D.C.I.T.Cir - 2,Kol., Kolkata V. M/s West Bengal State Electricity Transmission Co Ltd., Kolkata

ITA 1822/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7937 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DAS JCIT SRDR
• Assessee Lawyers: SANJAY BHATTAHARYA
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1822/KOL/2012 ASSESSMENT YEAR:2009-10 DCIT, CIRCLE-2, P-7, CHOWRINGHEE SQUARE, KOLKATA- 700 069 / V/S . M/S WEST BENGAL STATE ELECTRICITY TRANSMISSION CO. LTD., BIDYOUT BHAWAN, BLOCK-D, SECTOR-II, KOLKATA 700 091 [ PAN NO.AAAW 6952 G ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI A.K. DAS. JCIT, SR-DR /BY RESPONDENT SHRI SANJAY BHATTAHARYA, FCA /DATE OF HEARING 30-07-2014 /DATE OF PRONOUNCEMENT 08-09-2014 / 30/10/14 /O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA IN APPEAL NO.1103/CIT(A)-/ CIRCLE-59/2011-12 DATED 06-09- 2012. ASSESSMENT WAS FRAMED BY JCIT (OSD), CIT-1, K OLKATA U/S143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 29-12- 2011 FOR THE ASSESSMENT YEAR 2009-10. 2. FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF INTEREST INCOME. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUNDS NO.1 AND 2:- ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 2 (1). WHETHER ON THE FATS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, KOLKATA HAS ERRED IN BOTH LAW AND FACTS I N OBSERVING THAT INTEREST INCOME DID NOT BELONG TO THE ASSESSEE COMP ANY? (2) WHETHER ON THE FATS AND THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A)- I, KOLKATA HAS ERRED IN BOTH LAW AND FACTS IN DELET ING THE ADDITION ON AC. OF INTEREST RS.3,46,97,166/- TO THE TOTAL INCOME OF THE ASSESSEE WITHOUT SHOWING ANY REASONS THEREOF. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO EXPLAINED AS TO WHY INTER EST AMOUNTING TO RS.3,46,97,166/- ON WHICH TDS OF RS.39,31,189/- WA S DEDUCTED, IS NOT OFFERED AS INCOME OF THE ASSESSEE. THIS INTEREST INCOME WAS EARNED ON ACCOUNT OF DEPOSITS MADE WITH AXIS BANK LTD. THE ASSESSEE EXPL AINED THAT WEST BENGAL STATE ELECTRICITY TRANSMISSION CO. LTD, (WBSETCL FO R SHORT) IS A WEST BENGAL GOVERNMENT ENTERPRISE AND THE STATE TRANSMISSION UT ILITY (STU FOR SHORT). IT IS LICENSED U/S 14 OF THE ELECTRICITY ACT, 2003 AND WB SETCL AS A STU IS STATUTORILY REQUIRED AND ESTABLISHED AND MAINTAINED AS EXTRA HIGH VOLTAGE (EHV FOR SHORT) TRANSMISSION NETWORK THROUGHOUT THE STAT E OF WEST BENGAL INTERCONNECTING THE GENERATING STATIONS WITHIN THE STATE TO THE DIFFERENT LOAD CENTERS. IT IS REQUIRED TO ESTABLISH INTERCONNECTIN G POINTS WITH THE REGIONAL AND NATIONAL TRANSMISSION SYSTEM SO AS