2012 (11) TMI 192 - AT - Income Tax

Power Purchase Price payable to UPPCL - Held that - It is mentioned that the question of differential rate, that is the difference between the rate stipulated in the agreement and charged by UPSEB in the bills and the rate recommended by independent authority was in dispute and the said dispute was not resolved during the relevant year. Therefore, the contractual liability on account of such differential rate is not a liability in praesenti. There is a possibility of reduction or extinction of the liability, therefore, it cannot be regarded as an ascertained liability. In this view, the appeals were decided in favour of the revenue - The report was submitted by the Nair Committee much after the close of the previous year - in favour of revenue. Credit of advance tax and self assessment tax paid by the assessee company be allowed after due verification of tax deposit vouchers and tax levied on the assessee - restore this issue to the file of the AO - in favour of assessee for statistical purposes. Interest under sections 234B and 234C - Held that - As decided in Jtc. I. T., Mumbai Versus M/s Rolta India Ltd 2011 (1) TMI 5 - SUPREME COURT OF INDIA for the purpose of levy of interest u/s 234B the term assessed tax means the assessed or regular assessment, thus what is applicable in respect of section 234B of the Act is also applicable in respect of Section 234C of the Act even when assessment is made u/s 115JA - in favour of revenue.

Issues involved:
1. Disallowance of expenditure incurred on "Power Purchase Price" payable to Uttar Pradesh Power Corporation Limited (UPPCL) by the Assessing Officer.
2. Charging of interest under sections 234B and 234C of the Income Tax Act.
3. Credit of advance tax and self-assessment tax paid by the assessee.
4. Consequential nature of interest issues under sections 234B and 234C.

Detailed Analysis:
1. The appellant challenged the disallowance of Rs. 22,93,95,980 as expenditure on "Power Purchase Price" by the Commissioner of Income Tax(A). The Tribunal considered previous decisions, including one for AY 1994-95, and a subsequent decision for AY 2007-08. The subsequent decision took into account all relevant facts, including the Nair Committee's recommendations, leading to a liability not being considered as crystallized. The Tribunal decided in favor of the revenue, considering subsequent decisions and the pending matter before the Supreme Court. Hence, the disallowance was upheld, and ground no. 1 was dismissed.

2. Regarding interest under sections 234B and 234C, the Tribunal relied on the Supreme Court judgment in JCIT vs. Rolta India Ltd. It was held that interest is chargeable on the assessed or regular assessment tax amount. Following this precedent, the Tribunal dismissed the grounds related to interest charges under sections 234B and 234C.

3. The issue of credit for advance tax and self-assessment tax paid was considered a matter for the Assessing Officer to verify and allow based on tax deposit vouchers and applicable tax. The Tribunal directed the issue to be restored to the Assessing Officer for proper verification and allowance, thereby disposing of ground no. 2 accordingly.

4. The Tribunal addressed the consequential nature of interest issues under sections 234B and 234C, emphasizing the chargeability of interest based on assessed or regular assessment tax amounts. Relying on the Supreme Court judgment, the Tribunal dismissed the grounds related to interest charges under sections 234B and 234C.

In conclusion, the appeal was partly allowed, with the Tribunal upholding the disallowance of the expenditure on "Power Purchase Price" while directing the issue of credit for advance tax and self-assessment tax to be verified and allowed by the Assessing Officer. The interest charges under sections 234B and 234C were also upheld based on the Supreme Court judgment.

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