THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM vs. KERALA STATE ELECTRICITY BOARD, PATTOM

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ITA/121/2015HC KeralaKLHC01025522201516 June 2015Bench: HONOURABLE MR. JUSTICE SHAJI P.CHALY,HONOURABLE MR.JUSTICE ANTONY DOMINIC4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that both issues were already decided in favour of the assessee by virtue of its own previous judgment in Kerala State Electricity Board v. Deputy Commissioner of Income Tax [(2010) 329 ITR 91]. The Court found no grounds to interfere with the ITAT's order, which had confirmed the Commissioner (Appeals)'s decision. Therefore, the appeal filed by the Revenue was dismissed. The principle established is that electricity duty and surcharge are not covered by Section 43B for the purpose of disallowance if not paid within the previous year, and that the decision in the assessee's own case regarding Section 115JB is binding.

What were the facts?

The Revenue, Commissioner of Income Tax, Thiruvananthapuram, filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, for the assessment year 2008-09. The appeal challenged two issues decided by the ITAT in favour of the assessee, Kerala State Electricity Board. The first issue concerned the disallowance of electricity duty and surcharge under Section 43B of the Income Tax Act, which was reversed by the Commissioner (Appeals) and confirmed by the ITAT. The second issue related to the application of Section 115JB for taxing book profit, where the Commissioner (Appeals) and the ITAT had ruled in favour of the assessee.

What were the issues?

1. Whether the electricity duty and surcharge payable under the Electricity Duty Act, 1963, are allowable as a deduction in the year of accrual or only in the year of actual payment, in light of Section 43B of the Income Tax Act? 2. Whether the provisions of Section 115JB of the Income Tax Act are applicable for taxing book profit in the case of the assessee? Assessee's Contentions: The assessee contended that the electricity duty and surcharge are not taxes, cess, or fees in the nature contemplated by Section 43B, and therefore, the deduction should be allowed in the year of accrual. Regarding Section 115JB, the assessee argued that the issue was covered by a previous judgment of the High Court. (The judgment does not record specific arguments for the assessee on Section 115JB beyond reliance on the precedent). Revenue's Contentions: The Revenue argued that as per Section 43B, amounts payable by way of tax, cess, or fee under any law are deductible only in the year of actual payment, leading to the disallowance of electricity duty and surcharge. The Revenue challenged the ITAT's view on both issues.

Which sections of the Income-tax Act were involved?

Section 43B,Section 115JB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY TUESDAY, THE 16TH DAY OF JUNE 2015/26TH JYAISHTA, 1937 ITA.No. 121 of 2015 () ----------------------- AGAINST THE ORDER/JUDGMENT IN ITA 284/COCH/2014 of I.T.A.TRIBUNAL, COCHIN BENCH DATED 06-02-2015 APPELLANT(S)/APPELLANT/RESPONDENT/REVENUE: ------------------------ THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM.

BY ADVS.SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEP SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT(S)/RESPONDENT/APPELLANT/ASSESSEE: ---------------------------- KERALA STATE ELECTRICITY BOARD, PATTOM, TRIVANDRUM (PAN AABCK5896J)

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16-06-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

APPENDIX IN I.T.A.121/15 APPELLANTS' EXHIBITS: ANNEXURE A: TRUE COPY OF THE ORDER U/S 143(3) OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE -1, TRIVANDRUM DATED 31.12.2010. ANNEXURE B: TRUE COPY OF THE ORDER OF LTHE COMMISSIONER OF INCOME TAX (APPEALS), TRIVANDRUM. ANNEXURE C: TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN ITA NO.284/COCH/2014 DATED 6.2.2015. /TRUE COPY/ PS TO JUDGE

ANTONY DOMINIC & SHAJI P. CHALY, JJ. ----------------------------------- I.T.A.No.121 of 2015 ----------------------------------- Dated this the 16th day of June, 2015 JUDGMENT Antony Dominic, J. 1.This appeal filed by the Revenue is against the order passed by the Income Tax Appellate Tribunal, Cochin Bench in ITA.No.284/14 concerning the assessment year 2008-09.

2.Two issues were raised before the Tribunal. First issue was relating to the electricity duty payable under section 3(1) of the Electricity Duty Act, 1963 and surcharge payable to Government. 3.According to the Assessing Officer, as per the provisions of section 43B of the Income Tax Act, any amount payable by way of tax, cess or fee under any law is allowable as deduction only in that previous year in which such sum is actually paid. On that basis, the aforesaid amounts were disallowed. This was reversed by the commissioner (Appeals) and that order was confirmed by the Tribunal.

ITA.121/15 2 4.Though the Revenue is challenging the correctness of this view taken by the Tribunal, we notice that the issue stands already decided in favour of the assessee by virtue of the judgment of this Court in Kerala State Electricity Board v. Deputy Commissioner of Income Tax [(2010) 329 ITR 91]. 5.The second issue is with regard to the application of section 115JB of the Act so as to tax book profit. The Commissioner (Appeals) found this issue in favour of the assessee and this was confirmed by the Tribunal. This issue is also covered in the aforesaid judgment of this Court rendered in the case of the respondent assessee itself.

6.Thus, both the issue raised by the appellant stands answered against it. Therefore, we do not find any ground to interfere with the order of the First appellate authority as confirmed by the Tribunal. Appeal fails and is therefore dismissed.

Sd/- ANTONY DOMINIC, Judge. Sd/-

SHAJI P. CHALY, Judge. kkb.

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