Commissioner of Income-tax v. Poona Electric Supply Co. Ltd.

14 ITR 622High Court1946#4098 most cited

What is Commissioner of Income-tax v. Poona Electric Supply Co. Ltd. authority for?

Expenses incurred by an assessee to bring into existence an asset of a lasting character, such as an electric service line requiring constant inspection, repairs, and replacement, are capital in nature and not revenue expenditure. Amounts contributed by a consumer for a new connection can be considered in direct recoupment of such capital expenditure.

29

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2025.

Also referred to as

Commissioner of Income-tax v. Poona Electric Supply Co. Ltd. · 14 ITR 622 · capital expenditure · revenue expenditure · electric service line · lasting character · consumer contribution

Sections most often in play

Section 69ASection 143(3)Section 115BBESection 37Section 69CSection 148Section 151Section 148A

Issues it is cited on

section 2(19aa)section 181section 282a(1)section 2(13)section 65asection 209section 282asection 210section 211section 43(1)resulting companysection 43(6)

Judgments citing Commissioner of Income-tax v. Poona Electric Supply Co. Ltd.

Deputy Commissioner of Income Tax, Circle-1(1), Raipur vs. Chhattisgarh State Power Distribution Company Ltd., Raipur

In the result ground 2 of the CO

ITA 181/RPR/2023[2010-11]Status: DisposedITAT Raipur14 Dec 2023AY 2010-11

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकरअपीलसं./Ita No.181/Rpr/2023 (Ay-2010-2011) आयकरअपीलसं./Ita No. 182/Rpr/2023 (Ay:2011-2012) आयकरअपीलसं. /Ita No. 183/Rpr/2023(Ay: 2012-2013) आयकरअपीलसं. /Ita No. 184/Rpr/2023(Ay: 2013-2014) आयकरअपीलसं./Ita No. 185/Rpr/2023(Ay: 2014-2015) आयकरअपीलसं./Ita No. 186/Rpr/2023(Ay: 2015-2016) आयकरअपीलसं./Ita No. 187/Rpr/2023(Ay: 2017-2018) आयकरअपीलसं. /Ita No. 188/Rpr/2023(Ay: 2018-2019) Deputy Commissioner Of Income Tax, V Chhattisgarh State Power Distribution Circle-1(1), Raipur S Company Limited, Aayakar Bhawan, Civil Lines, Raipur Vidhyut Seva Bhawan, Daganiya, Raipur Pan: Aadcc6047K & Cross Objection No. 10/Rpr/2023 (2011-12) Cross Objection No. 11/Rpr/2023 (2012-13) Cross Objection No. 12/Rpr/2023 (2014-15) Cross Objection No. 13/Rpr/2023 (2015-16) Cross Objection No. 14/Rpr/2023 (2018-19) Chhattisgarh State Power Distribution V Deputy Commissioner Of Income Tax, Company Limited, Circle-1(1), Raipur S Vidhyut Seva Bhawan, Aayakar Bhawan, Civil Lines, Raipur Daganiya, Raipur Pan: Aadcc6047K (अपीलाथ"/Applicant) (""यथ" / Respondent) : िनधा"रतीक"ओरसे /Assessee By : Shri Praveen Khandelwal & Praveen Goyal, Ca'S राज"वक"ओरसे /Revenue By : Shri Debashish Lahiri, Cit-Dr सुनवाईक"तार"ख/ Date Of Hearing : 24.11.2023 घोषणाक"तार"ख/Date Of Pronouncement : 14.12.2023

For Appellant: Shri Praveen Khandelwal & PraveenFor Respondent: Shri Debashish Lahiri, CIT-DR
Section 143(2)

…f the assessee, and it was not converted into a trading profit because the assessee was engaged in the business of distribution of electrical energy, with which the receipt was connected. In Commissioner of Income-tax v. Poona Electric Supply Co. Ltd. [1946] 14 ITR 622 it was he/d by a Division Bench of the Bombay High Court that the amount received from the Government of Bombay by the Poona Electric Company in reimbursement of expenses incurred for constructing new supply lines for supplying energy to new areas 13 Chhattisgarh State Power Distribution Company Limited (ITA Nos. 181,182,183,184,185,186,187,188/…

