Tata Chemicals Ltd. Vs DCIT (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal allowed the appeal of Tata Chemicals Ltd. for Assessment Year 2019-20 and deleted the transfer pricing adjustment of Rs. 12,99,46,410/- relating to the inter-unit transfer of electricity from its Section 80-IA eligible Power Plant TT-12 to its non-eligible manufacturing unit at Mithapur. The Tribunal also admitted an additional ground concerning valuation of steam transferred from the eligible undertaking and remitted that issue to the Assessing Officer for de novo consideration.
The assessee, engaged in manufacturing and sale of inorganic chemicals, fertilizers and bio-fuels, reported specified domestic transactions of Rs. 115,22,57,650/- relating to sale of electricity from Power Plant TT-12, which was eligible for deduction under section 80-IA, to its non-eligible manufacturing unit at Mithapur. In its Transfer Pricing Report, the assessee benchmarked the transaction under the Comparable Uncontrolled Price (CUP) Method by comparing the rate at which Gujarat Electricity Board (GEB) supplied electricity to the Mithapur unit. The assessee adopted the rate of Rs. 6.58/Kwh in its grounds and stated in the factual discussion that GEB charged an average rate of Rs. 6.90 per unit, which was also the rate at which the eligible unit transferred electricity to the manufacturing unit.
