Meghmani Finchem Ltd., Bharuch V. Dy.CIT,Circle-2(1)(1), Vadodara

ITA 245/AHD/2022

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Meghmani Finechem Ltd. appealed against the orders of the lower tax authorities concerning transfer pricing adjustments made on transactions involving the sale of power and steam between its units. The primary contention was the determination of the arm's length price (ALP) for these transactions, which the tax authorities had adjusted significantly. The Tribunal examined the methods used for benchmarking these transactions and the evidence provided by the assessee, ultimately deciding that the ALP for steam could not be nil but also found issues with the assessee's benchmarking method.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131532 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 21-06-2022
• Other Referred Cases: PCIT vs. Gujarat Alkali, Gujarat Fluro Chemicals vs. DCIT, DCIT vs. Vishal Fabrics, Shree Rayalaseema Hi Strength Hypo Ltd. vs. DCIT, Nectar Life Sciences Ltd. vs. DCIT, DCM Shriram Ltd. vs. DCIT
• Laws Referred To: Section 80IA of the Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Transfer pricing; Tax effect; Corroborative evidences; Tax effect
• Section: 80IA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Megh mani Fin echem Ltd. Ch No. 1 Ch No. 2 GIDC In dustrial Estate, Dah ej Vagra Bharuch-39213 0, Gujarat PAN: AAFCM2 288N (Appellant) Vs The Nation al E As ses sment Centre (ACIT Circle-1 , Bharuch)/DCIT, Circle 2(1)(1), Vad odara (Resp ondent) Asses see b y : Shri S. N. Sopa rkar, Sr. A. R. & Shri Parin Shah, A. R. Revenue by : Shri S udhendu Das, CIT-D. R. Date of hearing : 24-04 -2 023 Date of pronouncement : 16-05 -2 023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- These are two appeals filed by the assessee against the order of the ld. DRP passed for the assessment years 2016-17 & 2017-18. ITA No. 168/Ahd/2021 & 245/Ahd/2022 Assessment Years 2016-17 & 2017-18 I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 2 2. Since, common issues are involved for both the years under consideration, both appeals are being taken up together. ITA No. 168/Ahd/2021 A.Y. 2016-17 3. The assessee has taken the following grounds of appeal:- “1. The order passed by Assessing Officer pursuant to direction of Hon'ble DRP is bad in law and required to be quashed. Tax Effect: N.A. 2. a) Ld. TPO/DRP erred in law and on facts in making adjustment of Rs. 24,42,67,731/- of specific domestic transaction of sale of power by eligible unit to the manufacturing unit. Tax effect: Rs. 8,45,36,176/- b) Ld. TPO/DRP erred in law and on facts in disregarding benchmarking method adopted in transfer pricing documents of the appellant company ignoring factual aspects and submissions. Ld. TPO /DRP ought to have accepted the rate charged by the appellant at Rs. 6.5Rs/Unit as at arm's length. Tax Effect: N.A. being alternative contention to Ground 2(a). 3. a) Ld. TPO/DRP erred in law and on facts in making adjustment of Rs. 15,29,80,317/- of specific domestic transaction of sale of steam by eligible unit to the manufacturing unit. Tax Effect: Rs. 5,29,43,428/- b) Ld. TPO/DRP erred in determining arm's length value for sale of steam at Nil. TPO/DRP ought to have accepted the rate charged by the appellant at Rs. 1.21Rs/Unit as at arm's length. Tax Effect: N.A. being alternative contention to Ground 3(a). Your appellant craves leave to add, amend, alter, edit, delete, modify, or change all or any of the grounds of appeal before the appeal is heard and decided.” I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 3 4. Ground No. 1 is general and it does not require any adjudication. Ground No. 2 (TPO/DRP erred in making adjustment of Rs. 24,42,67,731/- of specified domestic transaction of sale of power by eligible unit to the manufacturing unit) 5. The brief facts in relation to this ground of appeal are that the assessee is engaged in manufacturing chemicals in India. The assessee has two coal based captive power plants and the assessee has claimed deduction u/s. 80IA with respect to one of these plants. During the course of assessment, the TPO in his order dated 31-10-2019 had pointed that the assessee was only engaged in generation of electricity and hence the comparable rate for the CUP has to be the cost of electricity generated by a power generating unit. The TPO observed that the assessee had benchmarked the SDT on sale of power by comparing the same with the rate charged by DGVCL (Dakshin Gujarat Vij