Sabarmati Gas Limited, Ahmedabad vs. The Asstt. Commissioner of Income Tax, Gandhinagar Circle, Gandhinagar

Appeal of the Revenue is partly allowed for statistical purposes

ITA 1607/AHD/2016[2010-11]Status: DisposedITAT Ahmedabad28 Feb 2022AY 2010-11
For Appellant: Shri S. N. Soparkar, Sr. AdvocateFor Respondent: Shri Mohd Usman, CIT DR &
Section 250(6)

…after installing service lines - such surplus not of profit in the nature of trading receipt -hence not taxable as business income., 2.7 The appellant further draws the attention of your honour to the decision of CIT Vs. Poona Electric Supply Co. Ltd. (1946) 14 ITR 622 (Bom), wherein it was held as under. (Copy enclosed - Annexure 9) Business income - Trading receipts - contribution received by electricity co. from government towards construction of new supply lines - not in the nature of recurring income or receipts - not an extra charge for supplying electricity to government - not, therefore, trading receipts…

The Joint Commissioner of Income Tax(OSD), Gandhinagar vs. Sabarmati Gas Limited, Gandhinagar

Appeal of the Revenue is partly allowed for statistical purposes

ITA 1533/AHD/2016[2010-11]Status: DisposedITAT Ahmedabad28 Feb 2022AY 2010-11
For Appellant: Shri S. N. Soparkar, Sr. AdvocateFor Respondent: Shri Mohd Usman, CIT DR &
Section 250(6)

…after installing service lines - such surplus not of profit in the nature of trading receipt -hence not taxable as business income., 2.7 The appellant further draws the attention of your honour to the decision of CIT Vs. Poona Electric Supply Co. Ltd. (1946) 14 ITR 622 (Bom), wherein it was held as under. (Copy enclosed - Annexure 9) Business income - Trading receipts - contribution received by electricity co. from government towards construction of new supply lines - not in the nature of recurring income or receipts - not an extra charge for supplying electricity to government - not, therefore, trading receipts…

Interglobe Aviation Ltd., New Delhi vs. JCIT, Special Range- 4, New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 7695/DEL/2018[2015-16]Status: DisposedITAT Delhi29 Oct 2021AY 2015-16

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…est can be applied and accepted not only in subsidy cases but also in case relating to commercial transactions. The Hon’ble Supreme Court in the case of Hosiarpur Electricity (supra) had followed a subsidy case i.e. Poona Electric Supply Co. Ltd., reported in 14 ITR 622 (Bom.) to examine the nature of a commercial transaction. We therefore find merit in the submission of the learned senior counsel for the assessee that it is erroneous on the part of the Revenue to submit that there is patent error or perversity in the order of the Tribunal for Assessment Year 2007-08 when it applies “Purpose Test”. The Hon’ble Su…

Interglobe Aviation Ltd., New Delhi vs. Addl. CIT, Special Range- 4, New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 433/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Oct 2021AY 2014-15

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…est can be applied and accepted not only in subsidy cases but also in case relating to commercial transactions. The Hon’ble Supreme Court in the case of Hosiarpur Electricity (supra) had followed a subsidy case i.e. Poona Electric Supply Co. Ltd., reported in 14 ITR 622 (Bom.) to examine the nature of a commercial transaction. We therefore find merit in the submission of the learned senior counsel for the assessee that it is erroneous on the part of the Revenue to submit that there is patent error or perversity in the order of the Tribunal for Assessment Year 2007-08 when it applies “Purpose Test”. The Hon’ble Su…

Interglobe Aviation Ltd., New Delhi vs. Addl. CIT, Special Range- 4, New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 432/DEL/2018[2013-14]Status: DisposedITAT Delhi29 Oct 2021AY 2013-14

