9911796707
TMI Blog2025 (1) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... falling either in section 80IA(8) or section 80IA(10) become ineligible. The eligible business is defined in section 80IA(4) which is not dependent upon the exercise of option by the assessee. As held by us the determination of ALP adjustment under Section 92BA is not dependent upon seeking the direction under Section 80IA by the assessee. Both provisions operate in different fields and were inserted for different reasons. The argument of the assessee that the assessee has not claimed deduction u/s. 80IA, therefore, the provisions of section 92BA are not attracted, are devoid of any merit and the objection is dismissed. Arm's Length Price - Assessee itself has taken the CUP method as most appropriate method in terms of 92C read with 92F of the Income Tax Act and has benchmarked the transactions. Thus, it is not the case of the assessee that the transaction is to be benchmarked on the basis of (i) of Explanation to Section 80IA(8) of the Act. Whether the electricity sold by the assessee to 14 consumers would be the market value of the goods or services supplied by the assessee or not? - In the present case, assessee has not given the value of the electricity sold in open market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the State Electricity Board is required to be considered for benchmarking the power supply between the related parties, is not applicable to the facts of the present case, as the internal comparable in the form of the power supply to the 14 companies were available with the Ld. TPO and therefore, TPO had rightly applied the arithmetic mean of power supply by it to 14 consumers.
Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... instead of Rs. 104,99,80,729/- as per assessment order, thereby making excess disallowance of Rs. 4,96,92,167/-, without assigning any reason therefor. 8. That in the facts and circumstances of the case, the Ld. AO is not justified in determining the tax payable including interest Rs. 60,06,68,444/- without adjusting brought forward losses and unabsorbed depreciation of earlier assessment years. 9. That in the facts and circumstances of the case, the Ld. AO is not justified in considering short credit of TDS to the tune of Rs. 30,211/- without assigning any reasons therefor. 10. The appellant craves leave to add, amend or alter any of the grounds during the course of hearing." 2. Brief facts of the case are that the assessee-company is engaged in manufacturing of Clinker and Ordinary Portland Cement. The assessee, being the third largest cement manufacturer in western India, sells its ordinary Portland cement under the name and style of "Sanghi Cement" in India as well as in foreign markets. The assessee's cement manufacturing unit is located in Kutch, Gujarat. During the AY under consideration, the assessee has furnished a report in Form No. 3CEB as per the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her, it was also submitted that the assessee has raised this ground before the lower authorities however, the lower authorities have failed to take cognizance of the above said grounds and have decided the issue against the assessee. The Ld. AR has drawn our attention to para 6.5.1, 6.5.2, 6.5.3 and 6.5.4 of the Ld. TPO's order which is to the following effect: "6.5.1. Taxpayer's objections: Adjustment under SDT are not applicable to the facts of the assessee as there is no claim of deduction u/s. 80IA in its return of income. The assessee argued that the transactions pertaining to transfer of power and transfer of fly ash are not specified domestic transactions as the power unit of the company though an eligible unit did not claim deduction u/s. 80IA for the year under consideration, as the company incurred losses during the FY 2016-17. 6.5.2. TPO's comments: The taxpayer reported the specified domestic transactions pertaining to transfer of power and transfer of fly ash in column No. 23 of Form 3CEB. Captive Power Unit of the assessee is an eligible unit for the purpose of Sec. 80IA. Further, as per sec 92BA, provisions of specified domestic transactions are applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he profits and gains of eligible business / unit shall be computed by applying such value / price in respect of specified domestic transactions with non-eligible business / unit. Also, it is important to note that as per section 80IA(5), the quantum of in respect of profits of eligible business / unit shall be computed as if such eligible business / unit were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including assessment year for which the deduction is to be computed. Accordingly, notwithstanding the fact that the assessee is not claiming deduction u/s. 80IA for the current year under consideration, but if such assessment year falls within the tax holiday period of 10 assessment year beginning with the initial assessment year, then increase in loss of eligible business / unit on account of adjustment to specific domestic transaction will have an impact on the computation of deduction u/s. 80IA in the subsequent assessment years of tax holiday period. To be precise, if in the initial years of the tax holiday period, the assessee has disclosed loss under eligible busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible assessee within the meaning of section 80IA of the Act, then the occasion of application of section 92BA does not arise. 