Company Ltd.), however DGVCL was a power distribution company which purchased the power from power generation companies and distributed it to the end users. The rate of electricity charged by DGVCL from the end user includes, cost of generation, transmission and distribution. The electricity to be charged by DGVCL is fixed and approved by the Gujarat Electricity Regulatory Commission which takes into account various costs such as distribution loss, transmission loss charges, interest, depreciation, return on equity etc. Accordingly, the TPO held that it is not fair to compare the rate at which eligible unit had sold power to non-eligible unit with the rates charged by DGVCL from its customers. Accordingly, after citing the example of earlier assessment year i.e. assessment year 2014-15, the TPO benchmarked the I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 4 transaction by taking cost of Rs. 3.06 per KWH of generation of electricity as approved by GERC in the case of Gujarat State Electricity Corporation Ltd. 6. The assessee preferred objection before DRP against the draft assessment order. Before DRP, the assessee submitted that the price needs to be ascertained from the consumers perspective and it is the price which the consumer had to pay or the opportunity cost of the power from the alternate source, which in this case is the price at which power was available from State Electricity Board, which has to be considered for the purpose of benchmarking. The assessee relied upon various judicial precedents in support of its contention that the term “market value” would refer to the price that the goods or services supplied would ordinarily fetch in the open market subject to any statutory or regulatory restrictions. The assessee further submitted that the ld. TPO has taken average value to full cost incurred by the assessee company and has not included other expenses like financial cost, eligible depreciation and administrative expenses etc. while calculating the cost of generation. Therefore, the value taken by the TPO is not supported even by the actual expenses incurred by the assessee company. 7. The Hon’ble DRP observed that the assessee had taken the rate charged by DGVCL as a comparable rate to benchmark the rate of transfer of power from one unit to another unit. The rate charged by DGVCL was Rs. 7.07 per unit whereas the inter unit rate for transfer of power was at Rs. 6.50 per unit by the assessee. Therefore, the assessee claimed that the I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 5 transactions are at ALP. However, the DRP rejected the contentions of the assessee on the ground that firstly the rate of electricity to be charged by DGVCL is fixed and approved by Gujarat Electricity Regulatory Commission (GERC), which takes into account distribution loss, transmission loss, fixed charges, interest, depreciation, return on equity etc. The TPO has clearly stated in the FAR analysis that the above facts are the key factors in deciding the rate of electricity charged by DGVCL from its customers in open market. Thus, the rate at which eligible unit has sold power to the non-eligible units are not comparable to the rate which is charged by DGVCL from its customers. Secondly, the DRP observed that the assessee had booked profit for the eligible business at approximately 50% of the cost incurred which is more than ordinary profit compared to any ordinary unit engaged in the power generation only and not having captive consumption. Therefore, it is clear that such higher than ordinary profit has been booked due to the wrong application of comparable price which has been correctly rejected by the TPO. However, the DRP also observed that the actual cost per unit incurred by the assessee in the eligible unit is higher than rate of Rs. 3.06 per unit as computed by TPO and therefore, such price in case of the assessee for the year under consideration has resulted in the loss to the eligible unit. Accordingly, the DRP directed the Assessing Officer to work out 15.50% return on equity/capital invested by the assessee in the eligible unit and determine the per unit price of electricity by adding such amount of total cost and determine the adjustment based on the above determined price per unit in the power unit. I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 6 8. The assessee is in appeal before us against the aforesaid order passed by Hon’ble DRP. Before us, the counsel for the assessee placed reliance on the case of PCIT vs. Gujarat Alkali 88 