TMI Blog2020 (2) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that Electricity Duty not being a sum payable by the assessee as a primary liability by way of tax, duty, cess or fee, then provisions of section 43B of the Act were not attracted to the licencee/assessee in respect of the Electricity Duty collected by it for being passed on to the State Government. Addition on account of cost variance reserve - CIT- A deleted the addition - HELD THAT:- On a careful consideration of this issue we are of the considered opinion that inasmuch as there is no dispute in the current year and subsequent year, the rate of tax remained the same and the dispute raised by the Revenue is entirely academic or it may have a minor tax effect. By respectfully following the decision of Hon ble Apex Court in the case of Excel Industries Ltd. [ 2013 (10) TMI 324 - SUPREME COURT] we endorse the view taken by the ld. CIT(A) and hold that this is a revenue neutral transaction. We, therefore, affirm the finding of the ld. CIT(A) on this issue. Addition of provision of surcharge levied but not realized - CIT-A deleted the addition - HELD THAT:- CIT(A) followed the binding precedent of Hon ble High Court in own case [2014 (11) TMI 58 - PUNJAB HARYANA HIGH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Advocate, Sh. V. Raja Kumar, Advocate For the Revenue : Ms. Nidhi Srivastava, CIT/DR ORDER PER K. NARASIMHA CHARY, J.M. Challenging the orders dated 30.03.2016 for assessment year 2008- 09 and 31.03.2016 for assessment year 2011-12 in appeal Nos. 191/14-15 and 194/14-15 respectively passed by the learned Commissioner of Income Tax (Appeals)- Faridabad ( Ld. CIT(A) ), both Dakshin Haryana Bijli Vitran Nigam Ltd. ( the assessee ) and the Revenue have preferred these cross appeals. 2. Brief facts of the case are that the assessee is a Government Undertaking engaged in the business of distribution of electricity in southern Haryana. In so far as the assessment year 2008-09 is concerned, the assessment u/s. 143(3) was completed by order dated 23.12.2010 at nil income but subsequently, pursuant to order dated 07.01.2013 passed by Commissioner of Income-tax u/s. 263 of the Act, assessment was taken up and concluded by order dated 30.01.2014. Since the issues arisen in the appeals of the assessee and the Revenue are emanated from common set of facts, we deem it just and convenient to dispose of them all by this common order. Appeals for A.Y. 2008-09: 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, held that the assessee was unable to prove its point and did not submit any case law on this aspect and therefore, confirmed the view taken by the Assessing Officer. 6. In respect of Electricity Duty, ld. CIT(A) followed the decision of Hon ble Calcutta High Court in the case of CESC Ltd. Vs. CIT dated 14.05.2015, wherein the decisions of both Hon ble Kerala High Court and Gujrat High Court were considered and held that the Electricity Duty deserves to be deleted and granted relief to the assessee. Assessee, therefore, challenged the finding of the ld. CIT(A) confirming the addition made on account of Municipal Tax whereas the Revenue challenged the deletion of addition on account of Electricity Duty vide ground No. 3. 7. It is submitted before us by the ld. AR that collection of Municipal Taxes in the hands of the assessee is not its income and the Government of Haryana makes an adjustment in respect of the Revenue Subsidy payable to the assessee against the amount of Electricity Duty collected by the assessee and payable to the Government. Ld. AR submitted that section 43B of the Act is applicable in respect of deduction claimed in the profit and loss account and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not debited it to the P L Account and whatever amount was not collected, was shown as receivable and contra entry was passed as payable to the State. Once the amount had been debited to the P L Account of the assessee, then the provision of section 43B of the Act were not attracted. In any case, the assessee was only a collecting agent on behalf of the State and it was the amount which was not collected, which was shown as receivable and also on the other side shown as payable to the State. The liability if any, would arise after the amount is collected and that also of the State. In such circumstances, the provision of section 43B of the Act could not be applied and the amount could not be disallowed in the hands of the assessee. Similar accounting has been carried out by the assessee in its books of accounts from Assessment Year 1999-2000 and no disallowance has been made in any of the year. 17. Further, the Hon ble Calcutta High Court in the case of CESC Ltd. vs CIT (supra) has held that where the assessee merely acts as Collecting agent for the State Government and pays the same to the State Government on collection, then, the licencee merely acts as a conduit and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for F.Y. 2008-09 and therefore, there is no loss to the Revenue as the assessee credited the amount of entire 2.93 crores in the profit and loss account of next assessment year. According to ld. CIT(A), accepting the contention of the Assessing Officer would amount to double taxation, which is not permissible. On this premise, ld. CIT(A) allowed the ground of assessee s appeal and deleted the addition. 15. Before us, the assessee placed reliance on the decision of Hon ble Supreme Court in the case of CIT vs. Excel Industries Ltd., 358 ITR 295 (SC). On a careful consideration of this issue we are of the considered opinion that inasmuch as there is no dispute in the current year and subsequent year, the rate of tax remained the same and the dispute raised by the Revenue is entirely academic or it may have a minor tax effect. By respectfully following the decision of Hon ble Apex Court in the case of Excel Industries Ltd. (supra), we endorse the view taken by the ld. CIT(A) and hold that this is a revenue neutral transaction. We, therefore, affirm the finding of the ld. CIT(A) on this issue. 16. Ground No. 2 of Revenue s appeal relate to the deletion of addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar issue had arisen in earlier years also. 20. Ld. CIT(A) noticed that the gross prior period income of ₹ 31,36,87,100/- and prior period expenses of ₹ 21,210/- were crystallized during the year and therefore, disclosed by the assessee in the balance sheet and profit and loss account. According to CIT(A), the claim of assessee on account of Pay anomaly of employee crystallized during the year should have been accepted and he, therefore, granted relief to the assessee. 21. On a perusal of the record and the order dated 24.12.2009 for assessment year 2006-07 in assessee s own case, we hold that the Tribunal also endorsed the view taken by ld. CIT(A) in earlier years that the liability crystallized during the year has to be allowed. We do not find anything improper in the approach of the CIT(A) to allow the expenses in respect of which the liability crystallized during the year. Hence, ground No. 3 of Revenue s appeal is dismissed. 22. Ground No. 4 of Revenue s appeal relates to deletion of a sum of ₹ 1,38,97,653/- on account of loss due to flood, cyclone and fire. The assessee submitted that they have incurred such expenditure on account of loss of fix ..... X X X X Extracts X X X X X X X X Extracts X X X X
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