CESC LTD Vs. C I T

JUDGEMENT

(1.) These income tax appeals arise out of an order dated 21st October, 2003 passed by the Income Tax Tribunal 'E' Bench, Kolkata in ITA Nos. 140, 141 and 142 (Kol)/02. By the order impugned the Ld. Tribunal dismissed the assessee company's appeals against three orders all dated 31st December, 2001 passed by the Commissioner of Income Tax (A) for the assessment years 1986-87, 1987-88 and 1989-90.

(2.) The facts of the case, briefly stated are that the assessee company (appellant herein) did not include the unpaid electricity duty while computing disallowance to be made under Section 43 of the Income Tax Act. The electricity duty was realized by the assessee company from the consumers which is finally paid to the State Government. The assessing officer was of the view that the amount of electricity duty collected by the assessee company from its customers is to be treated as a part of sales proceeds and the amount actually paid to the company during the year was only to be allowed as expenditure. The assessing officer disallowed the amount of Rs. 36,01,942/-, Rs. 2,71,83,582/- and Rs. 2,85,57,061/- being amounts not paid to the Government during the three years under consideration.

(3.) On appeal by the Government the Commissioner of Income Tax (A) noted that Section 3 (1) of the Bengal Electricity Duty Act 1935 levies a charge on the customers for payment of electricity duty. According to Section 5 (1) of the said Act, in the case of energy supply by a licensee, the licensee is statutorily obliged to collect and pay to the State Government at the prescribed time and in the prescribed manner the electricity duty payable under Section 3 on the energy supplied by the licensee to the consumers and the duty so payable constitutes first charge on the amount recoverable by the licensee for the energy supplied by it. The Commissioner held that the electricity duty collected by the appellant licensee from the consumers falls within the purview of Section 43B of the Income Tax Act, 1961 and as such he dismissed the appeals of assessee-company and upheld the order of the assessing officer.