taxman.com 722 wherein it was held deduction u/s. 80IA is allowable to the assessee for generation of power for captive consumption and steam was to be computed considering rate of power on which the electricity buyer supplied power to its consumer. He further placed reliance on the case of Gujarat Fluro Chemicals 97 taxman.com 10 (Ahmedabad Trib), in which the ITAT held that in case of captive power plant eligible for deduction u/s. 80IA, the market rate at which the receiving unit is procuring the electricity can be adopted as the sale price by CPP. Further, the counsel for the assessee placed reliance on the case of DCIT vs. Vishal Fabrics 139 taxman.com 30 (Ahmedabad Trib), in which the ITAT Ahmedabad held that in the case of captive power plant (CPP) eligible for deduction u/s. 80-IA, market rate at which receiving unit was procuring electricity could be adopted as sale price/ALP by CPP. Further, the counsel for the assessee submitted that in the aforesaid decision, the Ahmedabad ITAT on similar facts had approved the CPP rate of 7.49 charged for supply of power to processing house. Accordingly, the counsel for the assessee submitted that the (Ahmedabad Trib) in the case of Vishal Fabrics (supra) has approved the rate of Rs. 7.49 per unit for supply of power, whereas in the instant facts, the assessee is charging a lower rate of Rs. 6.5 per unit. Accordingly, the counsel for the assessee submitted that in the instant case, the assessee has transferred power to its associated enterprises at a price which was lower than the market price. Accordingly, the DRP has clearly erred in holding that cost plus 15% is the correct arms length price and is representative of the market value. I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 7 9. In response, the ld. Departmental Representative placed reliance on the observations made by the DRP in its order. 10. We have heard the rival contentions and perused the material on record. We are of the considered view that in the instant facts, it is a well settled principle that where an assessee, being a captive power plant provided electricity to its associated enterprises and claimed deduction u/s. 80-IA, then for the purpose of deduction, market value of power, supplied by the assessee to its associated enterprises should be computed considering rate of power charged by State Electricity Board for supply of electricity to industrial consumers. Further, we observe that the Ahmedabad Tribunal in the case of Gujarat Fluro Chemical Ltd. vs. DCIT 97 taxman.com 10 (Ahmedabad Trib) held that for the purpose of allowing deduction, the rate should be adopted equivalent to the rate at which Madhya Gujarat Vij Company Ltd. and Dakshin Gujarat Vij Company Ltd. are supplying the electricity to the assessee’s manufacturing unit. We observe that vide letter dated 1 st October, 2019 to the Transfer Pricing Officer, the assessee had submitted that power was supplied by DGVCL to assessee’s associated enterprise (MOL) having its unit in adjacent compound to MFL, and had charged a monthly average rate of Rs. 7.07 per unit per MOL. Accordingly, the decision of Gujarat Fluro Chemicals clearly applies to the assessee set of facts. Further, we observe that the decision of Gujarat Fluro Chemicals was also followed by ITAT Ahmedabad in the case of DCIT vs. Vishal Fabrics Ltd. 139 taxm.com 30 (Ahmedabad Trib), wherein it was held that in case of captive power plant (CPP) eligible for deduction u/s. 80-IA, market rate at which receiving unit was procuring electricity could be adopted as sale I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 8 price/ALP of CPP. In the case of Shree Rayalaseema Hi Strength Hypo Ltd. 146 taxman.com 168 (Hyderabad Trib), the ITAT held that where assessee, a captive thermal power plant, provided electricity to its AEs and claimed deduction under section 80-IA in respect of profits arising out of such activity, for purpose of such deduction market value of power supplied by assessee to its AEs should be computed considering rate of power charged by State Electricity Board for supply of electricity to industrial consumers and thus, assessee was justified in adopting ALP of electricity supply to its AEs at rate charged by State Electricity Board and Revenue was not justified in excluding certain heads of charges out of it 10.1 Accordingly, respectfully following the aforesaid decision rendered by the Jurisdictional Gujarat High Court and ITAT Ahmedabad, we are of the considered view that the assessee has rightly