The Delhi High Court held that where the assessee transferred electricity from its eligible captive power units (claiming deduction u/s 80-IA) to non-eligible units, the Tribunal was justified in applying the CUP method by adopting the rates charged by the State Electricity Boards/power distribution companies as an appropriate external comparable. The Court observed that the electricity market is regulated and transactions on the Indian Energy Exchange (IEX) are materially different, being subject to bidding, unpredictability, wide rate fluctuations and payment for power purchased rather than power actually consumed. Such differences significantly affect pricing, making IEX rates unsuitable as a comparable uncontrolled transaction. Since SEB tariffs provide a stable and regulated benchmark with sufficient similarity, the Tribunal correctly held them to be the proper external CUP for determining the market value/ALP of electricity supplied by the eligible unit to non-eligible units. Accordingly, the transfer pricing adjustment was rightly deleted. (AY 2014-15)