TMI Blog2016 (10) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... in either case the consideration for such transfer does not correspond to the market value of such goods as on the date of the transfer, then for the purposes of deduction under Section 80IA in case of the eligible business as if the transfer had been made at the market value of such goods or services. It is in this context that the question of substituting the actual consideration by the market value comes into picture. We may notice that the Tribunal did not accept the contention of the assessee that the electricity is neither goods nor services and that, transfer of electricity, therefore, would not be covered under subSection (8) of Section 80IA of the Act. However, in so far as the Tribunal's reasoning to adopt the market value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal was right in law in allowing the deduction u/s.80IA(4) of the Act without appreciating that the assessee had captive power generation plant and therefore the claim u/s. 80IA(4) of the Act was not allowable as held by the Hon'ble ITAT Bench A Chennai vide in the case of Chettinand Cement Corporation Ltd. in ITA No. 1026 (Mds)/2005? 2. Whether on the facts and circumstance of case, the Tribunal was right in law in allowing the claim u/s. 80IA(4) as claimed by the assessee on the basis of purchase price of power from GEB, without appreciating the fact that assessing officer had rightly calculated the amount eligible for deduction u/s. 80IA after applying the rate at ₹ 2.47 per unit which became 'Nil' as after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps. charged by Gujarat Electricity Board ( GEB for short) was inclusive of 8 paise per unit of electricity duty. This component of electricity duty the Assessing Officer discarded for the purposes of ascertaining market value of the electricity generated by the CPP Unit and supplied to its general unit. 4. CIT (Appeals) confirmed the view of the Assessing Officer on the same line of reasoning. The Tribunal, however, on further appeal by the assessee, reversed the orders passed by the Revenue authorities referring to and relying upon the decisions of other Tribunals. The Tribunal was of the opinion that the market value of the electricity supplied by the CPP Unit to the general unit would be the same being charged by GEB from the consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal's reasoning to adopt the market value of the goods at ₹ 5.40 ps. per unit is concerned, we find no error. Undisputedly, GEB supplied the electricity to its consumers at the same rate. This, therefore, was a market value of the electricity supplied by the CPP Unit to the general unit. The fact that this amount of ₹ 5.40 ps. comprises of a component of 8 paise, which was electricity duty, to our mind, would make no difference in so far as the market value is concerned. To a consumer, the price being paid remains 5.40 ps. per unit. The fact that the seller retains only ₹ 5.32 ps. out of the said collection and passes on 8 paise per unit to the Government in the form of electricity duty, to our mind, would make n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Value is further explained in explanation to said subsection to mean in relation to any goods or services, price that such goods or services will ordinarily fetch in the open market. To our mind sum of ₹ 4.51 per unit of electricity only represented cost of electricity generation to the assessee and not the market value thereof. It is not in dispute that the GEB charged ₹ 5 per unit for supplying electricity to other industries including non eligible unit of the assessee itself. Tribunal therefore, while adopting the said base figure and excluding excise duty therefrom to work out ₹ 4.90 as the market value of the electricity generated by the assessee, to our mind, committed no error. It can be easily seen that if the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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