computed the ALP by adopting the rate of Rs. 6.5 per unit as the arms length rate. Accordingly looking into the facts of the instant case, ground no. 2 of assessee’s appeal is allowed. Ground No. 3 (Ld. TPO/DRP erred in determining the arms’ length value for sale of steam at Rs. “nil”) 11. The brief facts in relation to this ground of appeal are that steam generated by captive power plant of the assessee is transmitted to the plant which manufactures chemicals as well as further processed to generate power. The assessee has adopted “other method” in transfer pricing documentation for benchmarking SDT on transfer of steam, wherein quotation was obtained by MOL from independent supplier and such I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 9 quotation has been considered by the assessee as the benchmark rate. The TPO rejected the quotation by observing that the quotation has been obtained by MOL on 10-04-2015 and terms and conditions stated that the quotation was valid only up to seven days. Accordingly, the ld. TPO has concluded that the quotation was invalid from 17-04-2015. 12. The assessee filed appeal with respect to this ground of appeal before the DRP. The DRP observed that assessee had benchmarked the transaction by comparing the rate with the quotation obtained from third party Shree Sulphurics Pvt. Ltd. However, the DRP dismissed the assessee’s appeal with the following observations:- “6.3 Discussion and Directions 6.3.1 Vide this ground the applicant has agitated adjustment made with respect to sale of steam. The assessee company had two coal based captive power plants which generate steam and power. The steam generated is then transmitted to the plant which manufactures chemicals as well as further processed to generate power. Geneation of steam depends upon the availability of raw material ( mainly coal and water) 6.3.2 Assessee has adopted "Other Method" in TP documentation for benchmarking SDT of transfer of steam, wherein quotation obtained by MOL from independent supplier in Ankleshwar, Shree Sulphurics Pvt Ltd ('SSPL') has been considered as benchmark rate. SSPL has quoted a rate of Rs. 1700 per MT for supply of 120,000 MT steam to MOL. 6.3.3 We have perused the order of the transfer pricing officer and submission filed by assessee. The facts of the case are that assessee is having an eligible unit claiming deduction u/s 80IA of the Act. The eligible unit is generating steam and power. The steam is supplied to I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 10 the other unit of the assessee and to the AE and the power is supplied to the other unit of the assessee. 6.3.4 During the year under consideration, assessee had booked revenue of Rs. 15,29,80,645/- from the steam unit. Assessee had claimed to have produced 1,26,340 MT unit of steam and booked price of RS. 1210.85/- per MT unit of steam. It is also seen that assessee had benchmarked the transaction by comparing the rate with the quotation obtained from the third party Shree Sulphurics Pvt. Ltd. However, following defects are noticed in the benchmarking of the transaction of steam; I. The steam unit is not a separate unit. The steam is not sold as separate commodity. II. The steam is not a saleable commodity. It cannot be sold to a unit which is at a distance from the steam generated unit. Therefore, it cannot be sold in open market. III. The assessee had not submitted any details of the measurement of steam produced by it. Therefore, the measurement of steam in MT unit is not reliable. The details regarding units of steam generated and units of steam transferred to the manufacturing units are not backed by any authenticated independent third/party certificates IV. The assessee had submitted quotation for the rate of steam. However, the same is not verifiable with the actual quantity and market rate of the steam. V. The steam is not sold in the open market. Therefore, the rate of the steam is not verifiable with the open market rate. VI. The sale price of steam is not verifiable with the actual quantity and market rate. Hence the pricing method adopted by assessee is not verifiable with the market rates. VII. It is also seen that assessee had not submitted any separate account for the steam unit. Therefore, even the submission of the I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 11 assessee also supports the finding that cost or price of the steam cannot be determined separately. VIII. The benchmarking analysis claimed to have been adopted by the MOL and relied upon