M/s. Madhya Pradesh Paschim Kshetra Vidyut Vitran Co. Ltd., Indore V. THE DCIT (TDS), Indore

ITA 652/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5811 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY
• Keywords: Business expenditure; Bad and doubtful debts
• Section: 201(1)

Judgement Text

M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 464/IND/2014 & 652/IND/2014 A.YS.2006-07,2007-08,2008-09,2009-10,2010-11 MADHYA PRADESH MADHYA KSHETRA VIDYUT VITARAN COMPANY LIMITED BHOPAL PAN ADDCM 6799G ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 2(1) BHOPAL ::: RESPONDENT ITA NOS. 650 & 651/IND/2014 A.YS. 2011-12 & 2012-13 ASSTT.COMMR. OF INCOME TAX 2(1) BHOPAL ::: APPELLANT VS MADHYA PRADESH MADHYA KSHETRA VIDYUT VITARAN COMPANY LIMITED BHOPAL ::: RESPONDENT M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 2 ASSESSEE BY SHRI MANOJ MUNSHI RESPONDENT BY SHRI R AJEEV VARSHNEY DATE OF HEARING 20 . 1 .201 6 DATE OF PRONOUNCEMENT 9 . 2 .201 6 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY THE ASSESSEE EMANATE FROM DIFFERENT ORDERS OF THE LEARNED CIT(A)-I, BHOPAL, DATE D 20.3.2013, 10.3.2014, 10.3.2014, 10.3.2014, 4.8.201 4 AND 5.9.2014. 2. THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING OF MADH YA PRADESH GOVERNMENT. THE ASSESSEE IS ENGAGED IN DISTRIBUTION OF ELECTRICITY/POWER TO THE CONSUMERS BY PURCHASING THE SAME FROM ELECTRICITY/POWER GENERATION COMPANY I.E. M/S MADHYA PRADESH POWER GENERATING COMPANY LIMITED WHICH IS TRANSMITTED BY MADHYA PRADESH POWER TRANSMISSION COMPANY (TRANSCO) UNDER A M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 3 TRANSMISSION SERVICE AGREEMENT. THE ASSESSEE FOR TRANSMISSION OF POWER/ELECTRICITY FROM THE GRID OF P OWER GENERATING COMPANY TO THE DISTRIBUTION GRID, PAYS WHE ELING CHARGES AND STATE LOAD DESPATCH CENTRE (SLDC) CHARGES AS PER ELECTRICITY ACT, 2003. THE ASSESSING OFFICER CO NSIDERED THE PAYMENT OF WHEELING AND SLDC CHARGES FOR TRANSMISSION OF ELECTRICITY AS PAYMENT OF FEES FOR TE CHNICAL SERVICES AND CONSIDERED THE ASSESSEE IN DEFAULT OF NON - DEDUCTION OF TAX AT SOURCE UNDER SECTION 194J OF THE ACT AND DISALLOWED THE DEDUCTION OF THE SAME AS BUSINESS EXPENDITURE BY INVOKING PROVISIONS OF SECTION 40(A)( IA) OF THE ACT. 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE PLEADED THAT AT LEAST 12 ITAT BENCHES HAVE CONSIDERED TH E ISSUE WHEREIN THE PAYMENT OF WHEELING CHARGES BY ELECTRICITY DISTRIBUTION COMPANY TO ELECTRICITY TRAN SMISSION M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 4 COMPANY HAVE BEEN HELD PERMISSIBLE. IT WAS PRAYED BEF ORE US THAT THE PROVISIONS OF TDS ARE NOT APPLICABLE ON THE PAYMENT WHEELING CHARGES AND DISTRIBUTION COMPANY IS N OT AN ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TDS. HE PROVIDES A GIST OF PROVISIONS WHICH ARE IN FAVOUR OF T HE ASSESSEE, WHICH IS AS UNDER :- (I) MADHYA PRADESH PASCHIM KSHETRA VIDYUT VITARAN COMPANY LIMITED, INDORE VS. DCIT (TDS) INDORE IN NO S. ITA/IND/653 TO 655 OF 2014 FOR F.Y. 2010-11, 2011-1 2, 2012-13 (FIRST THREE QUARTERS) ORDER DATED 19.11.20 14. (II) MADHYA PRADESH MADHYA KSHETRA VIDYUT VITARAN COMPANY LIMITED, BHOPAL VS. ACIT (TDS) BHOPAL ITAT, INDORE