TO FACILITATE IM PORT AND EXPORT OF ELECTRICITY FROM ONE STATE OR REGIONS TO AND FROM WEST BENGAL. THE INTERCONNECTION BETWEEN THE GENERATING STATIONS THROUGH TRANSMISSIO N SYSTEM AND THE DISTRIBUTION SYSTEM CONSTITUTES THE STATE POWER GRI D (SPG FOR SHORT). THE PARAMETERS FOR OPERATING GRIDS AS LAY DOWN UNDER TH E STATE ELECTRICITY GRID CODE BY WEST BENGAL ELECTRICITY REGULATORY COMMISSION (W BERC FOR SHORT). THE RESPONSIBILITY FOR SUPERVISING AND MAINTAINING GRID DISCIPLINE IN THE STATE AS LAID DOWN UNDER STATE GRID CODE, IS ENTRUSTED UPON STATE LOAD DISPATCH CENTRE (SLDC FOR SHORT) WHICH IS A WING OF THE STU BUT IND EPENDENT AND DT. IN ORDER TO MAINTAIN GRID DISCIPLINE AND ENSURE SAVE OPERATI ON OF THE POWER SYSTEM, THE ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 3 STATE AND CENTRAL REGULATORY COMMISSION HAVE INTROD UCED THE SYSTEM WHEREBY A PENAL CHARGE IS IMPOSED ON THE DEFAULTING POWER U TILITY FOR DEVIATING FROM THE SCHEDULED ENERGY GENERATION / WITHDRAWAL PROGRAMME. THIS PENAL CHARGE ON THE UI CHARGE IS LEVIED ON A GRADED SCALE DEPENDING ON THE EXTENT TO WHICH THE SYSTEM FREQUENCY IS AFFECTED BY SUCH UNSCHEDULED GE NERATION OR POWER WITHDRAWAL. THE UI CHARGE WAS INTRODUCED IN WEST BE NGAL BY WBERC FROM 01-01-2008. THE WBERC IS AUTHORIZED UNDER THE ELECT RICITY ACT 2003 TO FRAME REGULATIONS FOR OPERATION OF STATE POWER GRID AND T HE ADMINISTRATION OF THE UI FUNDS FOR SUCH PURPOSE OF WBERC HAS FRAMED THE WEST BENGAL ELECTRICITY REGULATORY COMMISSION (BALANCING AND SETTLEMENT COD E) REGULATION, 2008. THE RELEVANT PORTION OF REGULATION-5 READS AS UNDER :- 5. SLDC-UI FUND-WSETCL SLDC SHALL OPEN AN ACCOUN T PREFERABLY WITH ELECTRONIC CLEARING FACILITY WITH THE NAME AND STYLE OF SLDC-UI FUND WBSETCL IN A NATIONALIZED/SCHEDULED COMMERC IAL BANK WITHIN 27 TH NOVEMBER 2007 FOR THE PURPOSE OF HANDLING UI CHARG ES IN PURSUANCE TO REGULATION 5.13 OF THE TARIFF REGULATI ONS. SUCH FUND WILL BE MANAGED IN THE FOLLOWING MANNER: I) SUCH ACCOUNT SHALL BE OPERATED BY THE DDO WITH THE CHEQUE SIGNING AUTHORITY FOR PAYMENT UPTO RS.5 LACS. FOR P AYMENT ABOVE RS.5 LACS SUCH CHEQUE SIGNING AUTHORITY SHALL BE JO INTLY WITH DDO AND THE OFFICER IN CHARGE OF SLDC. II) ALL DEPOSIT FOR UI CHARGES PAYABLE BY ANY LICENSEE SHALL BE THROUGH BANK DRAFT IN FAVOUR OF THE SAID ACCOUNT OR THROUGH ELECTRONIC CLEARANCE SYSTEM WHERE SUCH FACILITY IS AVAILABLE. COST OF SUCH DRAFT AND SERVICES SHALL BE PAYABLE BY THE DEPOSITOR. III) UI CHARGES RECEIVED BY ANY ENTITY SHALL BE THROUGH ACCOUNT PAYEE CHEQUE OR THROUGH ELECTRONIC CLEARANCE SYSTEM WHERE SUCH FACILITY IS