TMI Blog2016 (5) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... cal services as noted by AO.- Decided against revenue Power factor rebate and power interruption charges - Held that:- As per terms and conditions of Tariff order of 2005-06, Power Factor Surcharge was payable by the High Voltage/Extra High Voltage Industrial consumers, whose monthly average power factor falls below 85%. On the other hand, if the monthly power factor was above 92%, he would get a power factor rebate. If the power factor is between 85% and 92%, there was neither any surcharge nor any rebate. So power factor rebate allowed to any consumer is a part of tariff, and given effect in the energy bill. Power factor rebate is computed as a percentage of energy charge specified in the tariff Order and the monthly power factor of the consumer. The AO was of the view that the payment for power factor rebate and power interruption charges was made by West Bengal State Electricity Board to Power Grid Corporation but this fact is incorrect. The power factor rebate is not paid to anybody. This rebate is granted to the high voltage industrial consumers for their energy consumption bills. Once this is the position, there is no payment made by assessee but this was a rebate adjuste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held by the AO. In view of the above facts and circumstances of the case, we are of the view that the CIT(A) has rightly deleted the disallowance, because the assessee has not made any payment on which TDS is to be deducted rather license fee is paid by the parties is for granting of license and not for any expense, which was claimed by the assessee. Accordingly, we confirm the order of CIT(A) deleting the disallowance - Decided against revenue - I.T.A Nos.1397, 1398 & 1428/Kol/2013 - - - Dated:- 4-5-2016 - Shri Mahavir Singh, JM And Shri M. Balaganesh, AM For the Appellant : Shri Niraj Kumar, CIT, DR For the respondent : Shri N. K. Podder, Senior Counsel ORDER Per Shri Mahavir Singh, JM All these appeals by revenue are arising out of separate orders of CIT(A)-1, Kolkata vide Appeal Nos. 363/CIT(A)-1/C-2/08-09, 580/CIT(A)-1/C-2/09-10 and 293/CIT(A)-1/C-2/10-11 all dated 22.02.2013. Assessments were framed by DCIT, Circle-2, Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Years 2006-07 to 2008-09 vide his separate orders dated 31.12.2008, 31.12.2009 and 30.11.2010 respectively. 2. The first co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be subject matter to the provisions of section 194C or 194J of the Act. This was restricted to the case of the assessee in view of the public function to be undertaken by it, as a result of restructuring of West Bengal State Electricity Distribution Co. Ltd. The wheeling charges represent the charges for permitting use of state transmission utility for permitting use of state transmission utility by the person other than the distribution licensee. The transmission charges simply constitute a fee for availing of the transmission utility to be used by open asset concept for distribution of electricity, licensees and consumers. In our view, the wheeling charges and transmission charges are neither contractual payments nor fee for technical services u/s. 194C or 194J of the Act as contended by revenue because there is no human intervention or human interface and, therefore, this cannot be contractual payments or fee for technical services. Therefore, we are of the view that there is nothing on record to support the contentions of the revenue that the wheeling charges and transmission charges assumed the character of contractual payments and fee for technical services as noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Electricity Board to Power Grid Corporation but this fact is incorrect. The power factor rebate is not paid to anybody. This rebate is granted to the high voltage industrial consumers for their energy consumption bills. Once this is the position, there is no payment made by assessee but this was a rebate adjusted against electricity consumption bills. This cannot be subject matter of TDS under any of the provisions of the Act whether Sec. 194C or 194J of the Act. Accordingly, CIT(A) has rightly deleted the disallowance made by AO by invoking the provisions of section 40(a)(ia) of the Act. We confirm the order of CIT(A) and this common issue of revenue s appeals is dismissed. 7. In respect to item no. 3 i.e. Unscheduled Interchange (UI). We find that the tariffs for power purchased from different Central Sector Power Stations are determined by the Central Electricity Regulatory Commission (CERC). Availability based Tariff (ABT) has been introduced with effect from 01.04.2003 in Eastern Region for purchase of power from Central Sector Power Station. In the availability Based Tariff (ABT) there are three parts. (i) Capacity charge (ii) Energy charge (iii) Un Scheduled Interchang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 12 of the Electricity Act, 2003 provides that no persons shall transmit electricity, or distribute electricity or undertake trading in electricity, unless he is authorized to do so by a licence issued under Section 14, or is exempt under Section 13 of the said Act. Section 14 of the said Act further provides that the appropriate commission (the Central Electricity Regulatory Commission constituted under Section 76 of the said Act or the State Electricity Regulatory Commission constituted under Section 82 of the said Act) may, on an application made to it under Section 15, grant a licence to any person - (a) to transmit electricity as a transmission licensee; or (b) to distribute electricity as a distribution licensee: or (c) to undertake trading in electricity as an electricity trader in any area as may be specified In the licence. The Government of West Bengal, Department of Power and Non Conventional Energy Sources, Kolkata notified the West Bengal Electricity (Fees for Application for Grant of Licence) Rules 2005 by Gazette notification dated 24th November, 2005. Rule 3(1) of the said rules provides that every application made to the commission for grant of licence under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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