AO Cannot Override TPO: ITAT Mumbai Allows Full 80IA Deduction for Captive Power Sales

DCIT Vs Aarti Industries Limited (ITAT Mumbai) Assessee, engaged in manufacturing of chemicals, fertilizers & intermediates, operated a Captive Power Plant (CPP) for supplying electricity & steam to its own manufacturing unit. For AY 2015-16, it claimed deduction of ₹67.91 Cr u/s 80IA, comprising ₹22.91 Cr from sale of electricity & ₹45 Cr from sale of steam. AO restricted deduction on electricity transactions, adopting ₹4.35/unit (rate at which GUVNL purchased power from generators) instead of ₹7.52/unit charged by CPP to manufacturing unit. This reduced eligible deducti...