M/s. GRIDCO Limited, Bhubaneswar V. DCIT, Circle-1(1), Bhubaneswar

ITA 355/CTK/2017

AI Insights

The case involves the Grid Corporation of Orissa Ltd. (GRIDCO), which appealed against the order of the CIT(A) confirming the addition of Rs.143.73 crores to its income for the assessment year 2013-14. This amount represented excess charges billed to consumers, which were later reduced following a directive from the OERC. The Finance Department of the Government of Odisha resolved that GRIDCO should allow a corresponding credit to the DISCOMs through a reduction in charges, leading to the write-off. The Assessing Officer and CIT(A) had rejected the write-off, stating there was no directive from the State Government for such a write-off. The Tribunal, however, noted that the OERC's directive was sufficient and restored the matter to the Assessing Officer to verify the inclusion of the amount in the income for the previous assessment year.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300276 (ITAT-CUTTACK)
• Duration Of Justice: 5 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 21-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER Grid Corporation of Orissa Ltd., GRIDCO House, Janapath, Bhubaneswar. PAN/GIR No (Appellant Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A)-1, Bhubaneswar, for the assessment year 2. S/Shri Ved Jain and P.Venugopal Rao, assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. 3. It was submitted by ld AR that the issue in this appeal was against the confirmation of addition by the ld CIT(A) of Rs.143.73 crores towards IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.355/CTK/2017 Assessment Year : 2013-14 Grid Corporation of Orissa Ltd., GRIDCO House, Janapath, Bhubaneswar. Vs. DCIT, Corporate Circle 1(1), Bhubaneswar PAN/GIR No.AAACD 7873 L (Appellant) .. ( Respondent Assessee by : S/Shri Ved Jain/P.Venugopal Rao Revenue by : Shri M.K.Gautam, Date of Hearing : 20/0 Date of Pronouncement : 20/0 O R D E R This is an appeal filed by the assessee against the order of the ld 1, Bhubaneswar, dated 23.6.2017 in Appeal No. for the assessment year 2013-14. S/Shri Ved Jain and P.Venugopal Rao, ld AR assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. It was submitted by ld AR that the issue in this appeal was against confirmation of addition by the ld CIT(A) of Rs.143.73 crores towards Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER DCIT, Corporate Circle 1(1), Bhubaneswar. Respondent) /P.Venugopal Rao, ARs M.K.Gautam, CIT DR 02/2023 /02/2023 This is an appeal filed by the assessee against the order of the ld in Appeal No.0504/15-16 ld ARs appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. It was submitted by ld AR that the issue in this appeal was against confirmation of addition by the ld CIT(A) of Rs.143.73 crores towards ITA No.355/CTK/2017 Assessment Year : 2013-14 Page2 | 5 write off of receivable from DISCOMs. It was submitted that the write off of amount of Rs.143.73 crores represented the excess charges billed by the assessee in respect of units consumed by the consumers between 0 to 50 units. It was the submission that OERC in suo moto proceedings in Case No.44 of 2011 directed that the charges as levied by the assessee were on higher side and same was reduced. It was the submission that consequent to the direction of OERC in suo moto proceedings dated Nil, the Finance Department had passed a resolution dated 17.10.2013, wherein, it was decided that it is imperative on the part of the assessee to allow corresponding credit to the respective DISCOMs through reduction in charges and consequently Rs.143.73 crores revenue was written off during the year. It was the submission that the Assessing Officer took the stand that there is no order from the State Government in directing the assessee to make the necessary write off of Rs.143.73 crores. It was the submission that the ld CIT(A) had also confirmed the order of the AO. It was the submission that it was only on account of the order of the OERC in suo moto proceeding in Case No.44 of 2011 and it was on account of review petition on 8.4.2011 by the Commissioner-cum-Secretary, Department of Energy, Govt. of Odisha, Bhubaneswar that the direction for the reduction in the tariff rate had been prescribed. Once the OERC had given the direction, the assessee had no other option but to write off the amount. It was the ITA No.355/CTK/2017 Assessment Year : 2013-14 Page3 | 5 submission that the necessary entries had been passed and the write off had been done. 4. In reply, ld CIT DR drew our attention to the order of the ld CIT(A). It was the submission that the ld CIT(A) has given categorical finding that no evidence had been filed to show that Rs.143.73 crores receivable from DISCOMs has been offered as income in the financial year 2012-13 relevant assessment year 2013-14. Further it was the submission that as there is no evidence to show that Rs.143.73 crores receivables has been shown as income by the assessee during the earlier assessment year, the write off of the same cannot be considered during the impugned assessment year. It was the further submission that the independent auditor in his report at para 10 has also given a finding that there is no mention in the Finance Department resolution regarding writing off of the dues of DISCOMs in the books of GRIDCO. It was the submission that there being no direction available the write off is not permissible. 5. We have considered the rival submissions. A perusal of the order of the OERC in Suo moto proceedings No.44 of 2011 clearly show that OREC has directed the assessee to reduce the tariff in respect of certain category of consumers. The quantification of the same has resulted in an amount of Rs.143.73 crores. It is this amount that the assessee has written off during the impugned assessment year. A perusal of the minutes of the meeting of accounting of non cash discount by the Government dated 17.10.2013 ITA No.355/CTK/2017 Assessment Year : 2013-14 Page4 | 5 clearly show that the minute was initiated on the request of the Director (Finance and Corporate Accounts) and as per the said meeting, it has become imperative on the part of the GRIDCO to allow the corresponding credit to the respective DISCOMs through reduction of Rs.143.73 crores. Thus, there is no doubt that the assessee is liable for writing back the amount of Rs.143.73 crores from the excessive charges raised by it for the immediately preceding assessment year. The question remains as to whether the assessee has charged the DISCOMs at the unrevised rate during the assessment year 2012-13 being the immediately preceding assessment year. No evidence is available on record to show that the assessee has charged the DISCOMs at the unrevised rate during the assessment year 2012-13. Therefore, there is no evidence to show that Rs.143.73 crores has been offered by the assessee as its income for the immediately assessment year more specifically Rs.143.73 crores included in the income of the assessee for the immediately preceding assessment year. This being so, the issue is restored to the file of the Assessing Officer for verification as to whether this amount of Rs.143.73 crores is in fact included in the income for the immediately preceding assessment year. If the assessee is able to show that the said amount is included in its income for the immediately preceding assessment year, the write off claimed by the assessment during the relevant assessment year is to be allowed in full. ITA No.355/CTK/2017 Assessment Year : 2013-14 Page5 | 5 6. In the result, appeal of the assessee is partly allowed for statistical purposes. Order dictated and pronounced in the open court on 20/02/2023. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 20/02/2023 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Grid Corporation of Orissa Ltd., GRIDCO House, Janapath, Bhubaneswar 2. The Respondent: DCIT, Corp. Circle 1(1), Bhubaneswar Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//