Section 92BA of the Income Tax Act
Income-tax Act, 2025: s.164
Section 92BA of the Income-tax Act, 1961 corresponds to section 164 (Meaning of specified domestic transaction) of the Income-tax Act, 2025.
Read section 164 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 92BA is Works Ltd v. Union of India: (2000) 2 SCC 536 and Rayala Corporation P. Ltd. v. Director of Enforcement (257 ITR 338), cited in 120 of the 188 judgments on BharatTax that turn on this section.
Leading authorities on Section 92BA
An omission of a statutory provision is distinct from a repeal, and Section 6 of the General Clauses Act does not apply to omissions, meaning that pending proceedings are not saved by this section.
When computing deduction under Section 80IA, specifically for inter-unit transfer of power, the benefit cannot be claimed based on rates chargeable by distribution licensees to consumers. The deduction must be computed based on the rate fixed by the Tariff Regulation Commission for sale by electricity generating companies.
A reference to the Transfer Pricing Officer (TPO) is invalid and bad in law, which renders consequential Transfer Pricing adjustments by the Assessing Officer liable for deletion.
For Section 80IA deductions, the market value of electricity supplied by a captive power plant (eligible unit) to its industrial unit (non-eligible unit) must be computed by comparing prices in the open market and those charged by State Electricity Boards to industrial consumers.
Deduction under Section 80IA is allowable for captive power generation. The price for calculating this deduction is the rate at which the electricity board supplies power to its consumers, rather than the rate at which power generating companies supply to the electricity board.
The Gujarat High Court in Voltamp Transformers Pvt. Ltd. held that the perspective of the assessee, a businessman, should be considered when determining commercial expediency, not solely the department's viewpoint. A businessman must act prudently to advance their business interests.
The transfer price for intra-group services, specifically the sale of power from a captive power plant to a manufacturing unit, can be benchmarked based on the price at which the manufacturing unit procures power from the State Electricity Board, especially when it reflects a reasonable and arm's length price.
The Assessing Officer cannot invoke provisions related to profit attribution or adjustment under section 80IA(9) (analogous to 80IA(8) and 80IA(10)) without material evidence to show an arrangement between the assessee and associated enterprises that resulted in profits exceeding what might be ordinarily expected.
Deductions under Section 80G are permissible even when CSR expenditure is disallowed under Section 37(1). The Tribunal upholds the CIT(A)'s order allowing the Section 80G deduction based on prior decisions.
The internal Comparable Uncontrolled Price (CUP) method is appropriate for benchmarking the transfer price of power supplied by an eligible unit to a non-eligible unit, where the power is consumed captively by the manufacturing unit.