Shah Alloys Limited, Ahmedabad V. The DCIT, Cicle-4(1)(1), Ahmedabad

ITA 1417/AHD/2019

AI Insights

The case involves Shah Alloys Ltd., which appealed against the decision of the Commissioner of Income Tax (Appeals) confirming the addition made by the Assessing Officer based on the Transfer Pricing Officer's adjustment regarding the purchase of electricity from its group company, SAL Steel Ltd. The primary contention was whether the transaction of purchasing electricity from the CPP of SAL Steel Ltd. was at an Arm's Length Price. The Tribunal considered various judgments, including those from the Hon'ble High Court of Gujarat, which supported the assessee's position that the market rate charged by the CPP from the processing house is the correct rate for compliance with the conditions specified in section 80IA of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114308 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 08-09-2019
• Other Referred Cases: DCIT Vs. Vishal Fabrics Ltd., Jayant Agro Organics Ltd. vs. DCIT, CIT vs. Gujarat Alkalies & Chemicals Ltd., CIT vs. Alembic Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Transfer pricing; Question of law; Initiation of penalty proceedings; Revised return; Set aside
• Section: 271(1)(c); 143(3); 80IA; 144C; 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Shah Alloys Limited 5/1, Shreeji House, B/h M J Library, Ashram Road, Ahmedabad PAN: AADCS0474L (Appellant) Vs The DCIT, Circle-4(1)(1), Ahmedabad (Respondent) Assessee Represented: Shri S.N. Soparkar, Sr. Adv. & Ms. Urvashi Shodhan, A.Rs. Revenue Represented: Shri Samir Sharma, CIT-DR Date of hearing : 28-03-2023 Date of pronouncement : 21-06-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 28.06.2019 passed by the Commissioner of Income Tax (Appeals)-13, Ahmedabad arising out of the assessment order passed under section 143(3) r.w.s. 92CA(3) r.w.s. 144C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2014-15. ITA No. 1417/Ahd/2019 Assessment Year 2014-15 I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 2 2. The brief facts of the case is that the assessee company is engaged in the business of Steel manufacturing. For the Assessment Year 2014-15, the assessee filed its revised Return of Income declaring a loss of Rs. 82,46,57,050/-. As there were Specified Domestic Transactions, the case was referred to Transfer Pricing Officer (TPO) to determine the Arm’s Length Price. The Assessee having its 40 megawatt capacity Power Plant located at Santej near Ahmedabad. The power plant functions based on waste heat recovery boiler and fluidized bed combustion boiler. The assessee also sells surplus power generation through the State Electricity Board Grid. 2.1. The group company namely SAL Steel Ltd. (SSL) is having its Captive Power Plant located at Gandhidham near Kandla Port and supply the same to the assessee through wheeling mechanism as per the group captive policy as under: “• The total power plant capacity of SSL is around 40MW. The assessee holds 38% of the equity share capital of SSL and therefore as per the said policy SSL can sell upto 13.5MW to the appellant. • SSL cannot sell this power to any other company not it can evacuate this power in the grid, if assessee does not buy the same. On the other hand, if assessee does not buy the power from SSL the assessee cannot run its own operations because the assessee is dependent on the power purchased from GEB as well as under this group captive policy. • Further, CPP owner SSL does not required this much power and hence it has no option but to supply maximum power to the assessee. • As per the understanding between SSL and the assessee, the assessee will buy power from SSL at such rate which covers the cost of generation of power in the hands of SSL and it leaves normal margin in the hands of SSL.” 2.2. During the Financial Year, SSL sold power to the assessee at the price Rs. 5/- per unit. The direct cost of generation of power in the hands of SSL was Rs. 4.32 per unit. This is based on the Cost I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 3 Accountant certificate computing the actual cost of power generation in SSL during the Financial Year 2013-14. This power is evacuated by SSL in GE grid at Gandhidham. The above cost is direct cost of production (excluding depreciation). Thus the price of power as against the rate of Rs. 5/- per unit is very much in order. The TPO disallowed the expenses claimed by the assessee for purchase of power from SSL of Rs. 10,75,03,219/- by passing a detailed order. Following TPO’s order, the Assessing Officer made an addition of Rs. 10,75,03,219/-. 