TMI Blog2013 (9) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity is the market rate. Thus, it can be safely concluded that market rate of the electricity is Rs. 3.50 per unit. Assessee can either captively consume the electricity generated or can sell the same to the Tamil Nadu Electricity Board at Rs. 2.70 per unit. The assessee is refrained from directly selling generated electricity to the consumers. The assessee has no other option but to sell the electricity generated to the Tamil Nadu Electricity Board at the predetermined rates. The assessee cannot charge higher rate from the Tamil Nadu Electricity Board. On the contrary, the Tamil Nadu Electricity Board sells the electricity procured from the assessee and similarly situated power generating units at Rs. 3.50 per unit to the industrial consumers. The market rate of electricity is not determined by the forces of demand and supply, rather the same is regulated by the Government. The Tamil Nadu Electricity Board which is a State Government undertaking is selling the electricity to the ultimate consumers, therefore, the rate at which the consumers get electricity is the market rate. Thus, it can be safely concluded that market rate of the electricity is Rs. 3.50 per unit - Follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost) of electricity purchased by the captive unit from the Tamil Nadu Electricity Board. 4. The Commissioner of Income-tax (Appeals) failed to appreciate that the appellant has adopted the sale value of power consumed at the rate at which it purchased power from the Tamil Nadu Electricity Board in respect of the quantity of power generated by the undertaking and consumed. 5. The Commissioner of Income-tax (Appeals) failed to appreciate that the market rate is not applicable when the rates are regulated by authorities like the Electricity Board. 6. The Commissioner of Income-tax (Appeals) failed to appreciate that the cost of saving of power is profit derived by the windmill undertaking. 7. The Commissioner of Income-tax (Appeals) failed to appreciate that the transactions between the windmill undertaking and the textile undertaking which are two distinct undertakings are at arm's length." Shri T. Banusekar, appearing on behalf of the assessee submitted that the electricity generated by the assessee can be sold either to Tamil Nadu Electricity Board at Rs. 2.70 per unit or it can be captively consumed by the assessee. The authorised representative pointed out that the elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia reported as [1985] 155 ITR 120 (SC). The Departmental representative submitted that the hon'ble jurisdictional High Court in the case of Hi Tech Arai Ltd. has held that merely because a co-ordinate Bench of the Tribunal had earlier taken a different view, the Tribunal need not blindly follow the earlier decision even if the earlier decision did not reflect the correct position of law. The Departmental representative relying on the judgment of the hon'ble Supreme Court of India emphasizes that overruling earlier decision is justified when necessitated by public interest or when previous decision is manifestly wrong. We have heard the submissions made by both parties and have gone through the judgments/orders referred to by the respective parties. We observe that the assessee can either captively consume the electricity generated or can sell the same to the Tamil Nadu Electricity Board at Rs. 2.70 per unit. The assessee is refrained from directly selling generated electricity to the consumers. The assessee has no other option but to sell the electricity generated to the Tamil Nadu Electricity Board at the predetermined rates. The assessee cannot charge higher rate from the Tam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver invoicing the goods transferred or under invoicing of goods bought in. It is a safeguard against misuse of the existing provision. The Assessing Officer took the market value of the power generated by the assessee at Rs. 2.70 per unit and not Rs. 3.50 per unit as claimed by the assessee and thereby the assessee has overstated the price of the goods sold by it so as to boost the profit of its eligible unit, which in this case is windmill unit. 9. The rule applicable in determining the market value in a similar context has been discussed by the hon'ble jurisdictional High Court in the case of CIT v. Thiagarajar Mills Ltd., Kappalur, Madurai. While delivering the judgment in Tax Case (Appeal) Nos. 68 to 70 of 2010 dated June 7, 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 80-IA(1). When such will be the outcome out of own consumpti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly 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 that the question of market price arises. In such a scenario what is the price collected by the Tamil Nadu Electricity Board? The price is Rs. 3.50 per unit. Therefore it is obvious that the market price of the power generated by the assessee is Rs. 3.50 per unit. The expression used in section 80-IA(8) is 'market value'. 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 picture only when the assessee buys power from the Tamil Nadu Electricity Board like any other consumer. The value paid for such consumption is the market value. In the present case that is Rs. 3.50 per unit. 14. Therefore, we accept the contention ..... 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