the assessee has received Rs.. 2.70 per unit, the assessee has to pay only Rs. 2.70 per unit. It is a kind of commodity banking, or in economic term, barter exchange of same good. Therefore, defacto speaking, there is no sale and purchase. In such circumstances there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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