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TMI Blog2015 (6) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO by disallowing the deduction claimed u/s 80IA" 2. The order of the ld. CIT(A) is erroneous both in law and on facts" 3. This is a case of company, stated to be engaged in the business of manufacturing and trading of sponge iron, ingots and generation of power. While passing the order under section 143(3) of the Income Tax Act, 1961, dated 1.11.2010, the AO observed that the assessee has claimed the deduction under section 80IA of the Act at Rs.3,21,93,788/-. The said claim of deduction was allowable for the unit generated and distributing power. The assessee company broadly was having two divisions namely Steel Division and Power Division. The power division has claimed deduction under section 80IA(4)(iv) of the Act. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the CSEB tariff, the average price charges per unit is @ 3.95%. In the given circumstances, what should be the market price is a matter for adjudication. The value of power agreed in PPA is on the basis of certain statutory market, Sale of electricity to third parties in the immediately succeeding assessment year is Rs.7.29 which clearly indicates that the market value of the electricity is much more than the price Agreed by the appellant in PPA which CSEB which was @ 2.80 per unit. Section 80IA(8) envisages the market price which would normally be the price at which the appellant would procure the goods and services, had it not produced the same. 3.4.2 Above view is also supported by various judgments of Income Tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price. In the case of Assam Carbon Products Ltd. ACIT 100 TTJ (Kol) 224, it was held that assessee was justified in valuing internal transfer of NH coke, an import substitute, at notional landed cost by obtaining quotations from the erstwhile foreign suppliers. Open market price would be the price at much the assessee could obtain NH coke in the open market. Assessee was exporting NH coke to the foreign collaborator in order to fulfill the condition imposed by the Government of India for importing technical knowhow, at a price which was undisputedly much lower than the prevailing market price and, therefore, the same cannot be considered as "market value". In the case of DCW Ltd V/s ACIT (2010) 37 SOT 322 (Mum), it was held that market pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilaspur in the Tax case No.31, 34,32 of 2012 dated 2nd August, 2013 pronounced in the case of CIT V/s Godavari Power & Ispat Ltd., wherein on this very fact that the said assessee was a manufacturer of Iron steel and captive power plant has supplied electricity to its manufacturer unit which was at higher rate than the power supplied to Chhattisgarh State Electricity Board; the Hon'ble High Court has held as under : "28. The Chhattisgarh-Company is a company which is generating power. It is neither consumer of the electricity, nor it is supplying power to a consumer. It also cannot sell power to any consumer directly: it has to compulsorily sell it to the Board. 29. The power sold by the Chhattisgarh-Company to the Board is a sale to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the power after considering it with the rate of power available in the open market namely the price charged by the Board. There is no illegality in their orders. 35. In view of above, the question is decided against the Department and in favour of the Assessee. The tax appeals have no merit. They are dismissed 7. Since, this issue has already been decided by Hon'ble Jurisdictional High Court as discussed hereinabove, therefore, we find no force in this ground of Revenue. Before we conclude this judgment it is also worth to mentioned that the ld. CIT(A) has taken into consideration "market price" and thereafter granted part relief by sustaining the disallowance of Rs.11,76,763/-. The relevant paragraph of ld.CIT(A) has already be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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