5.1 To buttress his arguments, the ld.AR has drawn our attention to the decision of the ITAT, Kolkata Bench in the case of Star Paper Mills Limited vs. DCIT in ITA No. 127/Kol/2021 (AY 2016-17), dated 26/10/2021 (Pages 275 to 306 of the paper book). While referring to the said decision of the Kolkata Bench (supra), the Ld AR has drawn our attention to Ground No.6 of that appeal wherein the issue has been captured as under: "6. For that on the facts and in the circumstances of the case and in law and without prejudice to the preceding grounds, the lower authorities erred in making addition on account of transfer pricing adjustment of Rs. 13,71,40,567/- computed in respect of the transaction referred to in section 92BA(iii) & (v) read with section 80IA(8) & (10) of the Act without appreciating the jurisdictional fact that the appellant did not claim any deduction u/s. 80IA in the return of income and in that view of the matter no addition whatsoever was warranted to the total income." 6. Further, the Ld. AR with respect to the finding of the Tribunal over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the determination of the ALP on account of supply being made by it, is wholly erroneous. The Ld.AR had drawn our attention to the submissions made before the DRP, which are to the following effect "1.3 It is submitted that Sec 92BA takes into its ambit the transactions referred to in Section 80A and each of the transactions therein are linked to deductions claimed under section 801A and others. Each of Sections 80A(6), 801A(8) and 80IA(10) permit or necessitate re-computation only for the purposes of deduction. Hence, in the absence of claim for deduction, the transactions need not be tested and hence application of the provisions of Sec 92BA fails. 1.4 The Assessee derives support for the said proposition from the intention of enactment of Sec 92BA which is submitted as below: a. Generally, tax entities reduce and manage the effective tax rates by availing benefits of incentives, shifting of profits to tax holiday units (i.e. eligible units "EU") from non-tax holiday units (i.e.. non eligible units -- "NEU")two legal entities having differential tax rates (or even a loss-making group entity). b. The provisions of section 92BA were introduced in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction and the profits eligible for deduction u/s 80IA from the total income of the taxpayer. 1.5 NO CLAIM OF PROFIT-LINKED DEDUCTION FOREVER a) As mentioned in our earlier part of submissions, the total income of the company resulted in negative and on account of applicability of Section 80A(2) that deduction under Chapter VI cannot exceed gross total income, there is no claim of deduction under Section 80IA (4), with respect to profits of power undertaking. b) The assessee has not claimed deduction 80IA from initial AY 2013-14 to AY 2019-20, on account of losses carried forward from earlier years. c) In the AY 2020-21, the company opted for taxation under section 115BAA and thereby foregone the opportunity to claim deduction u/s 80IA forever. In the Assessee's case, effectively in the absence of any claim of deduction under Chapter VI-A, both the cement and power unique non-eligible, though power unit may be carrying on business classified as eligible. Hence the re computation of profits of power unit is unwarranted. 1.6 Assessee not entitled to claim any deduction under Chapter VI-A. C. The Assessee submits that, owing to the losses in the current year and broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides the definition of the Specified Domestic Transaction, which is to the following effect: "Meaning of specified domestic transaction. 92BA. For the purposes of this section and sections 92, 92C, 92D and 92E, "specified domestic transaction" in case of an assessee means any of the following transactions, not being an international transaction, namely:-- (i) [***] (ii) any transaction referred to in section 80A; (iii) any transfer of goods or services referred to in sub-section (8) of section 80-IA; (iv) any business transacted between the assessee and other person as referred to in sub-section (10) of section 80-IA; (v) any transaction, referred to in any other section under Chapter VI-A or section 10AA, to which provisions of sub-section (8) or sub-section (10) of section 80-IA are applicable; or (va) any business transacted between the persons referred to in sub-section (6) of section 115BAB; 22[(vb) any business transacted between the assessee and other person as referred to in sub-section (4) of section 115BAE;] (vi) any other transaction as may be prescribed, and where the aggregate of such transactions entered into by the assessee in the previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and its transactions that result in more than ordinary profits as it appears to the AO. There is no condition or contention that the assessee should be claiming deduction u/s 801A. The eligible business is defined in section 80IA(1) with reference to the section 80IA(4). Nowhere in any of these sub-sections, does eligible business mean business claiming the deduction u/s 80IA. Therefore, the argument that assessee is not claiming any deduction in the year concerned is of no relevance. (b) Whether or not the 80IA deduction is claimed in the year, the impact of the business transactions of the year will be there in the future years for claims under section 80IA. Para 6.5.4. (page 7-8 )of AO's order( paper book of assessee page 19-20) deals with how transaction will affect in other years where the 80IA can be claimed, as losses will have to be given effect. Thus, the very argument of the assessee that deduction is necessary in the year fails, as the deduction can be affected in any other year, by this year's transactions. (c) The assessee's contention is that the above argument of the AO is incorrect because it has never claimed the deduction u/s 80IA. However, that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is to the following effect:- "6.2. It is noticed that the P & L Account that the assessee sold power of Rs. 17,52,28,216/- apart from captive consumption. Therefore, vide this office notice dated 29/12/2020, the assessee was asked to furnish the details of Rs. 17,52,28,216/- received on sale of power by the power generating unit along with copies of invoices raised for sale of power and details of purchasers. In response to the notice, vide its letter dated 07/01/2021, the assessee furnished the details of the power sold to third parties along with the copies of the following invoices (Annexure-3)." 