High Court of Delhi · Judgments and reasoned final orders
The Pr. Commissioner of Income Tax - Central-1 v. Shahi Exports Pvt. Ltd.
ITA 369/2026 & CM APPL. 30855/2026, CM APPL. 30856/2026 ·
Section 80-IA(8) read with section 92F specified domestic transaction: market value / ALP of captive power supplied to manufacturing units must be benchmarked against State Electricity Board (SEB) industrial consumer tariff, not volatile 15-minute spot rates on IEX.
1. FACTS OF THE CASE
For AY 2021-22, the Assessing Officer / TPO made a transfer pricing adjustment of Rs. 33,59,64,275 in respect of transfer of power from the captive power generating units of the assessee, Shahi Exports Pvt. Ltd., to its other manufacturing units under section 80-IA(8) read with section 92F. Following the Delhi High Court judgment dated 21.01.2025 in Principal Commissioner of Income-tax v. DCM Shriram Ltd., (2025) 478 ITR 385, the ITAT New Delhi 'H' Bench (order dated 27.06.2025) deleted the Rs. 33,59,64,275 adjustment. The Revenue appealed under section 260A.
2. DISCUSSION BY THE COURT
Senior Standing Counsel for the Revenue conceded that the facts of the case could not be distinguished from the binding coordinate-bench decision in PCIT v. DCM Shriram Ltd., (2025) 478 ITR 385 (Del), which in turn applied the Supreme Court decision in CIT v. Jindal Steel and Power Ltd. Extracting paragraphs 43-61 of DCM Shriram Ltd. in extenso, the Division Bench reiterated that: (1) Under the CUP method, transactions on the Indian Energy Exchange (IEX)—which involve advance 15-minute slot bidding for volatile, unpredictable surplus power paid on a 'power bid/supplied' basis rather than actual metered consumption—are materially dissimilar to uninterrupted industrial power supply; and (2) Under Explanation to section 80-IA(8) as interpreted by the Supreme Court in Jindal Steel and Power Ltd., the 'open market' value of electricity supplied by a captive power plant to the assessee's own industrial units is the retail tariff rate at which the State Electricity Board (SEB) / distribution company supplies electricity to industrial consumers in that region.
3. JUDICIAL DECISION
Following PCIT v. DCM Shriram Ltd., (2025) 478 ITR 385 (Del) and CIT v. Jindal Steel and Power Ltd. (SC), the High Court dismissed ITA 369/2026 along with pending applications.
4. OUTCOME
In favour of the assessee (Shahi Exports Pvt. Ltd.). The Revenue's appeal was dismissed and the deletion of the Rs. 33,59,64,275 captive-power transfer pricing adjustment for AY 2021-22 stood affirmed.
5. AKHB REVIEW POINT
AKHB analysis: in Form 3CEB and transfer pricing documentation for section 80-IA captive power units, benchmark inter-unit power transfers under CUP using the monthly electricity bills issued by the jurisdictional State DISCOM/SEB to the consuming industrial unit (landed energy charge per kWh), and explicitly document why IEX 15-minute spot-market bids fail Rule 10B(1)(a) comparability.
Source and verification
Eight-page official Delhi High Court order PDF in ITA 369/2026; paragraphs 1-5 span PDF pages 1-8.
Original PDF: 8 pages · SHA-256: 065ba2f12740c07d42b7b3c8ad523e2c82afe1be7886b7956c005ee269093041
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies section 80-IA(8) read with section 92F of the Income-tax Act, 1961 for AY 2021-22. Income-tax Act, 2025 equivalence is not verified.
Full judgment checked. Follows PCIT v. DCM Shriram Ltd., (2025) 478 ITR 385 (Del) and CIT v. Jindal Steel and Power Ltd. (SC). Comprehensive subsequent judicial treatment has not been verified.
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