3. Aggrieved against the same, the assessee filed an appeal before Commissioner of Income Tax (Appeals), Ahmedabad. The ld. CIT(A) considered the submission of the assessee and dismissed the same observing as follows: “.....On the basis of facts of the case and in law, it is held that the contention that the CPP performs all the three functions i.e. generation, transmission and distribution is factually incorrect. Further the fact that the block of the main receiving station pre dates the CPP was also was conceded by the assessee before the TPO. This station was used by the Appellant company to step down the power drawn from the grid at 132KV even before CPP came into existence. Thus, the TPO has rightly held that both from the point of view of functions performed and assets the choice of the tested party is wrong. The TPO has further noted that "It needs to be emphasized here that on account of this cardinal fault alone, even without taking into account the need for multifarious adjustments to the CUP used by the assessee company as enumerated in the show cause notice, the TP analysis done by the assessee company is liable for rejection." The fact that power from the CPP is generated only at 32 KV was conceded by the Appellant before the TPO. It was conceded by the assessee company that to price the market value of power generated at 32KV it has used CUP of power bought at 132KV. This admission by the Appellant Company itself negates its choice of tested party. Because the very fundamental of choice of tested party is based on wrong assumptions. Therefore, for the reasons discussed above, it is held that the Appellant company is not purchasing power from CPP at Arms length and transfer pricing adjustments were rightly done by the TPO and the amount of Rs. 10.75,03,219 by way of the Transfer pricing adjustment made by the TPO as per his order u/s 92CA(3) dated 23/10/2017 by revising down the transaction of sale of electricity by way of the CPP of the group company SAL Steel Ltd. to the I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 4 appellant company Shah Alloys Ltd by the same amount is here by upheld. This ground of appeal is dismissed. All related grounds of appeal are dismissed.” 4. Aggrieved against the same, the assesse is in appeal before us raising the following Grounds of Appeal: 1. Ld. CIT(A) erred in law and on facts confirming addition made by AO of Rs. 10, 75, 03, 219/- transfer pricing adjustment done by TPO in the order u/s. 92CA (3) of the Act. 2. Ld. CIT(A) erred in law and on facts to hold the transaction of purchase of electricity by appellant company from Captive Power Plant (CPP) of the group company was not at Arm's length price. 3. Ld. CIT(A) gravely erred in law and on facts in refusing to admit additional submissions under Rule 46A in justification of purchase price of power at Arm's length price. 4. Ld. CIT(A) erred in law and on facts confirming rejection of tested party by TPO holding the choice to be based on wrong assumptions. 5. Ld. CIT(A) erred in law and facts in not taking into consideration order of the subsequent year wherein no transfer pricing adjustment is made by TPO on the same set of facts. 6. Ld. CIT(A) erred in law and on facts in fallaciously concluding that the group company by charging higher price was trying to shift its losses to the appellant company misunderstanding the submissions that price charged was marginally higher than cost of production but definitely lower than power purchased from Uttar Gujarat Vij Company Ltd (a government agency). 7. Levy of interest u/s 234A, 234B, 234C & 234D of the Act is unjustified. 8. Initiation of penalty proceedings u/s 271(1)(c) of the Act is unjustified. 5. The Ld. Senior Counsel Shri S. N. Soparkar appearing for the Assessee submitted that the computation made by TPO based on CUP rates determined by him is clearly not applicable to the facts of the present case on two counts namely (i) first and foremost it applies only to captive power plants, (ii) it is big fallacy to compare the rates which are based on costing relating to large power plants which operate on large scale. Further it is submitted that SSL was incurring losses and it never claimed deduction u/s 80IA of the Act for generation or distribution of power and therefore, the question I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 5 of any adjustment u/s 80IA is unwarranted. Thus the case laws relied by the Ld. TPO are clearly distinguishable and not applicable to the facts of the assessee’s case. The Ld. Senior Counsel also taken us through the certificate from Cost Accountant, statement of electricity purchased and electric bills from UGVCL at pages 134 to 149 of the Paper book. Thus the Ld. Counsel submitted that the actual rate of power purchased from UGVCL comes to Rs. 11.46 per unit, whereas rate of power purchased from SSL is Rs.5 per unit. Even assuming the extra levies like electricity duty, fuel surcharge and time of usage charges then also net effective rates of UGVCL comes to