[6:18 pm, 30/08/2023] Aryaman: Does electricity have an open market value
[6:18 pm, 30/08/2023] Aryaman: How to determine market value of electricity
80 IA 8- Income Tax Act
IA Act, 1961- S.80 IA (8)- Where any goods or services held for the purposes of the eligible
business are transferred to any other business carried on by the assessee, or where any goods
or services held for the purposes of any other business carried on by the assessee are
transferred to the eligible business and, in either case, the consideration, if any, for such
transfer as recorded in the accounts of the eligible business does not correspond to the market
value of such goods or services as on the date of the transfer, then, for the purposes of the
deduction under this section, the profits and gains of such eligible business shall be computed
as if the transfer, in either case, had been made at the market value of such goods or services
as on that date :
Provided that where, in the opinion of the Assessing Officer, the computation of the profits
and gains of the eligible business in the manner hereinbefore specified presents exceptional
difficulties, the Assessing Officer may compute such profits and gains on such reasonable
basis as he may deem fit.
Explanation.-For the purposes of this sub-section, "market value", in relation to any goods or
services, means-
(i) the price that such goods or services would ordinarily fetch in the open market; or
(ii) the arm's length price as defined in clause (ii) of section 92F, where the transfer of such
goods or services is a specified domestic transaction referred to in section 92BA.
IA Act, 1961- S.2(22B)- “fair market value”, in relation to a capital asset, means-
(i) the price that the capital asset would ordinarily fetch on sale in the open market on the
relevant date; and
(ii) where the price referred to in sub-clause (i) is not ascertainable, such price as may be
determined in accordance with the rules made under this Act;
Black’s Law Dictionary- Open Market- Definition & Legal Meaning: A market in which
prices are controlled by supply and demand, rather than government policy or independent
cartels.
Open Market
Where it is open to every person desirous of purchasing the item to place orders with the
supplier company and obtain the supply on payment of the price at the prevailing
rate and the sales by the supplier company are not to a limited class only then such
purchases are to be treated as purchases made “from the open market”, Ahura
Chemical Products (P) Ltd. v. Union of India, (1981) 4 SCC 277.
Government Policy~Government Regulations-
Policy
1. A brief document that states the high-level organisation position, states the scope and
establishes who is responsible for compliance with the policy and the corresponding
standards. Following is an abbreviated example of what a policy may contain —
Introduction, Definitions, Policy Statement identifying the need for “something” (e.g
data security), Scope, People playing a role and their responsibilities, Statement of
Enforcement, including responsibility, [Schedule 5, Information Technology
(Certifying Authorities) Rules, 2000 (India)]. 2. The general principles by which a
government is guided in its management of public affairs or the legislature in its
measures. [Whart.]
Regulation
1. Means regulations made under the Mental Healthcare Act, [Section 2(1)(z), Mental
Healthcare Act, 2017 (India)]. 2. It means the regulations made by the Board under
the Central Goods and Services Tax Act, 2017 on the recommendations of the
Council, [Section 2(95), Central Goods and Services Tax Act,
2017 (India)]. 3. Constitution of India - Sch. V Para 5(2)(b) — Includes total
prohibition, Samatha v. State of A.P., (1997) 8 SCC 191. 4. The word “regulation” in
some quarters is considered to be unruly horse. The word “control” is an unfortunate
word of such wide and ambiguous import that it has been taken to mean something
weaker than “restraint”, something equivalent to “regulation”, U.P. Power Corpn.
Ltd. v. NTPC Ltd., (2009) 6 SCC 235 : (2009) 2 SCC (L&S) 177. 5. “Regulation” means
regulation in public interest and not contra public interest. The expression
“regulation” cannot possibly be read as contra public interest but in the interest of
the public, Haryana SEB v. Suresh, (1999) 3 SCC 601 : 1999 SCC (L&S)
765. 6. ‘Regulation’ has that rigidity of meaning as never to take in ‘prohibition’.
Much depends on the context in which the expression is used in the statute and the
object sought to be achieved by the contemplated regulation. It was observed by
Mathew in, G.K. Krishnan v. State of T.N., (1975) 1 SCC 375: ‘The word “regulation”
has no fixed connotation. Its meaning differs according to the nature of the thing to
which it is applied’. In modern statutes concerned as they are with economic and
social activities, ‘regulation’ must, of necessity, receive so wide an interpretation that
in certain situations, it must exclude competition to the public sector from the private
sector, Pal Singh v. State of U.P., (1996) 11 SCC 571. 7. A regulation is not an
agreement of contract but a law binding the Corporation its officers, servants and the
members of the public who come within the sphere of its operations. The regulations
made under power conferred by the statute are subordinate legislation and have the
force and effect, if validly made, as the Act passed by the competent Legislature.
Terms of the regulations are not terms of contract, Sukhdev Singh v. Bhagat
Ram, (1975) 1 SCC 421: 1975 SCC (L&S) 101.
Regulate — 1. The word “regulate”, according to Shorter Oxford Dictionary,
means, “to control, govern or direct by rule or regulations, to subject to guidance or
restrictions”, Himat Lal K. Shah v. Commr. of Police, (1973) 1 SCC 227 : 1973 SCC
(Cri) 280. 2. Word “regulate” means “to adjust by rule, method or established mode;
to direct by rule or restriction; to subject to governing principles or laws”, Bennett
Coleman & Co. v. Union of India, (1972) 2 SCC 788, 799-800.
Regulation and prohibition — “Regulation” promotes the freedom or the facility
which is required to be regulated in the interest of all concerned, whereas
“prohibition” obstructs or shuts off or denies it to those to whom it is applied. Word
“regulate” does not include prohibition, State of U.P. v. Hindustan Aluminium
Corpn., (1979) 3 SCC 229.
S.2 (47)- “open access” means the non-discriminatory provision for the use of transmission
lines or distribution system or associated facilities with such lines or system by any licensee
or consumer or a person engaged in generation in accordance with the regulations specified
by the Appropriate Commission;
