ACIT,CORPORATE CIRCLE-(3)(1), CHENNAI vs. M/S TAMIL NADU NEWSPRINT AND PAPEERS LIMITED, CHENNAI

आदेश /O R D E R

PER MANJUNATHA. G, ACCOUNTANT MEMBER:

This appeal filed by the revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-16, Chennai, dated 18.02.2022 and pertains to assessment year 2016-17.

:-2-: IT(TP)A. No: 47/Chny/2022 which necessary petition for condonation of delay along with affidavit explaining the reasons for the delay has been filed. The ld. DR, further submitted that to file appeal substantial time was consumed since the comments of the TPO were required to take a decision on filing further appeal. The delay in filing appeal is neither willful nor wanton but for the unavoidable reasons, therefore, delay may be condoned in the interest of advancement of substantial justice.

:-3-: IT(TP)A. No: 47/Chny/2022 2. The Id. CIT(A) has erred in allowing assessee's appeal without proper appreciation of facts. 3. The ld. CIT(A) has erred in considering the non- eligible unit i.e., power consumption unit of M/ s. TNPL Pvt Ltd as the tested party instead of power generating unit. 4. The ld. CIT(A) erred in adopting the price charged by a distribution of Power i.e. TANGEDCO as a Comparable uncontrolled price (CUP) for the price to be charged by the eligible unit of the assessee who has not performed any distributor activity. 5. The Ld. CIT(A) failed to appreciate the fact where the claim of 80IA(8) is made, the ALP for the purpose of specified domestic transaction is the price which would be applicable, in the transaction between two unrelated entities in uncontrolled conditions. 6. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer be restored.”

:-4-: IT(TP)A. No: 47/Chny/2022 had also supplied minor quantity of power to M/s. R S Yarana Power Pvt. Ltd @ Rs. 9.10 per unit.

:-5-: IT(TP)A. No: 47/Chny/2022 8. In pursuant to TP adjustment as suggested by the TPO, the Assessing Officer has passed final assessment order u/s. 143(3) r.w.s. 144C(3) of the Act and determined total income of Rs. 173,31,56,057/- and made additions towards transfer pricing adjustment, in respect of power purchased from captive power generation units amounting to Rs. 37,3648,879/-.

:-6-: IT(TP)A. No: 47/Chny/2022 “4.3. I have carefully considered the matter. Only issue to be decided is whether the cost of electricity is to be taken at Rs.6.35 as claimed by assessee or at Rs.5.11 which was the rate the generating units got from supplies given to TANGEDCO. The argument given by the T.P.O. that since the generating units are not into business of power transmission, the sale price should be at the rate the generating units sold to TANGEDCO sounds appealing at the first instance. This is because the rate charged by the power distribution company comprises of the cost charged by generating unit as well as the cost incurred for transmission of the power. As stated earlier, the captive units of assessee were not incurring the costs which a distribution company has to incur over and above the purchase price of power. But there are clutch of decisions of Hon'ble ITAT and that of Hon'ble High Courts wherein under similar kinds of situations, it has been held that the price of electricity received by captive power generating unit should be fixed at the rate at which the state power distribution entities supply power to consumers in the open market. 4.3.1 Appellant had relied on decision of Hon'ble ITAT, Kolkata in the case of Star Paper Mills Ltd Vs. DCIT[ITA No.127/Kol/2021decided on 26.10.2021]. The facts narrated at para (5) and (6) of the order are extracted as under: "5. Briefly stated, the facts of the case are that, the assessee company is engaged the business of manufacture & sale of paper having its factory situated at Saharanpur, in the State of Uttar Pradesh. The assessee had setup a captive power plant [hereinafter referred to as 'CPP' or 'eligible unit'] to meet the power requirements of the paper manufacturing unit (hereinafter referred to as 'manufacturing unit' or 'non-eligible unit']. The CPP commenced its activity on 06.11.2006. The CPP qualified as an 'eligible unit' engaged in the business of generation of power under Section 80-IA(4)(iv) of the Act. The assessee accordingly prepared stand-alone accounts of said eligible unit in terms of Section 80-IA(5)/(7) of the Act. Further, as the power generated by the assessee was captively consumed by the paper manufacturing unit, such transfer of power qualified as a reportable specified domestic transaction in terms of Section 80-IA(8) read with Section 92BA of the Act. The transfer pricing auditor duly reported this intra-unit transfer in Form 3CEB filed for AY 2016-17 and the said specified domestic transaction was benchmarked following the Comparable Uncontrolled Price Method [hereinafter referred to as CUP). Perusal of the Transfer Pricing Study Report placed at Pages 31 to 67 of the paper-book, reveals that the non-eligible unit was taken as the 'tested party' as it was procuring power both from CPP as well as Paschimancla Vidyut Vitran Nigam Ltd i.e, State Electricity Board (hereinafter referred to as 'SEB'). The transfer price of power supplied by the CPP to the paper manufacturing unit was accordingly benchmarked at the annual

