Recently, the Hon’ble Calcutta High Court in Graphite India Ltd. v. Commissioner of Income-tax ruled in favour of the taxpayer and put to rest the controversy regarding valuation of captively consumed electricity for tax deduction purposes. The Hon’ble Court clarified that while electricity duty may not be separately payable on power consumed internally, the same would nevertheless form part of the market value of power when computing the eligible deduction on captive power undertakings.
