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TMI Blog2020 (4) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... d in generation, distribution and supply of electricity. The provision was also considered by the AO but without dealing with the same, he held the said subscription to be of capital nature and/or by way of donation - expenses/grant-in-aid was in conformity with Section 24 of the Electricity Act, as stated above which required the assessee to subscribe to the associations constituted for the purpose conducive to development of electricity. Thus expenditure in question was to be allowed u/s 37(1) as the same was incurred in ordinary course of the business of the assessee and as a part of obligation to its consumers to develop electricity - contribution was made as per the order of the Government of India and it was wholly, necessarily and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Shukla, Judge For the Appellant : Shri Sanjay Lal, Advocate For the Respondent : Shri A.P. Shrivastava, Advocate JUDGMENT (Oral) PER: AJAY KUMAR MITTAL, CHIEF JUSTICE: The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 (for short the Act ) against the order dated 22.09.2006 passed by the Income Tax Appellate Tribunal, Jabalpur (for brevity the Tribunal ) in I.T.A.No.69/Jab/2005. The assessment year involved is 1994-95. 2. This appeal was admitted on 09.03.2007 for determination of the following substantial questions of law:- (i) Whether assessee is entitled for deduction of ₹ 1.50 Crores on account of contribution to National H.V..D.C. Project under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore learned Tribunal, which was dismissed vide impugned order dated 22.09.2006 (Annexure A-3). Hence, the present appeal. 4. Learned counsel for the Revenue submitted that the contribution to National HVDC Project would not fall within the ambit of Section 37(1) of the Act as it was capital in nature and not incurred in connection with day to day running of the business and therefore, the CIT(A) and the learned Tribunal have committed an error in deleting the addition of ₹ 1.50 Crore on account of contribution to the said fund. It was then submitted that further deletion of addition of an amount of ₹ 24,25,05,585/- accepted by the CIT(A) and the Tribunal is per se illegal inasmuch as the said amount was collected by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invested with the assessee and carries interest as per rules. He invited our attention to Clause 11 of the PF Regulations, which have been taken note of by the learned Tribunal in ITA No.79 to 81/Jab/2013 (Asst. Commissioner of Income Tax 2(1) Jabalpur v. M.P. Electricity Board) while dismissing the appeal of the Revenue by order dated 06.07.2015 in identical facts and circumstances, which reads as under:- All money contributed to the fund by the Board or by a subscriber or accruing by way of interest or otherwise to such fund shall remain invested with the Board or in such securities as the Trustees may from time to time decide. If the amount is left with and merged in the fund of the Board, the Board shall credit the fund with interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable under the head profits and gains of business or profession . On the basis of the internal note submitted by the assessee, the Assessing Officer having noted in the order that the said project was evolved to develop indigenous technology in the country and various departments of Government of India had extended grant-in-aid to the said project and so as the assessee department and the Chairman, APSEB were committed to contribute ₹ 15 Crore each, we find that there was material before the Assessing Officer to adjudge the admissibility of the said deduction in favour of the assessee particularly when the said step taken by the assessee was in accordance with Section 24 of the Electricity (Supply) Act, 1948 (in short the Elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y material brought on record by the revenue against the finding of the Ld. CIT(A) and keeping in view that the above amount was paid to an organization approved by Government of India vide order of releasing of funds appearing at pages 1- 3 of the assessee s paper book, we are inclined to uphold the finding of the Ld. CIT(A) in deleting the addition of ₹ 1.50 Crore and accordingly, the ground taken by the revenue is rejected. 8. Before adverting to the second question with regard to allowing the deletion of addition of ₹ 24,25,05,585/- of provident fund which was not paid on due date under Section 36(1)(va) of the Act, it would be apposite to refer to the relevant statutory provision which reads, thus:- Other deductions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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