JCIT Vs Premier Mills Pvt. Ltd. (ITAT Chennai)
Market Value for 80-IA Captive Power Must Be SEB’s Consumer Tariff—Jindal Steel Applies Even After Amendment; ALP Cannot Replace Market Price
The Revenue filed appeals for AYs 2017-18 & 2018-19 against the CIT(A)’s orders allowing Premier Mills’ claim of deduction u/s 80-IA for its captive wind energy unit, following the Supreme Court ruling in Jindal Steel & Power Ltd. The dispute concerned the transfer price of electricity supplied by the Assessee’s windmill to its textile division. The Assessee adopted TANGEDCO’s consumer tariff, whereas the AO/TPO applied the price at which TANGEDCO purchases power, resulting in a downward adjustment of ₹18.17 crore to 80-IA profits.
The CIT(A) followed the Supreme Court in Jindal Steel, this Tribunal’s decisions in Eveready Spinning Mills, India Cements, and the Mumbai/Delhi/Calcutta High Courts’ line of judgments holding that market value under Section 80-IA(8) means the price charged to industrial consumers, not the procurement price paid to the board.
Before the Tribunal, the Revenue argued that the amendment to Explanation to s.80-IA(8) and the Hyderabad ITAT ruling in Sanghi Industries Ltd required determination of market value strictly through ALP under domestic TP rules. The Assessee submitted detailed written submissions and cited numerous judicial precedents affirming that captive consumption cases must adopt SEB consumer tariff, not ALP, and that Sanghi Industries was distinguishable.
The Tribunal reviewed the detailed analysis in earlier decisions, including Prabhu Spinning Mills (ITAT Chennai 2025), which held that:
