2012 (1) TMI 286 - AT - Income Tax

Summary

Issues involved: Disallowance of expenditure on power purchase, Charging of interest under sections 234B and 234C of the Act.

Expenditure on Power Purchase:
The appellant contested the disallowance of a significant sum representing expenditure on power purchase payable to UPPCL. The Tribunal had previously ruled in favor of the appellant for the assessment year 1994-95, stating that the liability crystallized in that year itself. However, in subsequent years, the Tribunal decided against the appellant, noting that the dispute over the differential rate between the agreement rate and the rate charged by UPSEB remained unresolved, making the liability uncertain. The appellant argued that the treatment of the amount in the profit and loss account did not affect the accrual of liability, citing relevant case law. The Tribunal, in the later decision, considered all available facts, including the recommendation of an independent authority, and ruled in favor of the revenue based on these updated considerations.

Charging of Interest under Sections 234B and 234C:
Regarding the charging of interest under sections 234B and 234C, the appellant relied on a Supreme Court decision in the case of JCIT Vs. Rolta India Ltd, which clarified that assessed tax refers to tax assessed on regular assessment for the purpose of interest levy under these sections. The appellant's arguments were dismissed, affirming the chargeability of interest under sections 234B and 234C even in cases of assessment under section 115JA.

In conclusion, the Tribunal upheld the disallowance of the expenditure on power purchase and the charging of interest under sections 234B and 234C, resulting in the dismissal of the appeal.