:-7-: IT(TP)A. No: 47/Chny/2022 average of the landed cost at which power was being purchased by the non-eligible unit from the SEB i.e. Rs.8.41 per unit. Having regard to the aforesaid transfer price of power, the profits of the CPP was worked out by the assessee at Rs. 19,03,49,419/- which was eligible for deduction u/s 80-IA of the Act. However as the Gross Total Income, after setting off brought forward losses was NIL, the assessee did not claim any deduction u/s 80-IA in the return of income filed for AY 2016-17. 6. The case of the assessee was selected for scrutiny on CASS parameters which inter alia included transfer pricing risk parameter. The AO accordingly referred the case of the assessee to the Transfer Pricing Officer [hereinafter referred to as 'TPO] u/s 92CA(2) of the Act. After examining the Transfer Pricing Study Report and the details furnished by the assessee, the TPO show caused the assessee to explain as to why the power generated by the eligible unit and transferred to the non-eligible unit should not be benchmarked at the rate at which power generating stations sold electricity to exchange boards/distribution companies. In response, the assessee filed detailed submission on 23.10.2019. The TPO however was not agreeable to the same. According to him, the CPP was a power generating unit and the SEB from which the non-eligible unit purchased power, was a distribution unit and therefore the comparison of CPP with SEB was unwarranted, since they were functionally dissimilar. Referring to the judgment of the Hon'ble Calcutta High Court in the case of CIT VS ITC Ltd (236 Taxman 612), the TPO observed that the rate at which power was being purchased by the manufacturing unit from SEB cannot be taken as the open market value at which power could be sold by CPP in the market. According to the TPO, the benefit u/s 80-IA of the Act can be claimed only with reference to the rate fixed by Tariff Regulatory Commission for sale of electricity by power generating companies. According to him, the rate at which non- eligible unit purchased power from distribution unit did not represent the market price. The TPO therefore rejected the benchmarking analysis performed by the assessee and substituted the transfer price of power determined by the assessee at Rs.8.41 per unit with the tariff of Rs.3.73 per unit, as notified by UPERC for sale of power by the power generation stations to its State distribution company, MVNNL. Accordingly, the arm's length sale value of the eligible unit was computed at Rs.10,91,95,086/- (Rs.3.73 per unit X 2,93,03,540 units] as opposed to Rs.24,63,35,653/- (Rs.8.41 per unit X 2,93,03,540 units] reported in Form 3CEB, resulting in downward adjustment of Rs. 13,71,40,567/-." The facts in the cited case are almost identical to the case of present assessee except that in the case relied upon, the eligible unit did not sell electricity to the State Electricity Board. However, even in that case, the rate was fixed by T.P.O. at the price for which power generating units were required by state

:-8-: IT(TP)A. No: 47/Chny/2022 law to sell to the state distribution company. The Hon'ble Tribunal, after threadbare, discussion of facts and after referring to a number of judicial pronouncements on the matter, took the view that the rate at which the non-eligible unit paid for per unit of power to the State Electricity Board was the right benchmarked price. While doing so, the Hon'ble Tribunal also distinguished the case of ITC Ltd (supra) which was relied upon by the AO. Para 25 of the order is extracted below in this connection. "25. As far as the Revenue's reliance on the judgment of the Hon'ble Calcutta High Court in the case of ITC Ltd (supra) is concerned, we note that it is distinguishable on facts as well as in law and is thus not applicable to the assessee's case. In the decided case, the relevant year in question was Financial Year 2001-02 i.e. prior to the introduction of Electricity Act, 2003. Until then, the electricity generating companies could only sell or supply power to the State Power Utility or company engaged both in generation & distribution and that too at the tariffs rates prescribed by the Regulatory Commission. Therefore, in absence of any alternate rates, the High Court held that the price at which electricity generating company sold power to SEBS was the only available open market rate. However subsequent to the enactment of Electricity Act, 2003, the functioning of the power sector was liberalized as the business became de-regulated and it was legally permissible for the private CPPs to supply power to other consumers and the prices could be determined through competitive bidding process or any other mutually agreed terms. Hence, the decision of Calcutta High Court (supra) is not applicable to the relevant FY 2015-16 in question, i.e. post introduction of the Electricity Act, 2003."

