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TMI Blog2014 (10) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer was repeatedly requested by the assessee to go through the relevant documents explaining how UI charges were being recovered, utilisation of UI charges and investments required to be made. This interest income of ₹ 3,46,97, 166/- belongs to WBERC and not of the assessee. - Decided in favour of assessee. MAT computation - Held that:- As this interest income does not belong to the assessee. Hence, this issue has become academic and in the hands of the assessee, this income cannot be added while computing the income u/s.115JB of the Act. This issue of the Revenue's appeal is dismissed. - ITA No.1822/Kol/2012 - - - Dated:- 30-10-2014 - Shri P.K.Bansal, Accountant Member and Shri Mahavir Singh, Judicial Member Appellant Shri A.K. Das. JCIT, Sr-DR Respondent : Shri Sanjay Bhattaharya, FCA O R D E R PER Mahavir Singh, Judicial Member:- This appeal by Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-I, Kolkata in appeal No.1103/CIT(A)-/Circle-59/2011-12 dated 06-09- 2012. Assessment was framed by JCIT (OSD), CIT-1, Kolkata u/s143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') vide his o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State and Central Regulatory Commission have introduced the system whereby a penal charge is imposed on the defaulting power utility for deviating from the scheduled energy generation / withdrawal programme. This penal charge on the UI charge is levied on a graded scale depending on the extent to which the system frequency is affected by such unscheduled generation or power withdrawal. The UI charge was introduced in West Bengal by WBERC from 01-01-2008. The WBERC is authorized under the Electricity Act 2003 to frame regulations for operation of State Power Grid and the administration of the UI funds for such purpose of WBERC has framed the West Bengal Electricity Regulatory Commission (Balancing and Settlement Code) Regulation, 2008. The relevant portion of Regulation-5 reads as under:- 5. SLDC-UI FUND-WSETCL - SLDC shall open an account preferably with electronic clearing facility with the name and style of SLDC-UI FUND - WBSETCL in a nationalized/scheduled commercial bank within 27th November 2007 for the purpose of handling UI charges in pursuance to regulation 5.13 of the Tariff Regulations. Such fund will be managed in the following manner: i) Such account shall be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be transferred as per the budget to be approved by the SLDC from the Commissions. (b) The balance amount shall be distributed among the licensee in proportion to the amount of energy required by the licensee for selling the power to its consumer and licensee of the Commission. Such distributed amount shall be kept in the power purchaser fund of the concerned licensee. 5. But the AO has not accepted the contention of the assessee and added the interest income to the returned income of the assessee by observing as under:- ... The contention of the Assessee-company is considered and the facts brought on record were examined. However, the claim that this income does not form part of the income of the Assessee-company appears unacceptable. It is noted that the bank account is maintained by the State Load Despatch Centre (SLDC), but as admitted in the Assessee-company's submissions, the SLDC is merely the custodian of such an account and does not have any proprietorial rights to the funds or incidental incomes generated therefrom. As per the terms of the scheme, the deposits were made from the funds of the Assessee-company and not SLDC, and the funds do not form part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputation of book profit under the MAT provisions. Assessee is a West Bengal Govt. Enterprise (STU) regulated under section 14 of Electricity Act, 2003. The responsibility for maintaining grid discipline in the state is entrusted to State load Despatch Centre (SLDC). In order to ensure grid discipline penal charge called UI charge is levied by WBERC from 1st January, 2008. In compliance of regulation of WBERC current account in Axis Bank was maintained and PAN of the assessee was used for the operation of about account named SLDC UI Fund WBSETCL. Assessing Officer made addition of interest income on deposit maintained in the above account in the hands of the assessee company, as per 26AS Statement while the assessee contended that interest of ₹ 3,46,97,166/- did not belong to the appellant and this income belonged to WBERC as the funds utilized in form of UI charges belonged to WBERC. Subsequently, on 21.10.201 as trust under the name SLDC-UI-Funds- WBSETCL was created in accordance WBERC Regulations for collection of UI charges and income earned from investment made from said UI charges. Aggrieved, now Revenue is in appeal before us. 7. We have heard rival contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been created for the maintenance of the UI Accounts. We find that on 21-10-2011 a Trust under the name and style of 'SLDC-UI FUND-WBSETCL was created in accordance with the WBERC Regulations for the purpose of management of the Fund created through collection of UI charges and interest earned from the investment made out of the said UI Chares and the Trust does not have the ownership on the moneys lying in the Fund and for all the times to come it is the WBERC which is the owner of the Fund of the Trust. We further find that neither any asset or any income earned out of the UI account could ever be considered as any income in the hands of the assessee. The moneys lying in the UI account always belonged to the Government, viz. under the name of WBERC. It was only for the convenience in the matter of making investment in deposits of UI balances that the PAN of the assessee had been utilized. However, just because of utilization of PAN resulting in showing the TDS in Form No.26AS, could not be considered as any alleged income in the hands of the assessee. The Assessing Officer was repeatedly requested by the assessee to go through the relevant documents explaining how UI charge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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