PCIT Central- 1 Vs Rungta Mines Limited (Calcutta High Court)
Calcutta High Court held that internal Comparable Uncontrolled Price [CUP] is most appropriate method in determining Arm’s Length Price [ALP] for sale of power by Captive Power Plant to non-eligible units of the assessee. Accordingly, appeal of revenue dismissed.
Facts- The respondent assessee is engaged in iron ore and manganese ore mining having mines in Orissa and Jharkhand and they also produce sponge iron, billets and power. In these appeals the issue which falls for consideration is the correctness of the addition on the Transfer Pricing Adjustment (TPA) made by the assessing officer.
The assessment for the year 2017-2018 was completed u/s. 143(3) of the Act by order dated 09.02.2021. The assessee contested the addition of Transfer Pricing Adjustment (TPA) by contending that AO/TPO erred in rejecting the economic analysis document as part of the Transfer Pricing Study Report undertaken by the assessee to determine the Arm’s Length Price (ALP) for sale of power by Captive Power Plant (CPP) to non-eligible units in accordance with the provision of the Act read with the Income Tax Rules.
CIT(A) allowed the appeal. Tribunal dismissed the appeal of revenue. Thus, being aggrieved, revenue has preferred the present appeal.
