TMI Blog2011 (8) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. a. Honourable Commissioner of Income tax (Appeals) erred in upholding the action of the Assessing Officer in following the rate adopted by the TNEB (` 2.70 per unit) for purchasing power from third parties in preference to the rate (` 3.50 per unit) at which the appellant was given set off by TNEB. b. Honourable Commissioner of Income tax (Appeals) erred in holding that the argument of the appellant that there is no free market for sale of power generated by the appellant is not acceptable, where, on facts, the appellant has no other alternative except to sell the power generated to TNEB or use for its captive consumption. c. Honourable Commissioner of Income tax (Appeals) erred in endorsing the view of the learned assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring with the leave of the Hon ble Income-tax Appellate Tribunal a) To reverse the order of the Hon ble Commissioner of Income-tax(Appeals) in upholding the action of the Assessing Officer by adopting the rate of ` 2.70 per unit as selling price for the power units generated by the Windmill b) To direct the assessing officer to adopt the selling rate of power units generated by windmill @ ` 3.50 per unit while computing the profit derived from windmill eligible u/s 80IA. 3. We heard Shri T.Banusekar, the learned Chartered Accountant appearing for the assessee and Shri K.E.B.Rengarajan, the learned Standing Counsel appearing for the Revenue. The very same issue was recently considered by the Income-tax Appellate Tribunal, D-B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the market value in a similar context has been discussed by the Hon ble jurisdictional High Court in the case of Commissioner of Income-tax, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplies power to its consumers is to be considered to be the market value for transfer of power by the 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. xx xx xx 13. xx xx xx 14. Therefore we accept the contention of the assessee and set aside the orders of the lower authorities on this issue. The assessing authority is directed to recompute the profit and gains of the eligible unit for the purpose of section 80IA on the basis of the unit price of electricity generated by the assessee company at `. 3.50 per unit. 4. Accordingly this appeal filed by the assessee is allowed. Order p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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