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TMI Blog2023 (4) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... Goda, CA For the Revenue : Smt. Ila M. Parmar, CIT-DR ORDER PER ARUN KHODPIA, AM : The assessee has filed this appeal against the order passed by the CIT(DRP-2), Mumbai-1, dated 28.12.2021 for the assessment year 2017-2018, on the following grounds :- 1. On the facts and in the circumstances of the case and in law, the learned Assessing Officer ( learned AO ) has erred in proposing an adjustment of Rs. 24,94,76,749/- to the total income of the Assessee even though Hon'ble Dispute Resolution Panel ( DRP ) held that there is no transfer pricing adjustment warranted since assessee has not claimed any deduction under section 80-IA of the Income Tax Act, 1961 ( Act ). 2. On the facts and in the circumstances of the case, learned AO/ Hon ble DRP has grossly erred in making adjustments of Rs 24,94,76,749 without appreciating the fact that the Company has incurred gross total losses in the instant AY 2017-18 and has not claimed any deduction under section 80-IA of the Act. 3. On the facts and in the circumstances of the case and in law, the Hon ble DRP/ learned AO erred in determining the price for transfer of power between eligible units and non-elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, notice u/s 143(2) was issued and sent on 17/08/2018. Thereafter, notices under section 142(1) alongwith questionnaire were issued to the assessee, in response to which the assessee has submitted details and information from time to time through e-proceedings. With regard to determination of arm s length price of Domestic/international Transactions , the AO noted that during the year under consideration the assessee has undertaken specified domestic transactions with its associated enterprises and the total transactions has been shown at Rs. 123,31,49,341/- as reported in Form 3CEB. In accordance with the provisions of section 92CA of the I.T. Act, reference was made to the Transfer Pricing Officer (TPO) for determining the Arm s Length Price of the domestic transactions entered into by the assessee with the Associated Enterprises. The TPO has passed an order u/s 92CA(3) vide Order No. ITBA/TPO/F/92CA3/2020-21/1030221113(1) on 30/01/2021, wherein it has been determined that an adjustment of Rs. 49,52,68,006/- should be made to the value of international transactions entered into by the assessee company. Therefore, as per TPO order under section 92CA(3) dated 30/01/2021, a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower by Chattisgarh State Power Distribution Co. Ltd. ('CSPDCL') in the state of Chattisgarh for the purpose of determining arm s length price in respect of transfer of power from eligible units to non-eligible units. It was also submitted that the ld. DRP/ learned AO has grossly erred in considering the rate at which CSPDCL purchases short term power from captive power units to benchmark its transaction relating to transfer of power form eligible units to non-eligible units. The ld. AR objected that ld. DRP/ learned AO has grossly erred in not following judgment of jurisdictional Hon ble Chhattisgarh High court's order in Assessee's own case in earlier years, i.e. AYs 2004-05 to 2006-07 wherein jurisdictional Hon ble Chattisgarh High Court upheld the method adopted by assessee for transfer of captive power from eligible units to non-eligible units. It was also the arguments of the ld. AR that ld. DRP/ ld. AO has erred on the facts and in circumstances of the case and in law in proposing to initiate penalty proceedings against the Assessee under section 270A of the Act, without appreciating the fact that the Assessee has not claimed any deduction under section 80IA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from SEB - TPO observed that rate at which power was being purchased by manufacturing unit from SEB could not be taken as open market value at which power could be sold by CPP in market and TPO, therefore, rejected benchmarking analysis performed by assessee and substituted transfer price of power determined by assessee, as notified by UPERC for sale of power by power generation stations to its State distribution company - Accordingly, arm's length sale value of eligible unit was computed resulting in downward adjustment - It was noted that paper manufacturing unit had procured power throughout year both from CPP as well as SEB and Both CPP and SEB had supplied power in all months of year and, therefore, there were no timing differences as well and in such circumstances, transaction involving purchase of power by non-eligible unit from SEB, was found to fulfil internal CUP parameters and, thus, landed cost paid by paper manufacturing unit to SEB was held to represent internal comparable arm's length rate - whether, on facts, assessee had correctly identified manufacturing unit as tested party and applied CUP as MAM and purchase price of electricity in open market from SEB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .80IA(4)(iv)(a) by an amount of Rs.4,38,75,880/-?. In our considered view, as claimed by the Ld. AR, and rightly so, the aforesaid issue as on date is squarely covered by the order of the Tribunal in the assessee's own case for the assessment year 2008-09, i.e. ACIT-1(2) Vs. Mahindra Sponge and Power Limited in ITA No.159/BLPR/2011, dated 19.06.2015. In its aforesaid order the Tribunal had after drawing support from the judgment of the Hon'ble High Court of Chhattisgarh in the case of CIT Vs. Godawari Power Ispat Ltd. (supra), found favor with the claim of the assessee and observed, that the market value of the power supplied by the assessee to its steel division was rightly computed by considering the rate at which power was available in the open market, namely, the price that was charged by the electricity board. For the sake of clarity the relevant observations of the Tribunal in the assessee's own case for A.Y. 2008-09 are culled out as under: 6. At the outset, it is informed that the issue is squarely covered by the decision of Bilaspur Bench of the Tribunal in the case of ACIT V/s Godavari Power Ispat Ltd. [2011] 133 ITD 502 (Bilaspur). In the compilati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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. 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 been reproduced above. The ld. AR has stated at BAR that the assessee has not challenged the said partial relief and no appeal was preferred. Thus, under the totality of the facts an circumstance of the case, as also law pronounced by the Hon'ble Jurisdictional High Court, we hereby reject this ground of revenue. 11. As the facts and issue involved in the present appeal of the assessee remains the same as were the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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