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TMI Blog2017 (8) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... in reversing the findings of the CIT(A) and allowing the claim of the assessee for the value of the goods or services for the purpose of section 80IA(8) against the All India rate and the rate at which power was sold to third parties thereby deviating from the principle of determining the market value of goods or services referred to Section 80IA(8)?" (iii) Whether the Tribunal was legally justified in holding that the sale proceeds received by the company from the sale of Certified Emission Reduction (CER) pertaining to Carbon credit shown as Capital receipt was neither chargeable to tax under the head "capital gain" nor under the head "business income" u/s 28(iv) and to be excluded for the purpose of section 115JB specifically when the benefit arose to the company from the business activity?" 3. The issue No.1 is squarely covered by the decision taken today in D.B. I.T.A. No.204/2010. 4. With regard to issue no.2, counsel for the appellant contended that the benefits which are claimed by the assessee under Section 80IA of the Income Tax Act has been considered by the AO and more particularly, the AO while considering the facts and the law has rejected the same in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opted by AO is logical. The determination of sale rate on the basis of IEX rates for the period 28.06.2008 to 29.08.2008 is justified because during this period no sale was made by the appellant to any outside party. In such a situation IEX rates fairly represents market price of power, which has been allowed by AO. I, therefore, hold that AO is justified in restricting the claim of appellant u/s 80IA to Rs. 253,80,83,245 as against Rs. 292,09,56,214 claimed by appellant in its return. Action of AO is confirmed. Additional ground of appeal is thus dismissed." 6. She therefore contended that the view taken by the Tribunal is required to be reversed. 7. The third issue is with regard to the sale proceeds received by the company from the sale of Certified Emission Reduction (CER) pertaining to Carbon credit shown as capital receipt, she has taken us to the Section 28(iv), 28(va) Provision (ii) of the Incomes Tax Act which read as under: "28. Profits and gains of business or profession:- The following income shall be chargeable to income- tax under the head" Profits and gains of business or profession",- .... ... .... ....... ..... (iv) 6 the value of any benefit or perquisite, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se where the asset is converted by the owner thereof into, or is treated by him as, stock- in- trade of a business carried on by him, such conversion or treatment;] 6 or] (v) 7 any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 1 (4 of 1882 ); or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co- operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation.- For the purposes of sub- clauses (v) and (vi)," immovable property" shall have the same meaning as in clause (d) of section 269UA;] Explanation 2- For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is necessary to note that the respondent's revised Return of Income was filed within time and the same was in fact accepted and acted upon by the Assessing Officer. It is, extremely well-settled legal position that a lawfully submitted Revised Return of Income substitutes for the original Return which in effect is rendered non-est in law. Consequently, the Tribunal has committed no error of law whatsoever in adopting the figures of market value set out in the Revised Returns submitted for Asst. Years 2007-08 and 2008-09. Consequently, the question of law (Question No.(ii) framed for these two Asst Years will have to be answered in the affirmative and in favour of the assessee. 14. Section 80IA(8) provides that the transfer price, for the purpose of computing the profits of the eligible undertaking should be taken at the market value, which has been described as "the price which such goods would normally fetch in the open market" as on the date of transfer. The market value is, therefore, nothing but an open market price at the relevant time. Four conditions therefore have to be fulfilled for a particular price to qualify to be considered as "market value" viz:- (a) It must be an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple laid down by the abovementioned judgments is directly and squarely applicable to the present case. 21. He has taken support of the judgment rendered by the Andhra Pradesh High Court in the case of My Home Power Ltd. Vs. DCIT (2013 151 TTJ 616 (Hyd) and the observations made by the Supreme Court in the case of Vodafone International Holdings Vs. UOI :: 341 ITR 1 (2012) SC and states that since there is direct taxing provision and now it has been introduced for the first time in the year 2008 and therefore, in that view of the matter, the view taken by the Tribunal is accepted. 22. We have heard counsel for the parties. 23. As stated above, issue No.1, same is already decided in Tax Appeal No.204/2010. In that view of the matter, the first issue is required to be answered in favour of the assessee. 24. The issue No.2 is with regard to the claim of the assessee for the value of the goods or services for the purpose of Section 80IA(8). 25. In view of the submissions made by Mr. S. Ganesh, price which has been given to the sister concern is to be determined on the basis of principle laid down by the Supreme Court in case all the four conditions are fulfilled as stated in his s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, had been made at the market value of such goods or services as on that date" Explanation - For the purposes of this sub-section, "market value", in relation to any goods or services, means the price that such goods or services would ordinarily fetch in the open market." 12. On perusal of the above, it could be clearly seen that the Statute provides that the assessee must adopt 'Market Value' as the transfer price. In the open market, where a basket of 'Market Values'[say like, independent third party transactions, grid price (average annual landed cost at which grid has sold power to the assessee), Power Exchange Price for the relevant period etc.] are available, the law does not put any restriction on the assessee as to which 'Market Value' it has to adopt, it is purely assessee's discretion. So long as the assessee has adopted a 'Market Value' as the transfer price, that is sufficient compliance of law. AO can adopt a different value only where the value adopted by assessee does not correspond to the 'market value'. Even if assessee's Cement Unit has purchased power, also from the Grid or that assessee's Power Unit has also partly sold its power to grid or third parties th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hold that - (a) the value adopted by the Assesse be it value as per independent third party trading transactions or as per Power Exchange (IEX etc.) or any other independent transaction (for the relevant period and which has taken place in the relevant area where the eligible unit is located) constitute 'market value' in terms of explanation to Section 80IA(8); (b) the value at which State Grid has sold power to the Cement Unit of the Assessee (average annual landed cost) also constitute 'market value' in terms of explanation to Section 80IA(8) but the value at which State Grid or third party has purchased power from the Power Unit of the Assessee, which represents its power which is sold when not required by the Cement Unit, does not constitute 'market value' in terms of 16 explanation to Section 80IA(8). It is the 'principle' and not the 'quantum' which is deciding factor; (c) where a basket of 'market values' are available for the relevant period and relevant geographical area where the eligible unit is situated, the assessee has discretion to adopt any one of them as market value; and (d) If the value adopted by the assessee is 'market value' as explained above, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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