12. On the basis of para 6.2 of the TPO's order, it was submitted that the assessee was supplying the surplus electricity to the 14 companies at a price of Rs. 2.97/- whereas when it called for variations of the price with the assessee, it has shown at the price of Rs. 7.85/- per unit. It was submitted that by increasing the price of power purchase, the assessee sought to increase the profit of the captive power generation usage, but since the internal comparable was available, therefore, the Ld. TPO / DRP have exercised the internal CUP method as per Rule 10B of the Income Tax R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the distribution licensees. Therefore, it was held by the High Court that the assessee's generating unit could not claim any benefit under section 80-IA of the Act computing the profits and gains on the basis of the rate chargeable by the distribution licensee from the consumer and that the benefit could only be claimed on the basis of the rates fixed by the tariff regulatory commission for sale of electricity by the generating company. Facts being clearly distinguishable, this decision can be of no assistance to the revenue. 12.2 It was submitted that once the internal comparable is available, then the lower authorities were right in adjusting. The Ld. DR has also submitted that this argument of non-applicability of section 92BA is fallacious. The following submissions were filled by the revenue in this regard:- 1. The assessee, being a private limited company, is engaged in the business of manufacturing of clinker and ordinary Portland cement at Kutch, Gujarat and it sells the finished goods under the brand name of 'Sanghi Cement' in domestic as well as in foreign markets. 2. In order to serves its internal needs, it has set up a captive power plant and such un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP, the assessee has filed an appeal before the Hon'ble ITAT, Hyderabad. Arguments of the assessee: During the year, the assessee has not claimed any deduction under section 80IA. Hence, provisions of domestic transfer pricing are not applicable. Arguments of the Revenue: The assessee is an eligible unit as per the provisions of section 80-IA and satisfied the conditions therein. Further, the assessee has not claimed exemption only because it has huge accumulated losses during the previous years. Once it is finalized that that the assessee is an eligible unit and transferred certain goods/services to non-eligible unit or related party, domestic transfer pricing provisions shall be applicable and arm's length price shall be computed for those transactions Further, reduction of price in the case of eligible unit should not result in corresponding adjustment in the case of non-eligible unit. Arguments of the assessee: Rate charged by Paschim Gujarat Vij Company Limited shall be considered as arm's length price (the assessee has procured power from Paschim Gujarat Vij Company Limited at Rs. 7,85/ unit). Arguments of the Revenue: As the price charged by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or develops a special economic zone referred to in clause (iii) of sub-section (4) or generates power or commences transmission or distribution of power or undertakes substantial renovation and modernisation of the existing transmission or distribution lines : Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (i) of sub-section (4), the provisions of this sub-section shall have effect as if for the words "fifteen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of machinery or plant by the assessee. Explanation 2.--Where in the case of an undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with. (4) This section applies to-- (i) any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely:-- (a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act; (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notified by the Central Government in accordance with the scheme framed and notified by that Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2006: Provided that in a case where an undertaking develops an industrial park on or after the 1st day of April, 1999 or a special economic zone on or after the 1st day of April, 2001 and transfers the operation and maintenance of such industrial park or such special economic zone, as the case may be, to another undertaking (hereafter in this section referred to as the transferee undertaking), the deduction under sub-section (1) shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee undertaking : Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words "31st day of March, 2006", the figures, letters and words "31st day of March, 2011" had been substituted; (iv) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the eligible business are transferred to any other business carried on by the assessee, or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, in either case, the consideration, if any, for such transfer as recorded in the accounts of the eligible business does not correspond to the market value of such goods or services as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as on that date : Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit. Explanation.--For the purposes of this sub-section, "market value", in relation to any goods or services, means-- (i) the price that such goods or services would ordinarily fetch in the open m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes notified on or after the 1st day of April, 2005 in accordance with the scheme referred to in sub-clause (iii) of clause (c) of sub-section (4). Explanation.--For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1)." 