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TMI Blog2022 (11) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... number of consumers and it is difficult to collect data of each and every consumer (20 lakh) which are maintained manually in the registers at each of the locations of the company and also the average interest amount is not exceeding Rs. 84/-, necessary efforts have already been made by the assessee company filing complete details of the consumers to which interest was paid above the prescribed limit and due tax deducted at source, restoring the issue to the ld. AO for again calling for the records of each and every consumer and then find out the correct amount eligible for deduction of tax at source will unnecessarily stretch the long drawn proceedings which pertains to AY 2012-13 and even after carrying out such exercises it is not certain that the necessary results would be obtained. Disallowance u/s. 40(a)(ia) of the Act is not called for on the alleged amount as the assessee has filed the details which it could possibly gather and the Revenue authorities have no material with them to make the disallowance except for non-filing of details by the assessee and ignoring the fact that average interest is merely Rs. 84/- per consumer and there will be large number of cases where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of filing return of income, disallowance of interest paid on consumer security deposit of Rs. 16.62 Cr for non-deduction of tax at source, thus, calling for disallowance u/s. 40(a)(ia) of the Act. 4. When the additions were challenged by the assessee before ld. CIT(A), it partly succeeded as ld. CIT(A) deleted the disallowance made u/s. 43B of the Act but as regards the disallowance u/s. 40(a)(ia) of the Act for non-deduction of tax at source, the assessee failed to get any relief from ld. CIT(A) even though the assessee claimed that out of all the alleged sum of Rs. 16.62 Cr. only a sum of Rs. 48,60,850/- was subject to deduction of tax at source being the amount exceeding the prescribed limit. 5. Aggrieved, the Revenue is now in appeal before this Tribunal challenging the finding of ld. CIT(A) deleting the disallowance u/s. 43B of the Act at Rs. 44 Cr. and the assessee has raised Cross Objection challenging the disallowance u/s. 40(a)(ia) of the Act at Rs. 16.62 Cr and also supporting the finding of ld. CIT(A) deleting the disallowance u/s. 43B of the Act at Rs. 44 Cr. on account of outstanding electricity duty payable to State Govt. 6. We first take up the Revenue' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y adjusted 29,45,70,459 Total Electricity Duty Payable as per audited accounts (**) 43,99,81,071 (**) (Electricity Duty collected during the year adjusted and transferred to Pension Trust as per GOA notification) Be that as it may, I have not found any adverse comments of the CAG in this behalf. In item 2.8 of the Notes on Account of the 9th Annual Report and Accounts 2011-12 it is evident that the opening liability was Rs. 3901 lakh, which conforms to the figure furnished by the appellant to the AO in his workings. The amount that became payable during the year was Rs. 34,44,06,102/- and amount that was adjusted against it was Rs. 29,45,70,459/-. No amount in respect of Electricity Duty was reflected in the details of incomes and the expenses of the Profit and Loss Account Statement incorporated in the aforesaid Annual Accounts in the Schedules 2.18, 2.19, 2.20, 2.21 and 2.29 in the Profit and Loss Account Statement. Therefore, it follows that neither the amount of Rs. 44,00,00,000/- nor the figure of Rs. 34,44,06,102/- were claimed as expenses on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture was to impose primary and absolute liability for electricity duty on the licensee, the proviso to Section 5(1) of the Act would not have been there. The said proviso exempts the licensee from paying any duty in respect of any energy supplied by the licensee for which it has been unable to recover its dues. In our view, the first charge created by Section 5(1) of the Act on the amount recoverable by the licensee for the energy supplied by him in respect of duty payable to the Government, is to induce the licensee to make every effort to recover the electricity duty from the consumers for payment to the Government. If the licensee recovers only the price of energy supplied from the consumers but not the electricity duty, then a secondary liability arises on the part of the licensee to make payment of the duty to the Government. However, if the licensee is unable to recover the energy charges as well as the electricity duty, there is no liability on the part of the licensee to pay any duty to the Government. The electricity duty, not being a sum payable by the assessee as a primary liability by way of tax, duty, cess or fee, Section 43B is not attracted to the licensee/asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on to the State Govt. and the said amount is not claimed as an expenditure in the profit and loss account. We, therefore, fail to find any infirmity in the finding of the ld. CIT(A) and, therefore, dismiss ground nos. 1, 2 3 raised by the Revenue. 9. Now, we take up the Cross Objection filed by the assessee. As far as ground no. 2 is concerned, the same has been filed by the assessee in support of the finding of ld. CIT(A) deleting the disallowance of Rs. 44 Cr. made u/s. 43B of the Act on account of outstanding electricity duty payable to the State Govt. Since we have already adjudicated this ground in the Revenue's appeal and confirmed the finding of ld. CIT(A), this ground no. 2 raised in the Cross Objection becomes infructuous. 10. As regards ground No. 1 is concerned the same relates to disallowance of 16.62 Cr. on account of non-deduction of tax at source on the interest paid to consumers on security deposit. 11. Brief facts relating to the issue are that the assessee company claimed expenditure of Rs. 16.62 Cr. on account of interest paid to the consumers on the security deposits held by it. During the assessment proceedings, ld. AO called for the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(a)(ia) of the Act if tax deductible on such interest payment is not deducted by the assessee. Before the ld. AO such details could not be filed and this resulted in the said the disallowance. Before the ld. CIT(A) the assessee filed certain details showing that out of the said the disallowance a sum of Rs. 48,60,850/- was eligible for deduction of tax at source and a list showing such details of the consumers' names and PAN and the amount of interest paid was filed and it was also stated that TDS of Rs. 48,60,850/- has been deposited on 03.11.2014 but still the assessee failed to convince the ld. CIT(A). 15. On perusal of the submissions before the lower authorities and as contended by the ld. Counsel for the assessee, the assessee company being a State-owned company and having large consumer base, of around 20 lakh customers and interest on security deposits has been paid to them. If the alleged sum of interest of Rs. 16.62 Cr. is divided by the number of consumers i.e. 20 lakh, the interest payment per consumer would be only around Rs. 84/-. It is also not in dispute that the assessee company was not maintaining the details of consumer deposits on a computer system and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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