by the assessee is on the basis of a quotation. However, on perusal of the copy of such quotation, it is found that the said quotation is not backed by any analysis of the valuation of the price so quoted and also without any supporting evidences and hence is liable to be rejected. IX. Assessee had booked profit for the eligible business at approximately 50% of the cost incurred which is more than ordinary profit compared to any ordinary unit engaged in the power generation only not having captive consumption as discussed in the transfer pricing order. X. Steam is a by product and no separate cost is incurred for production of steam. Therefore, considering the facts discussed hereinabove, the steam is used only for the captive consumption and as no separate cost is incurred for production of steam and hence the value of the steam is taken at NIL. Therefore, AO is directed to take the value of the steam at NIL. Therefore, ground raised is rejected.” 13. The assessee is in appeal before us against the aforesaid order passed by the DRP by holding that the arms length price for generation of steam should be taken to be “nil”. Before us, the counsel for the assessee drew our attention to page 394 of the paper book in which the assessee submitted that the assessee has transferred steam @ Rs. 1210.85 per metric ton as against SSPL, which has quoted a rate of Rs. 1700 per metric ton for supply of steam to MOL. Therefore, since the transaction undertaken by the assessee is at a lower rate than the price quoted by SSPL (independent third party), it may be concluded that sale of steam is at arm’s length price. Further, the counsel for the assessee drew our attention to pages 397 of the paper book I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 12 which is the meter photograph and at page no. 398 of the paper book in which the assessee has furnished a month-wise break up of units of steam generated during financial year 2015-16. Further, the counsel for the assessee placed reliance on the case of DCIT vs. Visham Fabrics 139 taxman.com 30 (Ahmedabad Trib), wherein the ITAT has confirmed that assessee has submitted engineering certificate and in which the cost of generation of steam can be considered in the range of Rs.1.16 to Rs. 1.25 per kg of steam. Accordingly, the counsel for the assessee submitted that the issue may be accordingly decided in favour of the assessee in the light of the above facts. 14. In response, the ld. Departmental Representative placed reliance on the observations made in the DRP. 15. We have heard the rival contentions and perused the material on record. While, we are of the considered view that the ALP of steam cannot be determined at “nil”, however, at the same time, we are also unable to agree with the relevance placed by the assessee on the quotation obtained from the third party. We observe that the DRP has pointed out various infirmities in the quotation obtained by the assessee from SSPL and we are of the view that the same cannot be a benchmark for ascertaining the arms length price of steam supplied to associated enterprise in the instant facts. Further, we are also of the view that the case of the Vishal Fabrics the ITAT upheld the ALP on the basis of valuation exercise done on the basis of engineering certificate produced by the assessee before the Tribunal for its consideration. However, in the instant facts, no such exercise has been done I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 13 by the assessee to ascertain the value of steam supplied to its AE. In the case of DCM Shriram Ltd. 140 taxman.com 217 (Delhi Trib), the ITAT held that the steam has a cost and arms length price of steam cannot be determined at “nil”. Further, the ITAT held that the value of steam can be expressed in terms of equivalent units of electricity that would have been generated and such value is usually higher than cost of steam. In the case of Nectar Life Sciences Ltd. 138 taxman.com 557 (Delhi Trib), the Delhi ITAT held that steam is a form of power and there is clearly a cost for steam generation. Therefore, TPO was not justified in determining ALP of assessee’s specified domestic transactions pertaining transfer of steam from eligible to non-eligible units at “nil”. In this case, the ITAT held that since steam is a form of power and there was clearly a cost for steam generation as per report approved by a chartered engineering and steam unit taken for the purpose of captive power plant in profit ratio had been shown at 22.58%, TPO was not