ACIT (CIR.) - 6(1)(2), MUMBAI vs. BHANDAR POWER LTD., MUMBAI

ITA 1908/MUM/2018Status: DisposedITAT Mumbai13 October 2025AY 2013-14Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)31 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the PPA's terms and tariff fixation were in line with industry practice and CERC regulations, demonstrating the assessee's bonafide. It also noted that the Transfer Pricing Officer had already determined the transactions to be at Arm's Length Price (ALP), negating the applicability of Section 80IA(10).

What were the facts?

The Revenue appealed against the deletion of disallowance of deduction under Section 80IA by the CIT(A). The assessee, engaged in electricity generation, claimed deduction for its power plant. The Revenue argued that Section 80IA(10) was attracted due to a Power Purchase Agreement (PPA) with group companies, suggesting the assessee earned more than ordinary profits.

What were the issues?

Whether the Power Purchase Agreement with group companies attracted Section 80IA(10) of the Income Tax Act, disallowing the deduction, and whether the transactions were at Arm's Length Price.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 80IA(10),Section 92CA,Section 92F

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Income Tax Appellate Tribunal, “B” BENCH MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

Hearing: 29.07.2025Pronounced: 13.10.2025

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal filed by the Revenue is against the order of Ld. CIT(A), Delhi, vide order dated 25.01.2018 passed against the assessment order by ITO 6(1)(4), Mumbai, u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 20.12.2016, for Assessment Year 2013-14. 2. Grounds taken by the Revenue are reproduced as under:

1.

On the facts and in the circumstances of the case and in law, the CIT(A) is not justified in deleting the disallowance of deduction u/s 80IA of the Income Tax Act of Rs. 203,13,43,740/-without considering the fact that the provisions of section 801A(10)

The order continues below.

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