Rs. 7.29 per unit which is still higher than rate paid by the assessee to SSL. 5.1. The Ld. Senior Counsel further submitted from para 4 of the appellate order, wherein the Ld. CIT(A) presumed that the entire case was on the ground that the assessee claimed deduction u/s. 80IA of the Act, which was factually incorrect. Thus the Ld. Senior Counsel submitted that the issue is directly covered in favour of the assessee by Co-ordinate Bench of this Tribunal in the case of DCIT Vs. Vishal Fabrics Ltd. reported in [2022] 139 taxmann.com 30 (Ahd-Trib.) and Mumbai Tribunal decision in the case of Jayant Agro Organics Ltd. reported in [2021] 133 taxmann.com 242 (Mumbai – Trib.) Thus the Ld. Senior Counsel submitted that for the next Assessment Years 2015-16, the TPO after careful understanding of the facts of the case not made any TP adjustment for the purchase of power by the assessee from SSL. Thus the downward adjustment made by the TPO is liable to be deleted. I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 6 6. Per contra, the Ld. CIT-DR Shri Samir Sharma appearing for the Revenue supported the order passed by the lower authorities. However the Ld. D.R. could not place any decisions in support of his arguments but requested to dismiss the assessee’s appeal. 7. We have given our thoughtful consideration and perused the materials available on record including the Paper Book and Case Laws filed by the assessee. The case of the assessee is that it has its Power Plant located at Santej near Ahmedabad and M/s. SAL Steel Ltd. has its Captive Power Plant located at Gandhidham near Kandla Port. The assessee purchased power from SSL at the price of Rs. 5/- per unit, whereas the direct cost of generation of power in the hands of SSL was Rs. 4.32 per unit. Further the actual rate of power purchased from UGVCL is Rs. 11.46 per unit. 7.1. It is seen that the TPO has mistakenly assumed that there is a transfer of electricity from the CPP of the assessee to another manufacturing unit and the assessee is therefore an eligible unit referred to in Section 80(IA)(8) of the Act. Thus the entire TP order is thereafter based on the assumption and determination of the Arm’s Length Price was made as per the provisions of Section 92BA(iii) of the Act. But however the case of the assessee and the facts are absolutely different. Since the assessee’s power plant is located at Ahmedabad and SSL Power Plant located at Gandhidham and the power is transferred through the transmission and distribution utility company namely Gujarat Energy Transmission Corporation Limited (GETCO). The assessee is liable to pay applicable electricity power duty and taxes etc. for the I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 7 purchase of the power. However the very same TPO for the next Assessment Year 2015-16 accepted the contention of the assessee and in his Transfer Pricing order dated 23-10-2018 has not made any adjustments on purchase of power. 7.2. Further this issue has come up for consideration in assessee’s own case before the Hon’ble High Court of Gujarat in Tax Appeal No. 2092 of 2020 dated 22-11-2011 wherein the Revenue raised the question “whether the Appellate Tribunal was right in law and on facts in deleting the addition made in respect of adjustment of electricity price charged by CPP Unit from general unit?”, wherein the Hon’ble High Court of Gujarat has not even admitted the above questions framed by the Revenue observing as follows: “.....3. With respect to Question [B], the issue pertains to sub Section (8) of Section 80IA of the Income Tax Act, 1961. The assessee had a CPP Unit generating electricity, which was supplying it to a general unit. The electricity generated is being supplied to other consumers also. The CPP unit charged Rs.5.40 ps. per unit from the general unit. The Assessing Officer applying sub-Section (8) of Section 80IA restricted the same to Rs.5.32 ps. per unit and, thereby, restricted the deductions claimed by the assessee under Section 80IA of the Act. This restriction was primarily on the basis that the rate of Rs.5.40 ps. charged by Gujarat Electricity Board (“ GEB” for short) was inclusive of 8 paise per unit of electricity duty. This component of electricity duty the Assessing Officer discarded for the purposes of ascertaining market value of the electricity generated by the CPP Unit and supplied to its general unit. 4. CIT (Appeals) confirmed the view of the Assessing Officer on the same line of reasoning. The Tribunal, however, on further appeal by the assessee, reversed the orders passed by the Revenue authorities referring to and relying upon the decisions of other Tribunals. The Tribunal was of the opinion that the market value of the electricity supplied by the CPP Unit to the general unit would be the same being charged by GEB from the consumers. 