TMI Blog2012 (1) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... f the electricity generated by the assessee, to our mind, committed no error. It can be easily seen that if the assessee were to supply such electricity or was allowed to do so in the open market, surely it would not fetch ₹ 4.51 per unit but ₹ 5 per unit as was being charged by GEB. Since the excise duty component thereof would not be retained by the assessee, Tribunal reduced the said figure by the nature of excise duty and came to the figure of ₹ 4.90 to ascertain the market value of electricity generated by the eligible unit and supplied to non eligible business of the assessee. - TAX APPEAL No. 1646 of 2010 - - - Dated:- 30-1-2012 - MR.JUSTICE AKIL KURESHI AND MS JUSTICE SONIA GOKANI MR KM PARIKH FOR THE APPELLANT ORAL ORDER (Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against judgement of the Tribunal dated 4.11.2009 raising following questions for our consideration : Whether on the facts and in the circumstances of the case, the Tribunal was right in law in directing to compute deduction u/s.80IA by taking the market value of the electricity generated by the assessee at the rate of ₹ 5.00 per unit as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal making following observations : 5.3 I have gone through the contentions of the appellant as well as the arguments of the Assessing Officer. I notice that the average cost of electricity charged by GEB from the non eligible unit of appellant firm was ₹ 5 per unit which included the electricity duty of ₹ 0.83 per unit on an average. It is also a fact that appellant company had paid duty @ ₹ 0.3425 per unit to GEB in respect of the eligible unit. Further excluding the electricity duty the average market value of electricity generated works out to ₹ 4.17 per unit. 5.3.1 Section 80IA(8) reads as under : (8) Where any goods held for the purpose of the eligible profits are transferred to any other business carried on by the assessee, or where any goods 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 as on the date of transfer, then for the purposes of the deduction under this section, the profits and gains of such eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e GEB was being paid at the rate of ₹ 4.9 per unit while the power procured from Captive Unit installed by the assessee for the purpose of computing eligible profit the assessee has taken the market value of the power produced by Captive plant at the rate of 4.9 per unit. We noted that the similar issue has arisen before the Mumbai Bench of the Tribunal in the case of West Coast Paper Mills Ltd. v/s HCIT reported in (2006) 100 ITJ(Mumbai) 822 in which the Tribunal on this issue what should be the price attributable to the power generated and consumed by the assessee for the purpose of computing the deduction available under section 80IA after availing the provisions of section 80IA(9) has held as under : 32. Having held that the assessee is entitled for the deduction available under Section 80IA, the next question is what should be the price attributable to the power generated and consumed by the assessee. The answer to the question is readily available in Subsection (8) of Section 80IA, which reads as below: 80IA( 8) Where any goods held for the purpose of the eligible profits are transferred to any other business carried on by the assessee, or where any goods held for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking market value of the electricity generated by the assessee at the rate of ₹ 4.9 per unit. Ground no.3 is allowed. 6. Revenue has thereupon filed this appeal challenging the decision of the Tribunal. Counsel for the Revenue vehemently contended that the Tribunal committed grave error. He submitted that the Assessing Officer as well as CIT(Appeals) had correctly appreciated the material on record and applied provision contained in Section 80IA( 8) of the Act. Tribunal therefore, ought not to have interfered with such decisions. 7. To our mind, Tribunal has committed no error. Assessing Officer and CIT(Appeals) while adopting ₹ 4.51 per unit as the value of electricity generated by eligible unit of assessee and supplied through its non eligible unit only worked out cost of such electricity generation. In fact CIT(Appeals) in terms recorded that ₹ 4.51 was computed as the reasonable value of the electricity generated by eligible unit of assessee. This amount included ₹ 4.17 per unit which was the cost of electricity generation and ₹ 0.34 per unit which was duty paid by the assessee to GEB for such power generation. Thus the sum of ₹ 4.51 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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