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Issues involved: Appeal against order allowing unpaid electricity duty and tax on sale of electricity under section 43B of the Income-tax Act 1961 for assessment year 2006-2007.
Summary: The Revenue appealed against the order allowing unpaid electricity duty and tax on sale of electricity under section 43B of the Income-tax Act 1961 for the assessment year 2006-2007. The Revenue contended that the recovery by way of adjustment by the Gujarat Govt. is not equivalent to the sum actually paid by the assessee as required under section 43B. The assessee argued that electricity duty is not recognized as income or expense in the annual accounts, and the amount was adjusted by the Government against subsidies payable. The assessee also claimed that the amount was fully paid before the due date of filing the return. The Commissioner (Appeals) allowed the relief, stating that the recovery by the Government through adjustment is allowable under section 43B. The Tribunal directed the Assessing Officer to verify the actual dates of payment and entries in the books of accounts, and if payments were made before filing the return, they should be allowed. The Tribunal found that the provisions of section 43B are applicable to the electricity duty and tax on sale of electricity. However, the recovery by the Government through adjustment from grants is allowable under section 43B. The Tribunal directed the Assessing Officer to verify the dates of payment and entries in the books of accounts. If payments were made before filing the return, they should be allowed. The matter was restored to the Assessing Officer for necessary verification, after giving an opportunity to the assessee. The appeal filed by the Revenue was treated as partly allowed for statistical purposes.
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