AVAILABLE. IV) SLDC SHALL MAINTAIN THE ACCOUNTS OF THE SAID FUND S EPARATELY AND SUCH ACCOUNT SHALL NOT BE CONSIDERED AS THE PART OF THE ACCOUNTS OF THE SLDC. V) ACCOUNTS OF SUCH FUND SHALL BE AUDITED BY CHARTERED ACCOUNTANT / COST ACCOUNTANT IN FULL TIME PRACTICE FOR EVERY FIN ANCIAL YEAR WITHIN 30 TH JUNE OF THE SUCCEEDING YEAR AND SUCH AUDITED ACCOU NTS SHALL BE SUBSEQUENTLY SUBMITTED TO THE COMMISSION W ITHIN 31STD JULY OF THAT YEAR FOR APPROVAL. ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 4 VI) THE ENTITY SHALL PAY THE UI CHARGES WITHIN 10 DAYS OF THE BILLING DATE IN PURSUANCE TO REGULATION 7.2 OF THE STATE GR ID CODE. THE DDO WILL ACTIVATE THE LETTER OF CREDIT IF THE AMO UNT RECEIVABLE FROM ANY ENTITY IS NOT RECEIVED FULLY OR PARTLY WIT HIN TEN DAYS FROM DATE OF ISSUANCE OF THE WEEKLY UI SETTLEMENT. 4. IN TERMS OF REGULATION-5 OF WEST BENGAL REGULATO RY COMMISSION (BALANCING AND SETTLEMENT CODE) 2008 SLDC IS MAINTA INING CURRENT ACCOUNT NAMED AS SLDC UI FUND WBSETCL WITH AXIS BANK LTD., HOWRAH BRANCH AND FIXED DEPOSIT IN THE SAME BANK WAS OPENED AS PER TH E DIRECTIVE OF WBSERC VIDE MEMO NO.WBEC/B-36/3ABT/0286 DATED 19-05-2008. THE ASSESSEE BEFORE THE ASSESSING OFFICER CONTENDED THAT IN THE ABSENCE OF PAN FOR SLDC. THE CURRENT ACCOUNT WAS UTILIZING THE PAN OF THE AS SESSEE. CONSEQUENTLY, TDS WAS MADE AND CERTIFICATE OF TDS WAS ISSUED IN THE N AME OF ASSESSEE, ALTHOUGH ASSESSEE HAS NO CONTROL OVER UTILIZATION OF SUCH IN COME. THE UTILIZATION OF INCOME IS REGULATED BY REGULATION-5.14.8 OF WEST BE NGAL ELECTRICITY REGULATORY COMMISSION (TERMS AND CONDITIONS OF TARIFF) REGULAT IONS, 2007 AS UNDER:- 5.14.8 IF AT THE END OF A FINANCIAL YEAR, THERE IS ANY AMOUNT IN UI ACCOUNT THEN 90% OF SUCH AMOUNT WILL BE USED FOR TH E FOLLOWING PURPOSES: (A) THE ANNUAL AMOUNT REQUIRED TO OPERATE SLDC SHALL BE TRANSFERRED AS PER THE BUDGET TO BE APPROVED BY THE SLDC FROM THE COMMISSIONS. (B) THE BALANCE AMOUNT SHALL BE DISTRIBUTED AMONG THE L ICENSEE IN PROPORTION TO THE AMOUNT OF ENERGY REQUIRED BY THE LICENSEE FOR SELLING THE POWER TO ITS CONSUMER AND LICENSEE OF THE COMMI SSION. SUCH DISTRIBUTED AMOUNT SHALL BE KEPT IN THE POWER PURCH ASER FUND OF THE CONCERNED LICENSEE. 5. BUT THE AO HAS NOT ACCEPTED THE CONTENTION OF TH E ASSESSEE AND ADDED THE INTEREST INCOME TO THE RETURNED INCOME OF THE ASSES SEE BY OBSERVING AS UNDER:- THE CONTENTION OF THE ASSESSEE-COMPANY IS CONSID ERED AND THE FACTS BROUGHT ON RECORD WERE EXAMINED. HOWEVER, THE CLAIM THAT THIS INCOME DOES NOT FORM PART OF THE INCOME OF THE ASSESSEE-CO MPANY APPEARS UNACCEPTABLE. ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 5 IT IS NOTED THAT THE BANK ACCOUNT IS MAINTAINED BY THE STATE LOAD DESPATCH CENTRE (SLDC), BUT AS ADMITTED IN THE ASSE SSEE-COMPANYS SUBMISSIONS, THE SLDC IS MERELY THE CUSTODIAN OF SU CH AN ACCOUNT AND DOES NOT HAVE ANY PROPRIETORIAL RIGHTS TO THE FUNDS OR INCIDENTAL INCOMES GENERATED THEREFROM. AS PER THE TERMS OF THE SCHEME , THE DEPOSITS WERE MADE FROM THE FUNDS OF THE ASSESSEE-COMPANY AND NOT SLDC, AND THE FUNDS DO NOT FORM PART OF THE ACCOUNTS O THE SLDC A T ALL. IN SUCH A 9CIRCUMSTANCE, PIT CAN BE CONCLUDED THAT THE PAN CO RRECTLY UTILIZED FOR MAINTENANCE OF THE ACCOUNT IS THE PAN OF THE ASSESS EE-COMPANY, AND NOT MERELY BECAUSE A SEPARATE PAN WAS NOT AVAILABLE FOR SLDC. FURTHER, WHEREAS THE ACCOUNTS WERE OPENED IN TERMS OF THE SCHEME FORMULATED BY THE WEST BENGAL ELECTRICITY REGULARIT Y COMMISSION (WBERC), AND IT IS THIS BODY THAT DIRECTS THE LEVY OF UI CHARGES AS WELL AS ANY OTHER SUCH PAYMENTS & C, THE FUNDS HAVE NOT BEE N TRANSFERRED TO WBERC AS SUCH, NOR DOES THE INCOMES INCIDENTAL TO T HE DEPOSIT FORM PART OF THE INCOME OF THE COMMISSION. IN ESSENCE, THEREFORE, THE FUNDS ARE IN THE NATURE OF A SECURITY DEPOSIT, FROM WHICH PENAL CHARGES ARE DEDUCED FROM TIME TO T IME IN CONNECTION WITH THE MAINTENANCE OF POWER GENERATION AND WITHDR AWAL SCHEDULES. THE FUNDS DEPOSITED ARE UNQUESTIONABLY THE FUNDS OF THE ASSESSEE- COMPANY, EVEN IF WITHDRAWAL FROM THE SAME IS GOVERN ED BY THE DIRECTIVES OF THE REGULATORY COMMISSION. FURTHER YET, AS PROVI DED FOR IN REGULATION 5.14.8 OF THE WBERC ( TERMS AND CONDITIONS OF TARIFF ) REGULATIONS, 2007, THE ASSESSEE-COMPANY, BEING A LICENSEE, IS ENTITLED TO PART OF THE AMOUNTS REMAINING IN THE ACCOUNT AT THE END OF EACH FINANCI AL YEAR. IN THE CIRCUMSTANCES, THE ASSESSEE-COMPANYS ACCOUN TING TREATMENT IS UNACCEPTABLE. THE AMOUNT OF RS.3,46,97,166- ACCRUIN G AS INTEREST ON THE DEPOSIT IS BEING ADDED TO INCOME OF THE ASSESSEE-CO MPANY UNDER THE HEAD INCOME FROM OTHER SOURCES. FURTHER, IT IS NOTABLE THAT THERE WAS NO DISCLOSURE OF THE AMOUNT ANYWHERE IN THE AUDITED ACCOUNTS, AND WAS DETECTED ONLY ON THE BASIS OF THE STATEMENT ISSUED BY THE BANKER. THE ASSESSEE-CO MPANY THEREFORE APPEARS GUILTY OF HAVING CONCEALED PARTICULARS OF I NCOME, AS WELL AS FURNISHED INACCURATE PARTICULARS OF INCOME IN ITS C OMPUTATION AND SUBSEQUENT SUBMISSIONS. ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 6 6. AGGRIEVED, ASSESSEE FILED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSION OF ASSESSEE DELETED THE ADDITION BY OBSERVING AS UNDER:- .. AFTER CAREFULLY CONSIDERATION OF THE ORDER OF T HE AO AND WRITTEN SUBMISSION FILED BY THE A/R, IT IS NOTED THAT THE A SSESSING OFFICER ADDITION OF RS.3,46,97,166/- ON ACCOUNT OF INTEREST INCOME FROM AXIS BANK WAS MADE UNDER THE HEAD INCOME FROM OTHER SOURCES AS PER IT COMPUTATION AND ADDITION WAS ALSO MADE FOR THE SAME OF AMOUNT I NTEREST FOR COMPUTATION OF BOOK PROFIT UNDER THE MAT PROVISIONS . ASSESSEE IS A WEST BENGAL GOVT. ENTERPRISE (STU) REGULATED UNDER SECTI ON 14 OF ELECTRICITY ACT, 2003. THE RESPONSIBILITY FOR MAINTAINING GRID DISCIPLINE IN THE STATE IS ENTRUSTED TO STATE LOAD DESPATCH CENTRE (SLDC). IN ORDER TO ENSURE GRID DISCIPLINE PENAL CHARGE CALLED UI CHARGE IS LEVIED BY WBERC FROM 1 ST JANUARY, 2008. IN COMPLIANCE OF REGULATION OF WBERC CURRENT ACCOUNT IN AXIS BANK WAS MAINTAINED AND PAN OF THE ASSESSEE WA S USED FOR THE OPERATION OF ABOUT ACCOUNT NAMED SLDC UI FUND WBSET CL. ASSESSING OFFICER MADE ADDITION OF INTEREST INCOME ON DEPOSIT MAINTAINED IN THE ABOVE ACCOUNT IN THE HANDS OF THE ASSESSEE COMPANY, AS PER 26AS STATEMENT WHILE THE ASSESSEE CONTENDED THAT INTERES T OF RS.3,46,97,166/- DID NOT BELONG TO THE APPELLANT AND THIS INCOME BEL ONGED TO WBERC AS THE FUNDS UTILIZED IN FORM OF UI CHARGES BELONGED T O WBERC. SUBSEQUENTLY, ON 21.10.201 AS TRUST UNDER THE NAME SLDC-UI-FUNDS- WBSETCL WAS CREATED IN ACCORDANCE WBERC REGULATIONS FOR COLLECTION OF UI CHARGES AND INCOME EARNED FROM INVESTMENT MAD E FROM SAID UI CHARGES. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS O F THE CASE THAT THIS INTEREST OF RS.3,46,97,166/- DID NOT BELONG TO THE ASSESSEE NOR IT WAS AN INCOME IN THE HANDS OF SLDC AND THE SAID INCOME SHOULD NOT BE CON SIDERED IN THE ASSESSMENT OF THE ASSESSEE. IT IS A FACT THAT THE INCOME ARISI NG OUT OF THE INVESTMENTS MADE OUT OF THE BALANCE OF UI CHARGES, ACTUALLY BELONGED TO WBERC WHICH WAS A COMMISSION FORMED BY THE GOVERNMENT AND CONSEQUENTL Y SUCH INTEREST BEING THE INCOME OF THE GOVERNMENT, THERE SHOULD NOT ARIS E ANY TAXABILITY THEREOF. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT ACCORD ING TO HIM SLDC WAS ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 7 MERELY THE CUSTODIAN OF THE ACCOUNT AND ALLEGEDLY I T DID NOT HAVE ANY PROPRIETARY RIGHTS TO THE FUNDS OR INCIDENTAL INCOMES GENERATED THERE FROM. THE ASSESSING OFFICER ALSO STATED THAT DEPOSITS HAD BEEN MADE FRO M THE FUNDS OF THE ASSESSEE AND NOT OF SLDC AND THE FUNDS DID NOT FORM PARTS OF THE ACCOUNT OF THE SLDC AT ALL. THE ASSESSING OFFICER WENT ON TO HOLD THAT THE ASSESSEES PAN HAD CORRECTLY BEEN UTILIZED FOR THE MAINTENANCE OF THE ACCOUNT. T HE ASSESSING OFFICER ALSO