IN ITA NOS. 54 TO 56/IND/2012 (III) ACIT VS . CIRCLE 2(1), JABALPUR VS. MADHYA PRADESH POORVA KSHETRA VIDYUT VITARAN CO. LTD. ITAT, JABNA LPUR ITA NO. 99/JAB/09 DATED 27.08.2009. (IV) PRINCIPAL OFFICER, JAIPUR VIDYUT VITRAN NIGAM LTD. VS. ITO, ITAT JAIPUR A-BENCH DECIDED ON 30.04.2009 MANU/IJ/0005/2009 (V) M/S MAHARASHTRA STATE ELECTRICITY THE ADDL. CIT , RANGE 10(12) DISTRIBUTION CO. LTD. AAYKAR BHAVASN, MK INCOME TAX APPELLATE TRIBUNAL MUMBAI ITA NO. 2276/MUM/2011 (A.Y. 2007-08) ITA NO. M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 5 7539/MUM/2011 (A.Y. 2008-09) DECIDED ON 27 JUNE, 2012. (VI) DELHI TRANSCO LTD., SHAKTI SADAN, ROUSE AVENUE , KOTLA ROAD, NEW DELHI VS. ACIT, CIRCLE 49(1), NEW DELHI, ITAT, DELHI I BENCH ITA NO. 755/DEL/2011 DECIDED ON 9.12.2011. (VII) M/S. GRIDCO LTD., JANAPATH, BHOI NAGAR, BHUBANESWAR VS. ACIT, CIRCLE 2(19), BHUBANESWAR ITAT CUTTACK ITA NO. 404/CTK/2011. (VIII) CHATTISGARH STATE ELECTRICITY BOARD (NOW KNO WN AS CG STATE POWER HOLDING COMPANY LTD.) GROUND FLOOR, VIDYUT SEVA BHAVAN, RAIPUR VS. INCOME TAX OFFICER, (TDS) CENTRAL REVENUE BUILDING CIVIL LINES, RAIPUR ITAT MUMBAI H BENCH ITA NOS. 20 TO 23/BLPR/2010. (IX) PRINCIPAL OFFICER, JAIPUR VIDYUT VITRAN NIGAM LTD. VS. ITO, ITAT JAIPUR A-BENCH, DECIDED ON 30.4.2009 MANU/IJ/002/2009 AND (2009) 123 TTJ (JP) 888. WE HAVE GONE THROUGH ORDER DATED 19.11.2015 OF THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF MADHYA PRADESH PASCHIM KSHETRA VIDYUT VITARAN COMPANY LIMITED, INDORE VS. DCIT (TDS) INDORE IN NOS. ITA/I ND/653 TO 655 OF 2014 FOR F.Y. 2010-11, 2011-12, 2012-13 W HEREIN IT WAS HELD AS UNDER :- M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 6 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILA BLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT T HE ASSESSING OFFICER, IN THE INSTANT CASE, HAS HELD TH E ASSESSEE LIABLE FOR PAYMENT OF INTEREST U/S 201(1A) OF THE ACT FOR NOT DEDUCTING TDS FROM THE PAYMENTS MAD E TO M/S. MP POWER TRANSMISSION COMPANY LIMITED, JABALPUR U/S 194-J OF THE ACT FOR RS.5,00,66,400/- IN FY 2010-11 AND FOR RS.5,45,05,500/- IN FY 2011-12. THE ASSESSING OFFICER HAS ALSO HELD THAT THE ASSESSEE, AS AN ASSESSEE IN DEFAULT FOR TDS OF RS.49,12,40,000 U/S 201(1) AND LIABLE FOR INTEREST OF RS.3,92,94,500/- IN FY 2012-13. ON APPEAL, THE CIT(A) CONFIRMED THE ACTIO N OF THE ASSESSING OFFICER. THE ASSESSEE HAS FILED BEFOR E US THE ORDER OF THE TRIBUNAL IN ITA NOS. 54 TO 56/IND/ 2012 IN ASSESSEES OWN CASE FOR AYS 2005-06 TO 2007-08, WHEREIN THE TRIBUNAL HAS RESTORED BACK THE ISSUE TO THE FILE OF THE ASSESSING OFFICER BY OBSERVING AS UNDER :- 8. IN VIEW OF THE ABOVE DISCUSSION, WE RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR DE CIDING AFRESH BY KEEPING IN VIEW THE DECISION OF COORDINAT E BENCH AS WELL AS DECISION OF HONBLE SUPREME COURT, DISCUSSED HEREINABOVE. THE ASSESSING OFFICER IS TO FIND OUT IF THE RECIPIENT OF INCOME HAVE NO TAX LIABILIT Y AS PER M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 7 ASSESSMENT FRAMED U/S 143(3), THEN NO INTEREST IS LEVIABLE ON THE ASSESSEE FOR NON-DEDUCTION/DELAY IN DEPOSIT OF TDS. EVEN THOUGH THE LD. AUTHORIZED REPRESENTATIVE HAS ALSO ARGUED