:-9-: IT(TP)A. No: 47/Chny/2022 to consumers should be adopted as appropriate rate, whereas the TPO/AO considers the rate at which the power generating companies sells powers to power distribution companies. Therefore, he submitted that TPO/AO has rightly adopted rate at which the appellant sold surplus power to TANGEDCO for benchmarking power purchased from its captive power generation units. The ld. CIT(A), without appreciating relevant facts simply deleted additions made by the Assessing Officer. In this regard, he filed detailed written submissions on the issue which has been reproduced as under: “The appellant claimed deduction of 80IA of the IT Act on sale of electricity from the eligible business". The TP study in this case referred to TPO was determination of arm's length price on sale of electricity that was captively consumed by "other business' of the appellant company. 1. TP adjustment that has undergone TP study: This Specified Domestic Transaction (SDT) was referred to TPO. These transactions are presented in para 4.0 of the TP order. Attention is drawn to the table at P.No.4 of the TP order. The TPO briefed about the transaction of sale of power by power generation unit to power consumption unit (Sale of paper). 2. What is the nature of transaction: Assessee has power generation unit through various Turbo Generator and listed at para 7 .1. The power generated by those eligible units were captively consumed by paper mill (other business"). Whether power generated from those eligible units and sold/captively consumed by other business was at market rate or not was determined by the TPO. What is the arm's length to be determined is sale of Power by the power generation units of eligible business and not

:-10-: IT(TP)A. No: 47/Chny/2022 purchase of power by "other business" from open market. 3. Legislative History: Hon'ble Supreme Court in the case of CIT Vs Glaxo Smithkline Asia (P) Limited [2010] in 195 Taxmann 35, has examined section 40A(2) and 80IA of the IT Act and directed Ministry of Finance and CBDT to enact special provisions in IT Act to deals such transactions empowering the AO to make adjustments to the income declared by the assessee having regard to the fair market value of the transactions between related parties. Thus, the AO can apply generally accepted methods of determination of arm's length price, including the methods provided under Transfer Pricing Regulations. It is as under; As far as the instant special leave petition was concerned, no interference was called for as the entire exercise was a revenue neutral exercise. Hence, the special leave petition filed by the department stood dismissed [Para 2] However, a larger issue was involved in the instant case. The main issue which needed to be addressed was, whether Transfer Pricing Regulations should be limited to cross-border transactions or be extended to domestic transactions. In the case of domestic transactions the under-invoicing of sales and over-invoicing of expenses ordinarily would be revenue neutral in nature, except in the following two circumstances having tax arbitrage- (i)lf one of the related companies is a loss making company and the other is a profit making company and profit is shifted to the loss making concern; and (ii)lf there are different rates for two related units [on account of different status, area-based incentives, nature of activity, etc.] and if profit is diverted towards the unit on the lower side of the tax arbitrage. For example, sale of goods or services from non-SEZ area, [taxable division}

:-11-: IT(TP)A. No: 47/Chny/2022 to SEZ unit [non-taxable unit} at a price below the market price so that taxable division will have less taxable profit and non-taxable division will have a higher profit exemption. [Para 4] All these complications arise in cases where fair market value is required to be assigned to the transactions between related parties in terms of section 40A(2). To get over this situation, the matter needs to be examined by the CBDT. The matter has been examined by the CBDT and it is of the view that amendments would be required to be made to the provisions of the Act, if such Transfer Pricing Regulations are required to be applied to domestic transactions between related parties under section 40A(2). [Para 5] In order to reduce litigation, certain provisions of the Act, like section 40A(2) and section 80- IA(l 0), need to be amended to empower the Assessing Officer to make adjustments to the income declared by the assessee, having regard to the fair market value of the transactions between the related parties. The Assessing Officer may thereafter apply any of the generally accepted methods of determination of arm's length price, including the methods provided under the Transfer Pricing Regulations. However, in a number of matters, the Assessing Officer is constrained by non-maintenance of relevant documents by the taxpayers as, currently, there is no specific requirement for maintenance of documents or of getting specific transfer pricing audit done by the taxpayers in respect of domestic transactions between the related parties. One of the suggestions which needs consideration is whether the law should be amended to make it compulsory for the taxpayers to maintain books of account and other documents on the lines prescribed under rule 1 OD in respect of such domestic transactions and whether the taxpayers should obtain audit reports from their chartered accountants so that the taxpayers would maintain proper documents and requisite books