justified in determining ALP pertaining to transfer from eligible to non-eligible units at Rs. “nil”. In the case of DCM Shriram Ltd. 140 taxman.com 217 “Delhi Tribunal”, the ITAT Delhi held that value of steam can be expressed in terms of equivalent units of electricity that would have been generated and such value is usually higher than cost of steam. Accordingly, we observe that in the instant facts, no exercise has been done by the assessee to justify the ALP of steam charged by the assessee from its associated enterprises. While we are in agreement with the counsel for the assessee that the ALP of steam cannot be determined at Rs. “nil”, however, at the same time, we are also in agreement with the observations made by the Hon’ble DRP that the quotation obtained by the assessee from SSPL also cannot be taken as the basis for benchmarking the ALP of steam supplied by I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 14 the CPP of the assessee. The DRP, has correctly pointed out certain infirmities in the quotation obtained by the assessee and has specifically observed that the quotation obtained by the assessee is not backed by any analysis of the evaluation of the price so quoted and the said quotation is not supported by any supporting evidences. Accordingly, since appropriate exercise has not been conducted by the assessee to justify the arms length price of steam supplied to its associated enterprise, this issue is restored to the file of Assessing Officer wherein the assessee may furnish supporting documents in order to justify arms length price of the steam supplied by its captive power plant to its Associated Enterprise. Accordingly, this issue is being restored to the file of Assessing Officer with the above directions. 16. In the result, the ground no. 3 of the assessee’s appeal is allowed for statistical purposes. 17. In the combined result, assessee’s appeal is allowed for statistical purposes for assessment year 2016-17. ASSESSMENT YEAR 2017-18 18. The assessee has raised the following grounds of appeal:- “1. The order passed by Assessing Officer pursuant to direction of Hon'ble DRP is bad in law and required to be quashed. Tax Effect: N.A. 2.a Ld. TPO / DRP erred in law and on facts in making adjustment of Rs. 13.43,87,046/- of specific domestic transaction of sale of power of power manufacturing unit. I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 15 Tax Effect Rs. 4,65,08, 658/- b) Ld. TFI DRP erred in law and on facts in disregarding benchmarking method adopted in transfer pricing documents of the appellant company ignoring factual aspects and submissions. Ld. TPO/DRP ought to nave accepted the rate charged by the appellant at Rs. 6.5 Rs./Unit as at arm's length. Tax Effect: NA being alternative contention to Ground 2(a). 3. a) Ld TPO/DRP erred in law and on facts in making adjustment of Rs. 8,47,51 530/- of specific domestic transaction of sale of steam by eligible unit to the manufacturing unit. Tax Effect: Rs. 2,93,31,249/- b) Ld. TPO/DRP erred in determining arm's length value for sale of steam at Nil TPO / DRP ought to have accepted the rate charged by the appellant at Rs. 1.10/Unit as at arm's length. Tax Effect: N.A being alternative contention to Ground 3(a). Your appellant craves leave to add, amend, alter, edit, delete, modify, or change all or any of the grounds of appeal before the appeal is heard and decided.” 19. Ground No. 1 is general and does not require any adjudication. 20. We observe that the issues for consideration and the grounds of appeal are similar for both the assessment years 2016-17 and 2017-18. Accordingly, our observations for assessment year 2016-17 would equally apply to assessment year 2017-18 21. Accordingly ground no. 2 of assessee’s appeal for assessment year 2017-18 is allowed and ground no. 3 of assessee’s appeal is restored to the file of Assessing Officer for de-novo considerations as per directions given with respect to similar ground of appeal for assessment year 2016-17. I.T.A Nos. 168/Ahd/2021 & 245/Ahd/2022 A.Y. 2016-17 & 2017-18 Page No. Meghmani Finechem Ltd. vs. ACIT/DCIT 16 22. In the result, ground no. 2 assessee’s appeal is allowed and ground no. 3 of assessee’s appeal for assessment year 2017-18 is allowed for statistical purposes. 23. In the combined result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 16-05-2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 16/05/2023 आदेश क त ल प अ े षत / 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 अपील य अ धकरण, अहमदाबाद