In Brief
NTPC acquired the Tanda Thermal Power Station from UPSEB for Rs. 607 crores under a statutory transfer scheme. When calculating depreciation for tariff purposes, the Central Electricity Regulatory Commission reduced the depreciable base to Rs. 431.09 crores. NTPC challenged this, contending depreciation should be computed on the actual purchase price. The Court held that accounting principles require depreciation to be calculated on the purchase consideration paid, not on a value determined by the regulator. The Court followed established precedent that purchase value is the proper depreciation basis and set aside the Commission's order, allowing the appeal.
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