5. Counsel for the Revenue contended that the component of 8 paise per unit was the electricity duty which GEB was not authorized to retain but had to pass on to the Government. In essence, GEB was only collecting 8 paise per unit as electricity duty for and on behalf of the Government. He I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 8 submitted that the market value of the electricity should be reckoned on Rs.5.32 ps. per unit as was done by the Revenue authority. 6. Under sub-Section(8) of Section 80IA of the Act, if it is found that where any goods or services held for the purposes of the eligible business are transferred to any other business carried on by the assessee or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the eligible business and in either case the consideration for such transfer does not correspond to the market value of such goods as on the date of the transfer, then for the purposes of deduction under Section 80IA in case of the eligible business as if the transfer had been made at the market value of such goods or services. It is in this context that the question of substituting the actual consideration by the market value comes into picture. 7. We may notice that the Tribunal did not accept the contention of the assessee that the electricity is neither goods nor services and that, transfer of electricity, therefore, would not be covered under sub-Section (8) of Section 80IA of the Act. However, in so far as the Tribunal's reasoning to adopt the market value of the goods at Rs.5.40 ps. per unit is concerned, we find no error. Undisputedly, GEB supplied the electricity to its consumers at the same rate. This, therefore, was a market value of the electricity supplied by the CPP Unit to the general unit. The fact that this amount of Rs.5.40 ps. comprises of a component of 8 paise, which was electricity duty, to our mind, would make no difference in so far as the market value is concerned. To a consumer, the price being paid remains 5.40 ps. per unit. The fact that the seller retains only Rs.5.32 ps. out of the said collection and passes on 8 paise per unit to the Government in the form of electricity duty, to our mind, would make no difference. This question is, therefore, not required to be considered.” 8. In the case of Vishal Fabrics Ltd. cited supra wherein it has been held as follows: “...10. We have further considered the judgment passed by the Coordinate Bench in the case of Gujarat Fluorochemicals Ltd. vs. DCIT, Vadodara reported in, (2018) 97 taxmann.com 10 (Ahmedabad – Trib.) on the similar issue pertaining to A.Y. 2012-13 i.e. after the insertion of domestic TP provisions. We find that relying upon the judgment passed by the Hon’ble Jurisdictional High Court in the case of Gujarat Fluorochemicals Ltd. vs. DCIT, Vadodara (supra) the Coordinate Bench was pleased to hold that in case of Captive Power Plant eligible for deduction under Section 80IA, the market rate at which the receiving unit is procuring the electricity can be adopted as the sale price by the CPP. The relevant portion whereof is as follows: “ “.....31. So far as the issue on merit is concerned, the Hon'ble Gujarat High Court in the of Gujarat Alkalies and Chemicals Ltd. has considered the following question: I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 9 Whether the Tribunal was right in law in allowing the assessees claim of deduction of Rs. 1954 crores u/s. 80IA(4) of the l. T. Act, 1961, when the assessee had adopted rate power generation at Rs.4.73 per unit, rate on which the GEB supplied power to its consumers, ignoring me rate of Rs.2.36 per unit, the rate on which power generating company supplied its power to GEB?" 32. The Hon'ble High Court has replied this question by recording the following finding: "3. Since both the Issues are covered by various judgments of this Court, we do not find it necessary to record facts at any length. Division Bench of this Court by judgment dated 22.11.2011 in Tax Appeal No.2092/2010 in somewhat similar controversy observed as under: "3. With respect to Question [8], the issue pertains to sub Section (8) of Section 80IA of the Income Tax Act, 1961. The assessee had a CPP Unit generating electricity, which v/as supplying it to a general unit. The electricity generated is being supplied to other consumers also. The CPP unit charged Rs. 5.40 ps. per unit from the general unit. The Assessing Officer applying sub-Section (3) of Section 80IA restricted the same to Rs. 5.32 ps. per unit and, thereby, restricted the deductions claimed by the assessor under Section 80IA of the Act. This restriction was primarily on the basis that the rate of Rs. 5.40 ps charged by Gujarat Electricity Board ("GEB" for short) was inclusive of 8 paise per unit of electricity duty. This component of "electricity duty the Assessing Officer discarded for the purposes of ascertaining market value of the electricity generated by the CPP Unit and supplied to its general unit. 4. CIT (Appeals) confirmed the view of the Assessing Officer on the same line of reasoning. The Tribunal, however, on further appeal by the assessee, reversed the orders passed by the Revenue authorities referring to and relying upon the decisions, of other Tribunals. The Tribunal was of the opinion that the market value of the electricity supplied by the CPP Unit to the general unit would be the same being charged by GEB from the customers. 