:-12-: IT(TP)A. No: 47/Chny/2022 of account reflecting the transactions between related entities at arm's length price, based on generally accepted methods specified under the Transfer Pricing Regulations. Normally, the Supreme Court does not make recommendations or suggestions. However, in order to reduce litigation in complicated matters, the question of amendment, as indicated above, may require consideration expeditiously by the Ministry of Finance. In the meantime, the CBDT may also consider to issue appropriate instructions in this regard. [Para 6] This lead to enactment of special provisions of Specified Domestic Transaction in section 92BA, Requirement of report of an accountant in section 92E, 92F and Explanation in section 80IA(8) of the IT Act in Finance Act 2012, w.e.f. 1-4- 2013. This is applicable from AY 2013-14. The Explanation to section 80IA(8) introduced in Finance Act defines "market value" for the purpose of above said provision placed in Chapter X. The explanatory memorandum is as under: "Transfer Pricing Regulations to apply to certain domestic transactions Section 40A of the Act empowers the Assessing Officer to disallow unreasonable expenditure incurred between related parties. Further, under Chapter VI-A and section 104A, the Assessing Officer is empowered to re-compute the income (based on fair market value) of the undertaking to which profit linked deduction is provided if there are transactions with the related parties or other undertakings of the same entity. However, no specific method to determine reasonableness of expenditure or fair market value to re-compute the income in such related transactions is provided under these sections. The Supreme Court in the case of CIT Vs. Glaxo SmithKline Asia (P) Ltd., in its order has, after examining the complications which arise in cases where fair market value is to be assigned to transactions between domestic related parties, suggested that Ministry of Finance should consider appropriate

:-13-: IT(TP)A. No: 47/Chny/2022 provisions in law to make transfer pricing regulations applicable to such related party domestic transactions. The application and extension of scope of transfer pricing regulations to domestic transactions would provide objectivity in determination of income from domestic related party transactions and determination of reasonableness of expenditure between related domestic parties. It will create legally enforceable obligation on assessees to maintain proper documentation. However, extending the transfer pricing requirements to all domestic transactions will lead to increase in compliance burden on all assessees which may not be desirable. Therefore, the transfer pricing regulations need to be extended to the transactions entered into by domestic related parties or by an undertaking with other undertakings of the same entity for the purposes of section 404, Chapter VI-A and section 10AA. The concerns of administrative and compliance burden are addressed by restricting its applicability to the transactions, which exceed a monetary threshold of Rs. 5 crores in aggregate during the year. In view of the circumstances which were present in the case before the Supreme Court, there is a need to expand the definition of related parties for purpose of section 40A to cover cases of companies which have the same parent company. It is, therefore, proposed to amend the Act to provide applicability of transfer pricing regulations (including procedural and penalty provisions) to transactions between related resident parties for the purposes of computation of income, disallowance of expenses etc. as required under provisions of sections 404, 80IA, - l0AA, 80A, sections where reference is made to section 80-I4, or to transactions as may be prescribed by the Board, if aggregate amount of all such domestic transactions exceeds Rupees 5 crore in a year. It is further proposed to amend the meaning of related persons as provided in section 40A to include companies having the same holding company. This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the

:-14-: IT(TP)A. No: 47/Chny/2022 Assessment Year 2013-14 and subsequent assessment years." 4. What's market value in Specified Domestic Transaction? Section 80IA(8): Where any goods or services held for the purpose of eligible business are transferred to any other business carried on by the assessee - First limb Or Where any goods or services held for the purpose of any other business are transferred to eligible business carried on by the assessee In either case - Second limb If consideration recorded in the accounts of eligible business does not correspond to market value of such goods, then for the purpose of section 80IA(8), profit and gains of such eligible business shall be computed as if the transfer in either case had been made at market value of the goods as on date of transfer. 5. Here what is the good transferred? i. The good transferred or sold here is electricity. ii. The assessee company has generated power from eligible units and transferred to other business carried on by them. iii. It was captively consumed by other business carried on by the assessee. iv. Hence first limb of section 80IA(8) discussed above is attracted. 6. 'Market value' for the purpose of section 801A and arm's length price as per clause {ii} of section 92F Being the power generator in eligible units, the rate at which they can sell in open market to State Electricity Board is the "market value". All the power generation units have to either captively consume or sell to State Electricity Board. That is the market rate as per the explanation discussed above and that is needed for determination of arm's length price. The arm's length pnce 1s explained in the pictorial diagram enclosed along with this submission.

