Revenue's appeal partly allowed: Electricity duty disallowed under sec 43B, surcharge deletion upheld.

The tribunal partly allowed the Revenue's appeal, upholding the disallowance of electricity duty under section 43B of the Income-tax Act while confirming the deletion of electricity supply surcharge. It also upheld that section 115JB did not apply to the assessee's case based on a High Court interpretation.

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Issues:
1. Deletion of disallowance under section 43B of the Income-tax Act for electricity duty and supply surcharge.
2. Applicability of section 115JB of the Income Tax Act to tax book profit.

Analysis:

Issue 1: Deletion of disallowance under section 43B
The appeal concerned the deletion of disallowance made by the Assessing Officer under section 43B of the Income-tax Act for electricity duty and supply surcharge. The Assessing Officer disallowed amounts payable to the Government as the assessee had not remitted them within the stipulated time. The Commissioner of Income-tax (Appeals) allowed the claim, citing a judgment that section 43B could not be invoked for electricity duty collected by the Electricity Board. The tribunal held that section 43B applied to electricity duty payable to the Government, justifying the disallowance of &8377; 77,53,80,000. However, the disallowance of &8377; 8,67,22,264 for electricity supply surcharge was not warranted based on the High Court's decision.

Issue 2: Applicability of section 115JB
The second issue revolved around the application of section 115JB of the Income Tax Act to tax book profit. The Assessing Officer noted that the provisions of section 115JB did not exempt companies engaged in electricity generation or distribution. However, the Commissioner of Income-tax (Appeals) found section 115JB not applicable to the assessee's case. The tribunal referred to a High Court judgment that bodies like the Electricity Board were excluded from the operation of section 115JA, and this understanding was binding on the Department. Consequently, the tribunal upheld the Commissioner's order on this issue.

In conclusion, the tribunal partly allowed the appeal filed by the Revenue, upholding the disallowance of electricity duty under section 43B while confirming the deletion of electricity supply surcharge. Additionally, it upheld the decision that section 115JB did not apply to the assessee's case based on the High Court's interpretation.

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