TMI Blog2015 (6) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... unit which was at higher rate than the power supplied to Chhattisgarh State Electricity Board and held that CIT-A and the Tribunal had rightly computed the market value of the power after considering it with the rate of power available in the open market namely the price charged by the Board - Decided against revenue. - ITA. No. 159/BLPR/2011 - - - Dated:- 19-6-2015 - S/Shri Mukul K Shrawat, (JM) And Shamim Yahya,(AM) For the Appellant : Shri D K Jain. For the Respondent : Shri D C Jain Maloo. ORDER Per MUKUL K SHRAWAT, (JM) : This is an appeal filed by the Revenue arising from the order of ld. CIT(A)-dated 18.4.2011 for the assessment years 2008-09. 2. The Revenue has raised the following grounds: 1. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.2.80 per unit. Therefore, the allegation of the AO was that the assessee company has inflated the profit of Power Division and correspondingly claimed higher deduction u/s 80IA(4). Simultaneously, the profit of Ferro Division was reduced. Finally, the AO has concluded the excessive claim of deduction and worked out the disallowance as under: Entity Units Rate amount Inter unit sale 23535252 4 94141008 CSEB 15694647 2.8 43945012 4. When the matter was carried to ld. CIT(A), the ld. CIT(A) has held as under : 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power is supplied by the assessee to the Board. In the case of Dalmia Cement (Bharat)Ltd V/s Additional CIT(2009) 32 SOT 164 (Del), it was held that the assessee can take credit in the computation of eligible profit of the undertaking for the energy produced and consumed by it, the higher rate at which it would have to purchase the power from electricity board, In the case of JCIT V/s Cipla ltd (2005) 2 SOT 617 (Mum), it was held that sub-section (9) of section 80IA does not at all mandate that the market price has to be necessary the selling price of gods actually sold by the assessee, but the requirement is that the goods should be valued as per the market price, the more appropriate market price will be domestic price of the same go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was to pay was including the tax. 3.4.3 Considering the facts of the case and the legal proposition, I am of the considered opinion that in present case, the average purchase price of the electricity by the appellant from CSEB shall be market price which is Rs.3.95 per unit as against Rs.4.00 claimed by the appellant. Thus, the market value of the goods sold by the eligible unit shall be Rs.9,29,64,245(i..e value of 23535252 unit @ Rs.3.95% per unit) as against claimed by appellant at Rs.9,41,41,008/-. The disallowance is sustained at Rs.11,76,763/- as against Rs.2,82,42,302/- made by the AO. 5. Both the sides have been heard. The ld. DR has placed reliance on the order of the AO. On the other hand, the ld. AR supported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision 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 supplier is not the market rate to a consumer in the open market. 32. In our opinion, the AO committed an illegality in computing the market value by taking into account the rate charged to a supplier: it should have been compared with the market value of power supplied to a co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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