Held that the Market price of inter-unit sale of electricity has to be computed on the basis of the rate charged from a consumer in the open market and not at the weighted average purchase price at which thermal power plants sold electricity to BEST. The enhancement made by DRP by applying the weighted average purchase price paid by BEST to the thermal power plants is not sustainable. (AY.2020-21)
Laxmi Organic Industries Ltd. v. DCIT (2025) 237 TTJ 268 / 177 taxmann.com 118 (Mum) (Trib)
S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Inter-unit sale of electricity-the enhancement made by the DRP by resorting to weighted average of purchase price of electricity by BEST @ Rs. 5.11 per unit is not tenable-Accordingly, addition made by the AO/TPO in respect of sale of electricity by the eligible units to non-eligible units is not sustainable.
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