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…est can be applied and accepted not only in subsidy cases but also in case relating to commercial transactions. The Hon’ble Supreme Court in the case of Hosiarpur Electricity (supra) had followed a subsidy case i.e. Poona Electric Supply Co. Ltd., reported in 14 ITR 622 (Bom.) to examine the nature of a commercial transaction. We therefore find merit in the submission of the learned senior counsel for the assessee that it is erroneous on the part of the Revenue to submit that there is patent error or perversity in the order of the Tribunal for Assessment Year 2007-08 when it applies “Purpose Test”. The Hon’ble Su…

Addl. CIT, Special Range- 4, New Delhi vs. Interglobe Aviation Ltd., New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 413/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Oct 2021AY 2014-15

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…est can be applied and accepted not only in subsidy cases but also in case relating to commercial transactions. The Hon’ble Supreme Court in the case of Hosiarpur Electricity (supra) had followed a subsidy case i.e. Poona Electric Supply Co. Ltd., reported in 14 ITR 622 (Bom.) to examine the nature of a commercial transaction. We therefore find merit in the submission of the learned senior counsel for the assessee that it is erroneous on the part of the Revenue to submit that there is patent error or perversity in the order of the Tribunal for Assessment Year 2007-08 when it applies “Purpose Test”. The Hon’ble Su…

Addl. CIT, Special Range- 4, New Delhi vs. Interglobe Aviation Ltd., New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 412/DEL/2018[2013-14]Status: DisposedITAT Delhi29 Oct 2021AY 2013-14

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…est can be applied and accepted not only in subsidy cases but also in case relating to commercial transactions. The Hon’ble Supreme Court in the case of Hosiarpur Electricity (supra) had followed a subsidy case i.e. Poona Electric Supply Co. Ltd., reported in 14 ITR 622 (Bom.) to examine the nature of a commercial transaction. We therefore find merit in the submission of the learned senior counsel for the assessee that it is erroneous on the part of the Revenue to submit that there is patent error or perversity in the order of the Tribunal for Assessment Year 2007-08 when it applies “Purpose Test”. The Hon’ble Su…

Bses Rajdhani Power Ltd., New Delhi vs. ACIT, New Delhi

The appeal is partly allowed

ITA 3688/DEL/2011[2005-06]Status: DisposedITAT Delhi05 Oct 2015AY 2005-06

Bench: Shri I.C. Sudhir & Shri Inturi Rama Rao Assessment Year : 2005-06 Bses Rajdhani Power Ltd., Vs. Assistant Cit, Bses Bhawan, Nehru Place, Circle-3(1), New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent) Assessment Year: 2005-06 Deputy Cit, Vs. Bses Rajdhani Power Ltd., Circle 3(1), Bses Bhavan, Nehru Place, New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent) Assessment Year : 2006-07 Bses Rajdhani Power Ltd., Vs. Assistant Cit, Bses Bhawan, Nehru Place, Circle-3(1), New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent) Assessment Year: 2006-07 Deputy Cit, Vs. Bses Rajdhani Power Ltd., Circle 3(1), Bses Bhavan, Nehru Place, New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent)

Section 154

…lowing decisions: − Rohatak & Hissar Districts Electric Supply Co. (P.) Ltd. vs. CIT: 5 Taxman 116 (Del) − Ranchi Electric Supply Co. Ltd. vs. CIT: 16 Taxman 213 (Pat.) − CIT vs. Cochin Electric Co: 57 ITR 82 (Ker.) − CIT vs. Poona Electric Supply Co. Ltd.: 14 ITR 622 (Bom) − Monghyr Electric Supply Co. vs. CIT: 26 ITR 15 (Orissa.) 16.7. Further, even in the impugned assessment order, the assessing officer has merely emphasized on the point that since the assessee-company is primarily a service provider, the charges received from consumers were revenue in nature, without appreciating that the said charges were…