16. From a plain reading of section 92BA of the Act, it is clear that what is required for invoking the provisions of section 92BA of the Act is that the assessee transactions should be covered in any of the clauses mentioned at Sl. No. ii to vi of 92BA, either with it any of its associates or with any person having a close connection with the assessee. If the assessee is having the specified domestic transaction with itself or its close associate as per section 92 BA, then the arm-length price in relation to the specified domestic transaction is required to be determined by following Most Appropriate Methods as mentioned in section 92C of the Income Tax Act. Section 80IA (8) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has resulted into extraordinary profit by arranging the business. 20. In the present case, admittedly, the power-generating unit of the assessee is connected with the assessee within the meaning of section 80IA (8) and (10), and it is not disputed that in the course of business, they had entered into the agreement for the supply of electricity. On account of this understanding of the agreement, the extraordinary profit was shifted by the assessee to its power-generating unit. In other words, the assessee, by purchasing the power at a higher rate, has increased its expenditure and thereby entered into reducing its income/profit. In our view, the relationship between the two is squarely covered by the provision of sections 80IA(8) and 80IA(10). Hence, the transaction is a qualified transaction within the meaning of section 92BA. 21. It is amply clear that for the invocation of section 92BA, there is no necessity for the assessee for opting the deduction u/s. 80IA during the AY under consideration. The option is with the assessee to claim the deduction u/s. 80IA for any 10 consecutive assessment years out of the 15 years, as per section 80IA(2) of the Act. Merely because the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22400 Kwh 12,67,200 3.000 2 Cadilla Healthcare Ltd 2716000 461250 Kwh 13,83,750 3.000 3 Cadilla Healthcare Ltd 2716000 468000 Kwh 14,04,000 3.000 4 Gujarat fluorochemicals Limited 2716000 1344000 Kwh 36,01,920 2.680 5 Gujarat fluorochemicals Limited 2716000 1176000 Kwh 35,28,000 3.000 6 Gujarat fluorochemicals Limited 2716000 1344000 Kwh 38,30,400 2.850 7 Piramal Glass Ltd 2716000 768000 Kwh 23,80,800 3.100 8 Piramal Glass Ltd 2716000 537600 Kwh 16,66,560 3.100 9 Piramal Glass Ltd 2716000 594900 Kwh 18,44,190 3.100 10 PTC India Ltd 2716000 707950 Kwh 21,30,929.50 3.010 11 PTC India Ltd 2716000 83000 Kwh 2,49,830 3.010 12 PTC India Ltd 2716000 768000 Kwh 22,34,880 2.940 13 Swiss Glasscoat Equipments Ltd 2716000 853200 Kwh 25,08,408 2.940 14 Swiss Glasscoat Equipments Ltd 2716000 28800 Kwh 84,672 2.940 Average Rate 2.97 24. Based on the above table, the Assessing Officer found that the assessee company sold power to independent third party at per unit rate of Rs. 2.97/- whereas the unit rate at which the power was sold for captive consumption (self consumption) was at Rs. 7.87/- per unit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses of this sub-section, "market value", in relation to any goods or services, means-- (i) the price that such goods or services would ordinarily fetch in the open market; or (ii) the arm's length price as defined in clause (ii) of section 92F, where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA. 27. A plain reading of the above explanation clearly indicates for determination of market value either on the basis of the price that such goods or services would ordinarily fetch in the open market or the ALP as defined under Section 92F(ii) of the Act where the transfer of such goods or services is a specified domestic transaction referred to in section 92BA. Prior to the insertion of this explanation, the definition of market value was not available in the Income Tax Act. In the absence of the definition of the market value, various High Courts and the Tribunals have considered the per unit price of the electricity as charged by the public utility as market value. In the present case, as mentioned hereinabove and also in the order of TPO that assessee itself has taken the CUP method as most appropriate method ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e electricity tariff for the generator, transmitter and distribution utility is required to be separately determined by the Regulatory Commission as all three utilities are discharging different functions. The tariff charged by the generator of electricity cannot be compared with the tariff charged by the distributor. Further, the tariff charged by the State distributor cannot be compared with the Captive Power Generator like assessee before us. There is no comparison between the functions performed by the state utility with that of the assessee. To demonstrate the disparity in the functioning of the State Utility and determination of electricity tariff per unit by the State Electricity Regulatory Commission, it is necessary to mention the various provisions of the Electricity Act and Tarif Policy notified by the Central Government. Section 61 - Tarif Regulations: The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:-- (a) the principles and methodologies specified by the Central Commission for determination of the tariff applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration, transmission and distribution for determination of tariff. (3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required. (4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. (5) The Commission may require a licensee or a generating company to comply with such procedures as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover. (6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would also need to be kept in mind in addition to the average cost of supply. Tariff for agricultural use may be set at different levels for different parts of a state depending of the condition of the ground water table to prevent excessive depletion of ground water. Section 62 (3) of the Act provides that geographical position of any area could be one of the criteria for tariff differentiation. A higher level of subsidy could be considered to support poorer farmers of the region where adverse ground water table condition requires larger quantity of electricity for irrigation purposes subject to suitable restrictions to ensure maintenance of ground water levels and sustainable ground water usage. 