TMI Blog2015 (10) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... st income cannot be said to have accrued to the assessee for the year, as rightly held by the learned CIT(A). In that view of the matter, we uphold the impugned order of the learned CIT(A) deleting the addition made by the Assessing Officer on account of interest allegedly receivable by the assessee from the DISCOMs on delayed payments, and dismiss this appeal of the Revenue. - Decided in favour of assessee. - ITA No. 600/Hyd/14 - - - Dated:- 17-9-2014 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Appellant : Shri D. Sudhakar Rao DR For the Respondent : Shri M. Chandramouleswara Rao ORDER Per P. M. Jagtap, Accountant Member : This appeal is preferred by the Revenue against the order of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulatory Commission(APERC). (c) That the assessee actually made claim before the APERC (A.P. Electricity Regulatory Commission, is responsible for determining the prices of electricity between APGENCO APDISCOMs) for its claim of interest on delayed payments made by APDISCOM. (d) In the correspondence made by the assessee with APERC the assessee clearly claimed 15% interest on delayed payments made by DOSCOM. (e) In order no.105/2003 dated 24.03.2003 passed by APERC, the APERC held that, a provision may be incorporated in Power Projects Agreement for opening a revolving letter of credit in favour of APGEEMCOI to cover one month receivables. As per this direction APDISCOM has to open an L/C and has to pay interest if the payments we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is not charging any interest for such delays. However, in the annual accounts, it has stated that interest on delayed payments will be accounted for on receipt basis. Basing on such statement the Assessing Officer computed notional interest. (b) As per Accounting Standard-9 (AS-9) revenue should be recognized only when there is no significant uncertainty as to measurability and collectability of the income. When there is uncertainty about its measurability and collectability, revenue recognition should be postponed. (c) The income is said to have accrued to assessee only if- (i) There exists a legal right for the assessee to claim interest for the delayed payment in accordance with any agreement. (ii) If such interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to claim such interest against APDISCOM. However, in view of the foregoing discussion, the appellant APGENCO as a matter of abundant precaution as always making a claim of interest on DISCOM but at the same time it had no right to make such claim. The power purchase agreement between APGENCO and APDISCOM do not provide for charging such interest. More particularly, the APERC in its order dated 08.07.2013 had categorically stated that APGENCO s request for levying such interest on belated payments was flatly rejected. Even otherwise also thousands of crores of amounts are due from APDISCOMs to APGENCO. Even making the payment for the principal amounts raised by APGENCO has become difficult task. Since APERC has not agreed to charging inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by its order dated 4.7.2013, has rejected this claim of the assessee, expressing its views as under- Commission s Views: The Delayed Payment Surcharge(DPS) collected from the consumers for non-payment of billed demand as on due date is entirely different which cannot be compared with amount to be paid to APGENCO due to delay by DISCOMs. The intention of levying DPS is to enforce discipline among consumers and to prevent from disconnection of supply. Regarding claims of penal charges by APGenco on account of delayed payment by DICOMs, the Commission is of the view to not to consider such charges while determining the tariff, since the Commission has allowed payment of provisional amount to APGenco stations in Retail Supply Tariff Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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