:-15-: IT(TP)A. No: 47/Chny/2022 7. What was the assessee's TP study or contention? The assessee in their TP study determined the arm's length of the captive consumption of "other business" by treating the purchase price of electricity from the power distribution company namely TANGEDCO and concluded that their transaction was within arm's length for the captive consumption. That rate is the retail market rate of power sold by power distribution companies of power in open market. If we follow the method of assessee, the entire purpose of legislation of section 92B, 92E and explanation to section 80IA consequent to direction of Supreme Court in the case of CIT Vs Glaxo Smithkline Asia (P) Limited [2010] in 195 Taxmann 35 will be defeated. 8. TP study by the TPO: The TPO has examined the transaction in the following line;  What we have to examine in TP study is the sale price of power generation units/eligible units to State Electricity Board.  The tested party is the power generation units i.e. eligible units' and not the captive consumption unit as contended by the appellant.  Because what the assesssee claimed deduction u/s 80IA was on sale of power of eligible business  Here, the determination of arm's length of eligible business only underwent TP study and not the other business of captive consumption.  That is what Hon 'ble SC has prescribed in its decision. 8.1 Issues discussed by TPO: Attention is drawn to para 7 .1 to 7.12 of the TP order. The TPO discussed the following parameters, exhaustively in the TP order: Para 7 .1 Inter unit transfer of power Para 7 .2 Bench marking of the transaction by the assessee, using AE as tested party.

:-16-: IT(TP)A. No: 47/Chny/2022 Para 7.3 Legislative history in 92BA, 92F and 80IA(8) of the IT Act. Para 7.4 Nature of Specified Domestic Transaction Para 7.5 Observation on CUP adopted by assessee and functional analysis. Para 7 .6 Difference between power generator and power distributor Para 7.7 Comparability factor Para 7.8 Choice of tested party and TP analysis Para 7.9 Bench marking adopted by TPO Para 7.10 Issue of show cause notice and assessee' s submission. Para 7 .11 Examination of reply given by the assessee Para 7.12 Computation of Arm's Length Hon'ble SC has mandated in the above said decision that every assessee has to maintain separate books of accounts for this purpose. In the present case, as per the TPO, tested party should be power generation unit and rate of electricity to be sold at market rate could be Rs.3.50 per unit as against Rs.6.55 per unit adopted by the assessee. The whole issue is summarised in a diagrammatic representation. A copy of it is enclosed. 9. Decision of CIT(A): With due regard, it is submitted that ld. CIT( A) did not accept the TP adjustment and held that power consumption unit only tested party and not the power generation unit. His decision is totally against the legislative intention of specified domestic transaction brought into the statute after the direction of Hon" ble Supreme Court in the case of CIT Vs Glaxo Smithkline Asia (P) Limited [2010] in 195 Taxmann 35.  This is exactly opposite to the TP study.  Here the TP study was on power generation unit eligible business  TP study was not on power consuming units/captive consumption- other business  The market value of power sold by eligible business to Regulatory Authority is the arm's length.

:-17-: IT(TP)A. No: 47/Chny/2022 10. Summary on the grounds of appeal of revenue: 1. The TP study was on determination of arm's length of eligible business that has claimed deduction u/s 80IA of the IT Act on sale of power by the power generation unit. 2. It was not on consumption of electricity by captive consumption unit of other business. If those units buy electricity from open market, the rate was retail purchase rate. However, that is not the case here. 3. Hon'ble SC has directed Ministry of Finance to enact separate legislation to determine arm's length in such specified domestic transaction. 4. Such legislation was enacted by parliament in Finance Act 2012. Accordingly, w.e.f. 1-4-2013 significant amendment was brought in the statue to address such specified domestic transaction. 5. TPO in compliance to the legislative enaction, determined the arm's length of the "eligible business" of the power generation units by comparing with the rate of other power generators. In view of the above, it is prayed that the decision of CIT(A) may be set-aside and the action of TPO may be upheld.”

:-18-: IT(TP)A. No: 47/Chny/2022 distribution companies supplies to consumers should be adopted to benchmark power purchased and consumed by the assessee from its captive power generation units.