4. Extent of subsidy for different categories of consumers can be decided by the State Government keeping in view various relevant aspects. But provision of free electricity is not desirable as it encourages wasteful consumption of electricity besides, in most cases, lowering of water table in turn creating avoidable problem of water shortage for irrigation and drinking water for later generations. It is also likely to lead to rapid rise in demand of electricity putting severe strain on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n licensee to ensure that second distribution licensee does not resort to cherry picking by demanding unreasonable connection charges. The connection charges of the second licensee should not be more than those payable to the incumbent licensee." 8.5 Cross-subsidy surcharge and additional surcharge for open access - 8.5.1 National Electricity Policy lays down that the amount of cross-subsidy surcharge and the additional surcharge to be levied from consumers who are permitted open access should not be so onerous that it eliminates competition which is intended to be fostered in generation and supply of power directly to the consumers through open access. A consumer who is permitted open access will have to make payment to the generator, the transmission licensee whose transmission systems are used, distribution utility for the wheeling charges and, in addition, the 17 cross subsidy surcharge. The computation of cross subsidy surcharge, therefore, needs to be done in a manner that while it compensates the distribution licensee, it does not constrain introduction of competition through open access. A consumer would avail of open access only if the payment of all the charges lead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dependent upon the geographical position of any area, the nature of supply and the purpose for which the supply is required. The State Regulatory Commission are bound by the direction issued by the State Government for determining the tariff under section 108 of Electricity Act, 2003, which is to the following effect : "Directions by State Government. (1) In the discharge of its functions, the State Commission shall be guided by such directions in matters of policy involving public interest as the State Government may give to it in writing. (2) If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the State Government thereon shall be final." 34. From the reading of the provisions of the Electricity Act, National Electricity Policy and National Tariff Policy, it is clear that the tariff determined by the State Regulatory Commission is dependent upon various factors like purpose of electricity, usages of electricity, time of electricity (time of day tariff), type of industry, supply of voltage, power factor, cross subsidy for domestic as well as agriculture user, welfare of the employees of the utilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the 14 companies were available with the Ld. TPO and therefore, TPO had rightly applied the arithmetic mean of power supply by it to 14 consumers. 38. In support of its case, the assessee has relied upon the following decisions as mentioned hereinabove. i. DCIT Vs. M/s. Balrampur Chini Mills Ltd. ii. ACIT Vs. M/s. Philips Carbon Black Ltd. iii. ACIT Vs. M/s. Tamilnadu Newsprint and Papers Ltd. iv. Shah Alloys Ltd Vs. DCIT. v. Godawari Power and Ispat Ltd Vs. DCIT. 39. The first judgment relied upon by the assessee is DCIT Vs. M/s. Balarampur Chini Mills Ltd in ITA No.1672/Kol/2019 dated 05.05.2021. In this case, the Tribunal has adopted the rate charged by power generating unit and benchmarked the transactions accordingly. However, while doing so, the Tribunal has relied upon the decisions of jurisdictional High Court in the case of M/s. Electrosteel Casting Limited, Graphite India Ltd., M/s. Kanoria Chemicals and Industries Ltd, decision of Hon'ble Gujarat High Court in the case of Gujarat Alkalies and Chemicals Limited and also the decision of Hon'ble Chhattisgarh High Court in the case of Godawari Power and Ispat Limited. Ironically all the decisions relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of distinguished facts in the present case wherein the assessee itself had benchmarked the transactions by following the CUP method under Section 92C of the Act and therefore, also, this judgment is not applicable to the facts of the case 43. The last decision relied upon by the assessee is Godawari Power and Ispat Limited Vs. DCIT in ITA No.42/RPR/2022 dt.24.04.2023 for AY.2017-18. Interestingly, much water has been flown after A.Y.2017-18 by way of insertion of the Explanation to Section 80IA(8) of the Act whereby the decision of the market value has been provided by the assessee. In view of the above, none of the judgments relied upon by the assessee are applicable to the facts of the present case. Recently, the hon'ble Supreme Court in the case of Jindal Power Steel (supra) has held in Para 32 reproduced hereinabove whereby it has been held that in the absence of definition of market value, the prices determined by the State Utility what represented the market value of the goods and services. However, now the Act is clear which guides how to determine the market value and how the goods and services and for that purposes, either the prices which the goods and services in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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