In Brief
Four electricity companies (Jindal Steel & Power, Reliance Industries, and Godawari Power) challenged income tax assessments. The Supreme Court held that for deductions under Section 80IA, the market value of electricity supplied by captive power plants to the assessee's industrial units must be based on the rate charged by the State Electricity Board to consumers (Rs. 3.72 per unit), not the contracted rate paid for surplus power sold to the Board (Rs. 2.32 per unit). The Court ruled that contracted power tariffs in a monopoly environment do not reflect true market value. The Court also confirmed that claiming depreciation before filing returns requires no formal written option, and that professional expenses cannot be disallowed based on retracted witness statements without cross-examination opportunity. The Court dismissed all revenue appeals.
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