9911796707
TMI Blog2013 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... aspur Bench Camp at Raipur (the Tribunal) dated 04.11.2011 dismissing the appeals of the Income Tax Department (the Department) as well as of M/s Godawari Power & Ispat Limited, Siltara, Raipur (the Assessee) in respect of the Assessment year (AY) 2004-05 to 2006-07. THE FACTS 2. The Assessee manufactures iron and steel. It has established a Captive Power Plant (the CPP) to supply electricity to its manufacturing unit (the Steel-Division). The excess power is sold to the Chhattisgarh State Electricity Board (the Board). 3. The Assessee filed its return for the AYs 2004-05 to 2006-07 showing nil, Rs. 5,10,92,400/-, Rs. 91,08,876/- income respectively. 4. A search was conducted by the Department. Thereafter, the Assessing Officer (the AO) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ION 12. We have heard counsel for the parties. 13. Tax case-32 of 2012 is in respect of AY 2005-06. This appeal was admitted on 10.12.2012 on the following substantial question of law: 'Whether on the facts and in the circumstances of the case, the "market value", as specified in Section [80-IA (8)] of the Act would be the same as the "sale price" of the State Electricity Board when the assessee did not incur any transmission loss or administrative or any other charges which the State Electricity Board has to incur for the same?' 14. The remaining two appeals namely, Tax case-31 and 34 of 2012 are in respect of AYs 2004-05 and 2006-07. These appeals are not admitted, but the counsel for the Department states that in these two appeals al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides 'market value' to mean the price that such goods would ordinarily fetch on sale in the open market. 22. The Assessee had sold power to the Steel-Division at the rate of Rs. 3.30/- per unit for AY 2004-05 and Rs. 3.75/- per unit for AYs 2005-06 and 2006-07 23. The AO computed the market value of power under section 80-IA (8) read with its proviso and the explanation. He considered the rate charged by the Chhattisgarh Electricity Company Limited, Raipur (the Chhattisgarh-Company) for supply of electricity to the Board and held the market value of the power to be Rs. 2.25/- per unit for the AY 2004-05 and 2005-06; and Rs. 2.32/- per unit for the AY 2006-07. 24. The market value computed by the AO was less than the value claimed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umer. 30. The Steel-Division of the Assessee is a consumer. The CPP of the Assessee supplies electricity to the Steel-Division. Had the Steel-Division not taken power from the CPP then it had to purchase power from the Board. The CPP has charged the same rate from the Steel-Division that the Steel-Division had to pay to the Board if the power was purchased from the Board. 31. The market value of the power supplied to the Steel-Division should be computed considering the rate of power to a consumer in the open market and it should not be compared with the rate of power when it is sold to a supplier as this is not the rate for which a consumer or the Steel- Division could have purchased power in the open market. The rate of power to a suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2011; ... (8) Where any goods or services held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such goods or services as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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