2008 (12) TMI 756 - HC - Income Tax

Computation of profit u/s 80IA - computation of receipts for captively consumed power at the rate at which it had purchased the power from the Board. Assessing Officer held that since the assessee sold the units to outsiders at the rate of ₹ 3.70 per unit, such amount alone should be taken into consideration as receipts for the units captively consumed. HELD THAT - The law has already been settled by this Court. Therefore, in our considered opinion, we do not find that there is any substantial question of law involved in this matter which is to be gone into by this Court. Hence, the appeal is dismissed.

Summary

Issues:
Delay condonation application, computation of profit under Section 80IA, consideration of receipts for captively consumed power, interpretation of market value for surplus power, settled law by previous judgments.

Delay Condonation Application:
The High Court of Calcutta allowed the delay condonation application of 127 days, stating that a sufficient cause was shown for the delay in the petition. The application for condonation of delay was allowed and disposed of by the court.

Computation of Profit under Section 80IA:
The issue in question involved the computation of profit under Section 80IA. The Assessing Officer had a different view from the assessee regarding the receipts for captively consumed power. The assessee computed the receipts based on the rate at which it purchased power from the Board, while the Assessing Officer insisted that only the amount realized from selling units to outsiders should be considered. The CIT(A) accepted the assessee's contention, emphasizing that the price at which power was bought should be considered for determining the receipts for captively consumed units.

Interpretation of Market Value for Surplus Power:
The court considered the interpretation of market value for surplus power. The Tribunal extensively analyzed the situation where the assessee was not a regular supplier of power and had to dispose of surplus power on an ad-hoc basis to avoid losing benefits. The Tribunal highlighted that the transfer price should be based on the market value of goods, defined as the price ordinarily fetched in the open market. Previous tribunal decisions were cited to support this interpretation.

Settled Law by Previous Judgments:
The High Court noted that the law regarding the issue had been settled by previous judgments, including a subsequent assessment year where the Tribunal accepted the same position. The court emphasized that there was no substantial question of law to be addressed in the matter, as the law had already been established through previous decisions. Consequently, the appeal was dismissed by the court.

In conclusion, the High Court of Calcutta addressed the delay condonation application, the computation of profit under Section 80IA, the interpretation of market value for surplus power, and the settled law by previous judgments in the matter, ultimately dismissing the appeal as the law had already been established through previous decisions.