STATED THAT IN HIS ORDER THAT THE ACCOUNTS HAVE BEE N OPENED IN TERMS OF THE SCHEME FORMULATED BY THE WEST BENGAL ELECTRICITY RE GULATORY COMMISSION (WBERC) AND IT WAS THAT BODY WHICH DIRECTED THE LEV Y OF UI CHARGES AS WELL AS ANY OTHER SUCH PAYMENTS. HE FURTHER MENTIONED THAT SINCE THE FUNDS HAD NOT BEEN TRANSFERRED TO WBERC AS SUCH, THE INCOME INCID ENTAL TO THE DEPOSIT SHOULD NOT FORM PART OF THE INCOME OF WBERC. THE ASSESSING OFFICER HELD THAT THE FUNDS DEPOSITED WERE ALLEGEDLY UNQUESTIONABLY THE F UNDS OF THE ASSESSEE. ON THE BASIS OF THESE OBSERVATIONS, THE ASSESSING OFFICER HELD THAT THE ASSESSEES ACCOUNTING TREATMENT WAS UNACCEPTABLE TO HIM AND HE ADDED THE INTEREST OF RS.3,46,97,166/-TO THE TOTAL INCOME OF THE ASSESSEE . BUT WE FIND THAT THE INTEREST OF RS.3,46,97,166 HAD ARISEN OUT OF THE INVESTMENT MADE OUT OF BALANCE OF UI CHARGES WHICH BELONGED TO WBERC WHICH WAS A COMMISS ION FORMED BY THE GOVERNMENT AND CONSEQUENTLY THAT INTEREST INCOME WA S ACTUALLY AN INCOME IN THE HANDS OF THE GOVERNMENT. SINCE THE INTEREST INC OME WAS AN INCOME OF THE GOVERNMENT, THERE COULD NOT ARISE ANY TAXABILITY TH EREOF. IT IS ALSO A FACT THAT THE RELEVANT DEPOSITS HAD BEEN MADE UNDER THE PAN OF TH E ASSESSEE SINCE AT THE RELEVANT TIME NO SEPARATE BODY HAD BEEN CREATED FOR THE MAINTENANCE OF THE UI ACCOUNTS. WE FIND THAT ON 21-10-2011 A TRUST UNDER THE NAME AND STYLE OF SLDC-UI FUND-WBSETCL WAS CREATED IN ACCORDANCE WI TH THE WBERC REGULATIONS FOR THE PURPOSE OF MANAGEMENT OF THE FU ND CREATED THROUGH COLLECTION OF UI CHARGES AND INTEREST EARNED FROM T HE INVESTMENT MADE OUT OF THE SAID UI CHARES AND THE TRUST DOES NOT HAVE THE OWNE RSHIP ON THE MONEYS LYING IN THE FUND AND FOR ALL THE TIMES TO COME IT IS THE WBERC WHICH IS THE OWNER OF ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 8 THE FUND OF THE TRUST. WE FURTHER FIND THAT NEITHER ANY ASSET OR ANY INCOME EARNED OUT OF THE UI ACCOUNT COULD EVER BE CONSIDER ED AS ANY INCOME IN THE HANDS OF THE ASSESSEE. THE MONEYS LYING IN THE UI A CCOUNT ALWAYS BELONGED TO THE GOVERNMENT, VIZ. UNDER THE NAME OF WBERC. IT WA S ONLY FOR THE CONVENIENCE IN THE MATTER OF MAKING INVESTMENT IN D EPOSITS OF UI BALANCES THAT THE PAN OF THE ASSESSEE HAD BEEN UTILIZED. HOWEVER, JUST BECAUSE OF UTILIZATION OF PAN RESULTING IN SHOWING THE TDS IN FORM NO.26AS , COULD NOT BE CONSIDERED AS ANY ALLEGED INCOME IN THE HANDS OF TH E ASSESSEE. THE ASSESSING OFFICER WAS REPEATEDLY REQUESTED BY THE ASSESSEE TO GO THROUGH THE RELEVANT DOCUMENTS EXPLAINING HOW UI CHARGES WERE BEING RECO VERED, UTILISATION OF UI CHARGES AND INVESTMENTS