SHYAM METALICS AND ENERGY LIMITED,KOLKATA vs. DCIT, CENTRAL CIRCLE 1(1),, KOLKATA

ITTPA 12/KOL/2026Status: HeardITAT Kolkata11 September 2026AY 2022-202323 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Shyam Metalics and Energy Limited, filed an appeal against the order of the Dispute Resolution Panel-2, New Delhi, for Assessment Year 2022-23. The appeal challenges a downward adjustment of Rs.1,39,01,47,760/- made by the Transfer Pricing Officer (TPO) concerning the transfer value of power from captive power plants. The assessee had claimed deductions under Section 80-IA for profits from electricity generation. The TPO accepted the revised transfer price for power from CPPs at Pandoli, Sambalpur, Odisha, but benchmarked the power from the Mangalpur Unit at Rs.3.08 per unit, leading to a reduction in the claimed Section 80-IA deduction. The assessee argued that this issue is covered by previous decisions of the Tribunal in its own case and by the Supreme Court in CIT v. Jindal Steel & Power Ltd.

What did the Tribunal hold?

Regarding Ground No. 1, the Tribunal noted that the facts of the assessee are identical to those considered in its own previous appeals for AYs 2017-18, 2018-19, 2020-21, and 2021-22, which were decided in favour of the assessee. The Tribunal also referred to the Supreme Court's decision in CIT v. Jindal Steel & Power Ltd. and the Calcutta High Court's decision in Pr. CIT v. Rungta Mines Ltd., which dealt with similar issues concerning the determination of the claim under Section 80-IA for captive power plants. The Tribunal found that the issue is squarely covered by these decisions. Therefore, the downward adjustment made by the TPO was deleted. Regarding Ground No. 3, the Tribunal, respectfully following the decisions in Hyundai Motors, India Cements, and Eris Life Sciences Ltd., held that the amount received under the MEIS is taxable as a revenue receipt due to the amended provisions of Section 2(24)(xviii). Thus, this ground raised by the assessee was dismissed. Ground No. 4 was not pressed by the assessee and was therefore dismissed. The appeal was partly allowed.

What were the issues?

1. (a) Whether, on the facts and in law, the TPO erred in making a downward adjustment of Rs.1,39,01,47,760/- in respect of the transfer value of power by the captive power plants at Pandloi, Sambhalpur, Odisha, under Section 92CA of the Income Tax Act, 1961. (b) Whether the methodology followed by the assessee to benchmark the arm’s length value of power transferred fulfilled internal CUP parameters, making the TPO's adjustment impermissible. (c) Whether the benchmarking of power generated by the eligible unit by the DRP/TPO was fallacious and suffered from infirmities, warranting deletion of the downward adjustment. Assessee's contention: The issue is covered by the Tribunal's decision in its own case for AYs 2017-18, 2018-19, 2020-21, and 2021-22, and by the Supreme Court in CIT v. Jindal Steel & Power Ltd. and the Calcutta High Court in Pr. CIT v. Rungta Mines Ltd. Revenue's contention: Relied on the orders of the TPO/AO. 2. (a) Whether the lower authorities erred in disallowing common expenditure of Rs.49,86,132/- by allocating it based on profitability instead of net assets deployed to eligible units under Section 80-IA. (b) Whether the disallowance of common expenses allocated to eligible units under Section 80-IA is unjustified and deserves deletion. 3. Whether the sum of Rs.37,56,947/- received under the Merchandise Exports from India Scheme (MEIS) was capital in nature and exempt from tax, and should be excluded from total income and book profit under Section 115JB. 4. (a) Whether the lower authorities erred in disallowing Rs.18,51,049/- on account of delayed payment of employee’s contribution to EPF & ESI under Section 36(1)(va). (b) Whether, in the alternative, deduction for delayed payment of employee’s contribution aggregating to Rs.18,51,049/- should have been allowed under Section 37/43B.

Which sections of the Income-tax Act were involved?

Section 80-IA,Section 92CA,Section 144C,Section 115JB,Section 36(1)(va),Section 37,Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Akkal Dudhewala, AR
For Respondent: Shri Vikas Singh, DR
Hearing: 24.08.2026Pronounced: 11.09.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Dispute Resolution Panel-2, New Delhi (hereinafter referred to as the “Ld. DRP)”] dated 27.12.2025 for the AY 2022-

23.2.

The grounds raised by the assessee are extracted below:

1.

(a) For that on the facts and in the circumstances of the case and in law, the TPO erred in making a downward adjustment of Rs.1,39,01,47,760/- in respect of the transfer value of power by the captive power plants at Pandloi, Sambhalpur, Odisha.

1.

(b) For that on the facts and in the circumstances of the case and in law, the methodology followed

The order continues below.

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