5. Counsel for the Revenue contended that the component of 8 paise per unit was the electricity duty which GEB was not authorized to retain but had to pass on to the Government. In essence, GEB was only collecting 8 paise per unit as electricity duty for and on behalf of the Government. He submitted that the market value of the electricity should be reckoned on Rs. 5.32 ps. per unit as was done by the Revenue authority. 6. Under sub-Section(8) of Section 80IA of the Act, if it is found that where any goods or services held for the purposes of the eligible business are transferred to any other business carried on by the assessee or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the eligible business and in either case the consideration for such transfer does not correspond to the market value of such goods as on the date of the transfer, then for the purposes of deduction under Section 80IA in case of the eligible business as if the transfer had been made at the market value of such goods or services, it is in this context that the question of substituting the actual consideration by the market value comes info picture. 7. We may notice that the Tribunal did not accept the contention of the assessee that the electricity is neither goods nor services and that, transfer of electricity, I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 10 therefore, would not be covered under sub-Section (8) of Section 80IA of the Act. However, In so far as the Tribunal's reasoning to adopt the market value of the goods at Rs. 5.40 ps, per unit is concerned, we find no error. Undisputedly, GEB supplied the electricity to its consumers at the same rate. This, therefore, was a market value of the electricity supplied by the CPP Unit to the general unit. The fact that this amount of Rs. 5.40 ps. comprises of a component of 8 paise, which was electricity duty, to our mind, would make no difference in so far as the market value is concerned. To a consumer, the price being paid remains 5.40 ps. per unit. The fact that the seller retains only Rs. 5.32 ps. out of the said collection and passes on 8 paise per unit to the Government in the form of electricity duty, to our mind, would make no difference. This question is, therefore, not required to be considered." 4. This was followed in case of CIT v. Shah Alloys Ltd, in Tax Appeal No. 2093/2010. This was reiterated in Tax Appeal No. 1646/2010 in case of ACIT v. Pragati Glass Works (P.) Ltd. (order dated 30.1.2012), in which following observations were made : "7. To our mind, Tribunal has committed no error Assessing Officer and CIT (Appeals) while adopting Rs. 4.51 per unit as the value of electricity generated by eligible unit of assessee and supplied through its non eligible unit only worked out cost of such electricity generation. In fact CIT(Appeals) in terms recorded that Rs. 4.51 was computed as the reasonable value of the electricity generated by eligible unit of assessee- This amount included Rs. 4.17 per unit which was the cost of electricity generation and Rs. 0.34 per unit which was duty paid by the assessee to G£B for such power generation. Thus the sum of Rs. 4.51 per unit only represented the cost of electricity generation to the assessee. In Section 801 A(8) of the Act what required to be ascertained Is the market value of the goods transferred by .the eligible business, when such transfer is by eligible business to another non eligible business of the same assessee and the consideration recorded in the accounts of the eligible business does not correspond to market value of such goods. Term "Market Value" is further explained in explanation to said subsection to mean in relation to any goods or services, price that sucn goods or services will ordinarily fetch in the open market. To our mind sum of Rs. 4.51 per unit of electricity only represented cost of electricity generation to the assessee and not the market value thereof. It is not in dispute that the GEB charged Rs. 5 per unit for supplying electricity to other industries including non eligible unit of the assessee itself. Tribunal therefore, while adopting the said base figure and excluding excise duty therefrom to work out Rs. 4.90 as the market value of the electricity generated by the assessee, to our mind, committed no error, it can be easily seen that if the assessee were to supply such electricity or was allowed to do so in the open market, surely it would not fetch Rs. 4.51 per unit but Rs. 5 per unit as was being charged by GEB. Since the excise duty component thereof would not be retained by the assessee, Tribunal reduced the said figure by the nature of excise duty and came to the figure of Rs. 4,90 to ascertain the market value of electricity generated by the- eligible,' unit and supplied to non eligible business of the assessee. No error was committed by the Tribunal. No question of law therefore, arises. Tax Appeal is dismissed." 