TaxTMI 
TaxTMI 
2011 (1) TMI 1405
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....that the assessee is entitled for the rate Rs. 3.48 per unit for the Financial Year 2004-05, as per PPA entered with APTRANSCO. The assessee accordingly raised sale bills adopting Rs. 3.48 per unit." 3. Facts of the case in brief are that the assessee is a company engaged in generation of power. During the accounting year relevant to assessment year 2005-06, assessee sold 3,57,70,400/- units of power to APTRANSCO, and raised invoice applying a rate of Rs. 3.48 per unit, which amounted to Rs. 12,44,80,992/-. In the books of account, however, the assessee accounted for sales only at Rs. 3.18 per unit which amounted to Rs. 11,37,49,872/-. Explaining the difference of Rs. 1,07,31,120/-, it was submitted before the Assessing Officer that the a....
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.... raised bills at the rate of Rs. 3.48 per unit during the relevant financial year. The Assessing Officer observing that the bills raised by the assessee at Rs. 3.48 per unit were the fundamental records for maintenance of accounts of the assessee, though the assessee has recorded the sales differently for its reasons, deviating from the generally accepted method of accounting. He was of the view that the assessee should have declared the sale of power as per the invoice raised in view of S.5 of the Act and declared the same worked out at Rs. 3.48/- per unit for tax purposes, since income computed at that rate is deemed to have accrued to the assessee on the day of raising of invoice. For these reasons, and finding no merit in the contention....
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...., the assessee cannot go back and contend that what is its income is only the one computed adopting a rate of Rs. 3.18/- per unit, i.e. the rate at which the APTRANSCO settled its bills. He submitted that invoices raised for the sales made constitute the fundamental records for the maintenance of accounts, and in view of the provisions of Section 5 of the Act, the differential amount which the assessee actually did not receive, on account of pending litigation, has to be treated as having accrued to the assessee, and as such, has to be assessed as deemed income. She also filed detailed written submissions by distinguishing the decisions relied on by the learned counsel for the assessee and concluded that mere absence of the amount in the pr....
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....e amount and receipt of the amount depends on the outcome of the litigation. In support of this proposition, he placed reliance on the following decisions- (a) CIT V/s. Hindusthan Housing and Land Development trust Ltd. (1986) 161 ITR 524(SC) (b) CUT V/s. Nandlal Mohanlal (2010) 191 Taxman 152 Placing reliance on the decision of the Allahabad High Court in the case of CIT V/s. Govind Prasad (171 ITR 417), he submitted that where an assessee acquires right to receive income, then only income can be said to accrue though it is received later. He also placed reliance on the decision of the Hon'ble Supreme Court in the case of E.D.Sassoon & Co. V/s. CIT(26 ITR 27) and submitted that income can be said to accrue when enforceable debt is cre....
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....r the differential amount of sales , viz. worked out at Rs. 3.48/- per unit as per the Power Purchase Agreement applying which invoices for supply of power to APTRANSCO were raised and Rs. 3.18/- applying which in terms of the interim orders of the Hon'ble A.P. High Court, invoices of the assessee were settled by the APTRANSCO and accounted for by the assessee in the books of account, can be treated as the income of the assessee for the assessment year 2005-06. We find that the CIT(A) has given elaborate reasoning before concluding that the income worked at the rate of Rs. 3.48/- per unit of power supplied had neither accrued to the assessee nor was receivable during the previous year and therefore, no corresponding debt in respect of the d....