REQUIRED TO BE MADE. IN VIE W OF THE ABOVE FACTS OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THIS INTER EST INCOME OF RS.3,46,97, 166/- BELONGS TO WBERC AND NOT OF THE ASSESSEE. ACC ORDINGLY, CIT(A) HAS RIGHTLY DELETED THE ADDITION, AND WE CONFIRM THE SA ME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 8. NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) ALSO COMPUTING THE ABOVE STATED INTEREST INCOME WHILE CO MPUTING BOOK PROFIT U/S 115JB OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLL OWING GROUND NO.3:- (3) WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-I, KOLKATA HAS ERRED IN BOTH LAW AND FACTS I N DELETING THE ADDITION OF INTEREST RS.3,46,97,166/- TO THE ACTION OF COMPU TE BOOK PROFIT U/S 115JB OF THE I.T., ACT ALTHOUGH THIS INTEREST INCOM E HAD NOT BEEN ACCOUNT FOR BY THE ASSESSEE COMPANY? 9. THE FACTS AND CIRCUMSTANCES OF THE CASE ARE CLEA RLY RECORDED IN THE ABOVE GROUND. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT AL SO INCLUDED THIS INCOME IN THE BOOK PROFIT. AGGRIEVED, ASSESSEE PREFERRED APPE AL BEFORE CIT(A) WHO DELETED THE ADDITION BY OBSERVING AS UNDER:- ITA NO.1822/KOL/2012 A.Y. 2009-10 DCIT CIR-2 KOL V. M/S W.B.S.T.CO LTD., PAGE 9 A SIMILAR ADDITION OF AN AMOUNT RS.3,46,97,166.- W AS ALSO MADE WHILE COMPUTING THE BOOK PROFIT U/S. 115JB THE APPELLANT HAD SUBMITTED THE ANNUAL FINANCIAL STATEMENTS WERE PREPARED IN ACCORD ANCE COMPANIES ACT AND WERE AUDITED BY CAG. KEEPING IN VIEW THE ABOVE FACTUAL MATRIX ADDITION OF RS.3,46,97,166/- UNDER THE HEAD OTHER S OURCES IS DELETED AS INCOME DID NOT BELONG TO THE ASSESSEE-COMPANY. THER EFORE GROUND NO. 3 AND 4 ARE ALLOWED. AGGRIEVED, NOW REVENUE CAME IN APPEAL BEFORE US. 10. THIS ISSUE IS NOW ONLY CONSEQUENTIAL BECAUSE WE HAVE ALREADY GIVEN A FINDING ON THE ABOVE ISSUE THAT THIS INTEREST INCOM E DOES NOT BELONG TO THE ASSESSEE. HENCE, THIS ISSUE HAS BECOME ACADEMIC AND IN THE HANDS OF THE ASSESSEE, THIS INCOME CANNOT BE ADDED WHILE COMPUTI NG THE INCOME U/S.115JB OF THE ACT. THIS ISSUE OF THE REVENUES APPEAL IS DISM ISSED. 11. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 08/09/2014 30/10/2014 SD/- SD/- (P.K.BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER KOLKATA, *DKP ! - 08 /09/2014 / 30/10/13 % % % % &% &% &% &% / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT DCIT, CIR-2, P-7, CHOWRINGHEE SQURE, KOL-69 2. / RESPONDENT M/S W.B.S.E. TRANSMISSION CO. LTD. BIDYUT BHA WAN BLOCK-D, S ECTOR-II, KOLKATA 700 091 3. ( / CONCERNED CIT 4. ( - / CIT (A) 5. % , / DR, ITAT, KOLKATA 6. , / GUARD FILE. BY ORDER / , / TRUE COPY/ / ,