:-19-: IT(TP)A. No: 47/Chny/2022 supplied power to power distribution companies. The relevant findings of the Tribunal are as under: 18.5 We have heard both the parties, perused materials available on record and gone through orders of the authorities below. We find that an identical issue has been considered by the Tribunal in assessee’s own case for assessment year 2011- 12 in ITA No.2412/Chny/2019 dated 12.12.2019, where the Tribunal under identical set of facts by following certain judicial precedents including the decision of Hon’ble Bombay High Court in the case of Reliance Industries Ltd., and the decision of Hon’ble Chhattisgarh High Court in the case of M/s.Godavari Power and Ispat Ltd., supra held that while computing deduction u/s.80IA for generation of power for captive consumption, the rate at which electricity board supply power to its consumers should be considered instead of the rate at which the power generating companies supply its power to the electricity board. The relevant findings of the Tribunal are as under:- “31. We have considered the rival submission and perused the materials available on record. 32. A perusal of the facts in the present case clearly shows that the assessee has been captively consuming the electricity generated from its wind mill as also the Heat Waste Recovery Treatment Plant. Admittedly, the assessee is entitled to the deduction u/s.80IA of the Act in respect of the electricity generated and consumed. This is not in dispute. The dispute has risen for computing the deduction u/s.80IA of the Act. The issue admittedly is covered by the decision of the Co-ordinate Bench of this Tribunal in the case of Sri Velayudhaswamy Spinning Mills Vs Deputy Commissioner of Income Tax referred to supra and as also the decision in the case of Eveready Spinning Mills vs. Assistant Commissioner of Income Tax referred to supra. A similar view has also been taken in the case of M/s. Saranya Textiles vs. The Assistant Commissioner of Income Tax, wherein one of us is a party. This view of ours is also supported by the decision of the Hon’ble Gujarat High Court in the case of Commissioner of Income Tax vs. Gujarat Alkalies Chemicals Limited reported in 395 ITR 247(Guj.), wherein it has been held that the deduction u/s.80IA was allowable to the for generation of power for

:-20-: IT(TP)A. No: 47/Chny/2022 captive consumption and that the rate of power generation at which the electricity board supplied power to its consumers rather than the rate at which the power generating companies supply its power to the electricity board was to be taken as the price. Further, this view has been supported by the decision of the Hon’ble Bombay High Court in the case of Commissioner of Income Tax vs. Reliance Industries Limited in I.T.A. No.1056/Chny/2016 dated 0.01.2019 and as also the decision of the Hon’ble Chhattisgarh High Court in the case of Godavari power and Ispat Limited reported in [2014] 42 Taxman.com 551 (Chhattisgarh). As it is noticed that the learned CIT(A) has followed judicial discipline by following the decision of this Tribunal in the case of Sri Velayudhaswamy Spinning Mills Vs Deputy Commissioner of Income Tax and Eveready Spinning Mills vs. Assistant Commissioner of Income Tax referred to supra, as it is noticed this view has also been approved by the Hon’ble High Courts referred to supra, we find no error in the order of the learned CIT(A) which calls for any interference. It may be mentioned here that the deduction u/s.80IA is the deduction from the total income of the assessee the profits and gains of an eligible undertakings. The Hon’ble Gujarat High Court has categorically admitted that the deduction u/s.80IA is permissible for captive consumption and even the rate at which the deduction is to be computed. Consequently, the issue is held in favour of the assessee and against the Revenue.” 18.6 In the present case, the facts are identical with that of the facts considered by the Tribunal in earlier year. The CIT(A) after considering relevant facts and also by following the decision of the ITAT, Chennai in the case of Eveready Spinning Mills (P) Ltd., vs. ACIT, (2012) 17 taxmann.com 254 and the decision in the case of Shri Velayudhaswamy Spinning Mills (P) Ltd., vs. DCIT, (2012) 19 taxmann.com 28 has deleted additions made by the AO by holding that market value of the power captively consumed should be computed considering the rate of power to a consumer in the open market and it should not be compared with the rate of power at which power could have been sold to SEBs because this is not the rate for which a consumer could have purchased power in the open market. Therefore, we are of the considered view that there is no error in the finding recorded by the ld.CIT(A) to delete additions made

:-21-: IT(TP)A. No: 47/Chny/2022 by the AO towards TP adjustment on deduction claimed u/s.80IA of the Act. Hence, we reject the ground taken by the Revenue.”