| |
| The Tax Publishers2020 TaxPub(DT) 1785 (Del-HC) : (2020) 273 TAXMAN 0056 INCOME TAX ACT, 1961
Section 143(3)
Where the assessee was under statutory obligation to transfer a portion of excess gain due to better management and reduction in transmission losses to a designated account then such amount cannot be taxed as assessee's income because this amount was at disposal of DERC and not the assessee.
|
Assessment - Additions to income - Excess amount due to reduction in transmission losses -
Assessee, a joint venture between Tata group and Delhi Government and was in distribution of electricity in north and north-west area of Delhi. AO made addition to assessee's income on the ground of de-recognition of revenue. As per revenue, since assessee-company had not given any refund to customers, the surplus fund which continued to be at disposal of assessee had to be recognised as income. Assessee was under a statutory obligation to set apart 50% of excess amount generated due to overreaching of the targets, for the purpose of consideration of DERC to fix future tariffs either to give relief to consumers or otherwise. A reading of the statute, notification and orders of DERC clearly indicated that the assessee is not free to use efficiency gain amount the way it liked. Whether or not a separate account was opened, when this amount was separately shown under this head in the books. Held: Assessee had no right to appropriate efficiency gain amount and such amount was at the disposal of DERC and being transferable for the benefit of consumers did not form part of assessee's real profit and for the purpose of calculating the taxable income, such amount has to be deducted from total income. Accordingly, no additions could be made on account of de-recognised revenue.
Applied:Poona Electric Supply Company Limited v. CIT (1965) 57 ITR 521 (SC) : 1965 TaxPub(DT) 316 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 80-IA
 SUBSCRIBE FOR FULL CONTENT
OR Try Reload the Page |