IN THE INCOME TAX APPELLATE TRIBUNAL, ‘K’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER &

SMT RENU JAUHRI, ACCOUNTANT MEMBER (Assessment Year :2013-14 Aditya BirlaNuvo Ltd. Vs. Dy. CIT, Central Circle – 1(4) (Since Amalgamated with Earlier with Asst. CIT(LTU) 1 Grasim Industries Limited) Room No. 902, Old CGO A2 Aditya Birla Centre, S. K. Building, 9^th Floor, M. K. Road, Ahire Marg, Worli, Mumbai Mumbai-400 020 PAN/GIR No.AAACI1747H (Appellant) .. (Respondent ITA No.1885/Mum/2018 (Assessment Year :2013-14 Dy. CIT, Central Circle – 1(4) Vs. Aditya BirlaNuvo Ltd.

Earlier with Asst. CIT(LTU) 1 (Since Amalgamated with Room No. 902, Old CGO Grasim Industries Limited)

Building, 9th Floor, M. K. A2 Aditya Birla Centre, S. K.

Road, Ahire Marg, Worli, Mumbai Mumbai-400 020 PAN/GIR No.AAACI1747H (Appellant) .. (Respondent Assessee by Shri Yogesh Thar a/w. Shri Riken Shah & Ms. Sukanya Jayaram Revenue by Shri Himanshu Joshi, Sr. DR Date of Hearing 31/10/2025 Date of Pronouncement 17/11/2025 / O R D E R आदेश PER AMIT SHUKLA (J.M):

These cross appeals were earlier disposed of by two separate orders, one passed by the learned Accountant Member and the other by the learned Judicial Member. A difference arose only on Ground No. 7 relating to the determination of fair market value for captive transfer of electricity for the purpose of computing deduction under section 80 IA. In view of this divergence, the matter was placed before the Hon’ble President under section 255(4) of the Act. The points of difference were thereafter referred to the Hon’ble Third Member for resolution. The Hon’ble Third Member has now rendered his detailed opinion, and the appeals have been placed before us to pass the consequential confirmatory order that must follow the majority view.

2. At the outset, it deserves to be recorded without any ambiguity that except for Ground No. 7 there was no disagreement between the learned Members. The learned Judicial Member concurred entirely with the findings and conclusions of the learned Accountant Member on all other issues, including the reasoning spread across paragraphs 22 and 23 of the Accountant Member’s order and the corresponding conclusions in the Judicial Member’s order. Therefore, all such issues stand affirmed as they were originally decided, and no interference or modification is required on those grounds.

3. The only issue that required reference to the Hon’ble Third Member arises from Ground No. 7. The learned Accountant Member took the view that the question of determining the fair market value of electricity supplied by the captive power plant to the Rayon unit should be restored to the Assessing Officer or Transfer Pricing Officer for a fresh determination after making reasonable adjustments on the basis of industrial tariff rates applicable under the State Electricity Board. The learned Judicial Member disagreed, holding that the assessee had adopted a proper internal comparable uncontrolled price by benchmarking the transaction at the same rate at which it purchased electricity from the State Electricity Board, that is, Rs 6.62 per unit. In the view of the learned Judicial Member, this internal CUP represented the most reliable and appropriate benchmark for the purpose of section 80 IA and required no downward adjustment. Thus, the core question that travelled to the Hon’ble Third Member was whether the rate at which the assessee purchased power from the State Electricity Board constitutes a valid and acceptable CUP for determining the fair market value under section 80 IA(8).

4. The Hon’ble Third Member examined the issue in substantial detail. He evaluated the statutory framework of section 80 IA(8) which requires that when goods or services of an eligible business are transferred to any other business carried on by the assessee, the consideration recorded in the accounts must correspond to the market value of such goods or services. He analysed the nature of the assessee’s electricity purchases from the