5. Issue once again reached the Division Bench of this Court in case of CIT vs Alembic Ltd. in Tax Appeal No. 471/2009 and connected appeals. The Division Bench referring to earlier judgments of the Court held as under. "11. We have considered the submissions made by the /earned counsel for the parties. We have also considered the case laws cited by the learned counsel for I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 11 the assessee. Taking into consideration the judgments of this court and other High Courts cited above, we are of the opinion that the Tribunal has rightly allowed the claim of the assessee. In that view of the matter we do not find any infirmity in the order of the Tribunal. Therefore, we answer question (C) and (D) in favour of the assessee and against the revenue." 6. Issues are thus considered on number of occasions by the Court and held against the Revenue. Questions are answered against the Revenue. Both the tax appeals are therefore, dismissed." This judgment of Hon’ble High Court is directly on the issue. Hon’ble Court has considered section 80IA(8), therefore, it is not justifiable at the end of ld. DRP to ignore the judgment of Hon’ble jurisdictional High Court. 33. Respectfully following the authoritative pronouncements of the Hon’ble jurisdictional High Court, we allow these grounds of appeal. We direct the AO to grant deduction under section 80IA(4) on the value of electricity supplied by the CPP to its manufacturing units by adopting the average rate of electricity supplied to the assessee by MGVCL, DGVCL.” We find from the order passed by the Ld. CIT(A) that apart from the above judgment passed by the Coordinate Bench in the case of Gujarat Fluorochemicals vs. DCIT (Supra) the Ld. CIT(A) further considered the judgment passed in the matter of CIT - LTU vs. Reliance Industries Ltd., reported in (2019) 102 taxmann.com 372 (Bombay). Further the identical ratio laid down by the Hon’ble Jurisdictional High Court in the case of PCITVadodara-1 vs. Gujarat Alkalies & Chemicals Ltd. was duly considered by the Ld. CIT(A) and finalized the order as follows:- “4.4 The facts of the case and the facts in the case of Gujarat Flurochemicals Ltd. referred supra are exactly the same hence, respectfully following the binding judgment of Hon’ble ITAT, Ahmedabad in this case it has to be held that the market rate charged by CPP from the processing house in this year is the correct rate which is in compliance with the condition specified in the explanation to section 80IA of the Act. Accordingly, the adjustment and the subsequent additions made by the AO towards sale of electricity by CPP amounting to Rs. 4,78,78,842/- is deleted AO is directed to delete the same.” Considering the entire aspect of the matter we find that the judgment particularly passed in the matter of Gujarat Fluorochemicals Ltd. vs. DCIT, Vadodara passed by the Coordinate Bench on the similar issue, the judgment passed by the Hon’ble Jurisdictional High Court in the case of Gujarat Alkalies & Chemicals Ltd. (Supra), the Ld. CIT(A) deleted the downward adjustment and subsequent additions made by the TPO/AO holding that in case of Captive Power Plant (CPP) eligible for deduction under Section 80IA the market rate at which the receiving unit is procuring the electricity can be adopted as sale price by the CPP which in our considered opinion is just and proper so as to warrant interference. Thus, the ground of appeal preferred by the Revenue is found to be devoid of any merit and found to be dismissed.” 9. Respectfully following the judgment of Jurisdictional High Court and Co-ordinate Bench of this Tribunal, we hereby set aside the I.T.A No. 1417/Ahd/2019 A.Y. 2014-15 Page No Shah Alloys Ltd. vs. DCIT 12 order passed by the Lower Authorities and thereby deleting the addition of Rs.10,75,03,219/- Transfer Pricing adjustment done by TPO. Thus the grounds raised by the assessee are hereby allowed. 10. In the result, the appeal filed by the Assessee is hereby allowed. Order pronounced in the open court on 21 -06-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 21/06/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद