IVL DHUNSERI PETROCHEM INDUSTRIES PVT. LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 11(1),, KOLKATA

ITTPA 4/KOL/2026Status: HeardITAT Kolkata11 September 2026AY 2022-202311 pages
AI SummaryAllowed

What were the facts?

The assessee, IVL Dhunseri Petrochem Industries Ltd., filed an appeal against the order dated 16.12.2025 of the Dispute Resolution Panel (DRP) for Assessment Year (AY) 2022-23. The assessee is engaged in manufacturing PET resins and claimed a deduction of Rs. 13,13,69,641/- for profits derived from its eligible captive power plant. The Transfer Pricing Officer (TPO) proposed a downward adjustment of Rs. 22,11,08,243/- to the transfer price of power from the captive power plant. The Assessing Officer (AO) restricted this adjustment to the extent of the deduction claimed under Section 80-IA. The DRP dismissed the assessee's objections, and the AO passed the final assessment order. The assessee argued that the issue was covered by previous decisions in its own case and by the Supreme Court.

What did the Tribunal hold?

The Tribunal noted that Ground No. 1 was not pressed by the assessee and was therefore dismissed. Regarding Ground No. 2, the Tribunal observed that the facts in the present case were identical to those in the assessee's own case for AY 2020-21, which was decided in favour of the assessee by a coordinate bench. This decision, in turn, relied on previous pronouncements including those from the Calcutta High Court and the Supreme Court in the case of Jindal Steel & Power Ltd. The Tribunal found that the assessee's method of benchmarking the arm's length price (ALP) of power transferred from its captive power plant to its non-eligible units using the Average Annual Landed Cost (AALC) of power procured from the State Electricity Board (SEB) as an internal CUP was appropriate. The Tribunal reasoned that the SEB's rate for supplying electricity to industrial consumers should be considered the market value for computing deductions under Section 80-IA. Consequently, the Tribunal set aside the orders of the DRP, TPO, and AO, directing the deletion of the downward adjustment of Rs. 22,11,08,243/-. Ground No. 2 was allowed.

What were the issues?

1. Whether the final assessment order passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961, was barred by limitation as per section 153 of the Act, and thus liable to be quashed. 2. (a) Whether the TPO erred in making a downward adjustment of Rs. 22,11,08,243/- in respect of the transfer value of power by the captive power plant. (b) Whether the methodology followed by the assessee to benchmark the arm's length value of power transferred by the captive power plant fulfilled internal CUP parameters, making the TPO's adjustment impermissible. (c) Whether the benchmarking of the arm's length value of power by the DRP/TPO was fallacious and suffered from infirmities, warranting deletion of the downward adjustment. Assessee's contentions: - Ground No. 1 was not pressed. - Ground No. 2 is covered by the jurisdictional Calcutta High Court's decision in PCIT Vs Dhunseri Ventures Ltd. and a coordinate bench's decision in its own case (ITA No.1712/Kol/2024). The issue is also settled by the Supreme Court in Jindal Steel & Power Ltd. Therefore, the appeal should be allowed. Revenue's contentions: - The Ld. CIT-DR relied on the orders of the DRP/TPO/AO.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 153,Section 92CA,Section 80IA,Section 10B

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 Md. Gayasuddin Ansari, DR
Hearing: 18.08.2026Pronounced: 11.09.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Dispute Resolution Panel (hereinafter referred to as the “Ld. CIT(A)”] dated 16.12.2025 for the AY 2022-23. 2. The assessee has raised following grounds of appeal:-

““1. For that on the facts and circumstances of the case and in law, the final assessment order passed u/s 143(3) r.w.s 144C(13) of the Act on 08.01.2026 was barred by limitation in as much the time limit for passing of the final assessment order as provided u/s 153 of the Act was 31.03.2025 and in that view of the matter, the assessment order being bad in law

The order continues below.

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