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TMI Blog1970 (4) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment made upon the assessee-company for the assessment year 1961-62, the relevant accounting year being the one ended on 31st March, 1961. the assessee-company was carrying on the business of supplying electricity to consumers at Nadiad. One of such consumers was the Nadiad Municipality. There was an agreement between the assessee-company and the Nadiad municipality under which the assessee-company was to supply electricity to the Nadiad Municipality for "street lighting etc., purposes" at the rate fixed in the agreement at 19 paise per unit. The normal rate charged by the assessee-company to its other consumers was 30 paise per unit. The agreement was for a fixed period of ten years which expired on 31st August, 1960, i.e., during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the amount calculated at the rate of 11 paise per unit which at the end of the accounting year, i.e., on 31st March, 1961, amounted to Rs. 35,251.02, was shown by it in its balance-sheet as an asset under the head "Sundry creditors considered doubtful". The revenue sought to bring to tax the said amount of Rs. 35,251.02. The Tribunal has held the said amount not to be includible in the assessable income of the assessee-company. This reference has, therefore, been made at the instance of the Commissioner of Income-tax. As the assessee-company maintains its books of account on the mercantile system, all income, profits and gains which accrued or arose to the assessee-company during the accounting year are liable to be brought to tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o continue to supply electrical energy to the Nadiad Municipality at the same rates as were specified in the said agreement. We are informed that this judgment has been confirmed by a Division Bench of the Gujarat High Court in the Letters Patent Appeal. We have referred to this judgment as it is a case reported in an authorised law reporter. But so far as the record of this case goes, there appears to be nothing to show that there was any right or obligation in the assessee-company to charge the municipality for the electrical energy supplied to it at the rate of 30 paise per unit. The sending of the bills at 30 paise per unit was merely an attempt made by the assessee-company to recover from the municipality amounts calculated at that rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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