ON THE TECHNICAL NAT URE OF SERVICES FOR WHICH PAYMENT WAS MADE AND APPLICABILITY OF PROVISIONS OF SECTION 194-J/194-I OF INCOME-TAX ACT, 1961. SINCE WE HAVE DECIDED THE ISS UE ON THE MAIN PLEA, WE ARE NOT DELIBERATING UPON THE OTHER ASPECTS. WE DIRECT ACCORDINGLY. AS BOTH THE PARTIES BEFORE US AGREED THAT THE ISSUE SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSIN G OFFICER FOR ADJUDICATION AFRESH WITH THE SAME DIREC TION AS GIVEN BY THE TRIBUNAL IN AYS 2005-06 TO 2007-08, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND RESTO RE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FO R ADJUDICATION OF THE ISSUE OF LIABILITY OF THE ASSES SEE FOR INTEREST U/S 201(1A) FOR ALL THE YEARS UNDER CONSID ERATION AFRESH IN THE LIGHT OF THE DIRECTION GIVEN BY THE T RIBUNAL IN AYS 2005-06 TO 2007-08 AS QUOTED ABOVE. FURTHE R, REGARDING LIABILITY FOR TDS U/S 201(1) IN FY 2012-1 3 OF RS.49,12,40,000/-, WE SET ASIDE THE ORDERS OF THE L OWER AUTHORITIES AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE THE ISSUE AFRESH IN LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 8 OF HINDUSTAN COCA COLA BEVERAGE P. LTD V. CIT, (2007 ) 293 ITR 226 (SC), WHEREIN IT WAS HELD THAT WHEN THE PAYEE HAD PAID FULL TAX, THEN THE ASSESSEE CANNOT B E TREATED AS AN ASSESSEE IN DEFAULT FOR TDS U/S 201(1 ) OF THE ACT. THUS, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. CONSIDERING ALL THESE FACTS, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME IN VIEW OF VARIOUS DECISIONS OF ITAT AND THE ORDER OF THE HON'BL E SUPREME COURT OF INDIA (SUPRA). ALL THESE APPEALS OF TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. ON THE OTHER ISSUES RAISED IN THE APPEALS, THE LEARN ED DR SUBMITTED A LETTER FROM THE CHIEF FINANCIAL OFFICER , MADHYA PRADESH KSHETRA VIDYUT VITARAN COMPANY, INDORE BY STATING AS UNDER :- AS WE ARE AWARE AND CONVINCED BY OUR COUNSEL THAT UNASCERTAINED LIABILITY/EXPENSES LIKE PROVISION ARE NOT ALLOWABLE UNDER INCOME TAX ACT, HENCE WE DO NOT WAN T M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 9 TO PRESS FOLLOWING GROUNDS AND AMOUNT INVOLVED IN SUBJECTED APPEALS. S.NO. PARTICULARS/GROUND OF APPEAL AMOUNT INVOLVED IN APPEAL ITA/463(RS.IN CR.) AMOUNT INVOLVED IN APPEAL ITA 464 (RS. IN CR.) 01 DEFERRED REVENUE EXPENSES 0.3971 0.3971 02 PROVISION FOR GRATUITY 70.40 70.40 03 PROVISION FOR BAD & DOUBTFUL DEBTS 134.42 135.13 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSEE DOES NOT WANT TO PRESS THESE GROUNDS. WE, THEREFORE, DISMISS THE SAME AS NOT PRESSED. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. SO FAR AS DEPARTMENTAL APPEALS ARE CONCERNED, IN VIEW OF OUR ABOVE DECISION, WE ALSO RESTORE THE ISSUES RAIS ED BY THE REVENUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE M.P. MADHYA KSHETRA VIDYUT VITARAN CO. LTD. ITA NO. 436/IND/2013, 533/IND/2014, 463/IND/2014, 4 64/IND/2014 & 652/IND/2014 ETC. 10 SAME IN VIEW OF VARIOUS DECISIONS OF ITAT AND THE ORDE R OF THE HON'BLE SUPREME COURT OF INDIA (SUPRA). 7. ALL THESE APPEALS OF THE ASSESSEE AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 9 TH FEB., 2016 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 9 TH FEB., 2016 DN/-