Ita/145/2008 Of The Commissioner Of Income-Tax, Tvm v. Kerala State Electricity Board, Tvm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID THURSDAY, THE 27TH NOVEMBER 2008 / 6TH AGRAHAYANA 1930 ITA.No. 145 of 2008() --------------------- ITA.271/COCH/2000 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT:- ----------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT(S)/RESPONDENT: --------------- KERALA STATE ELECTRICITY BOARD, THIRUVANANTHAPURAM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 27/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. RAMACHANDRAN NAIR & HARUN-UL-RASHID, JJ. --------------------------------------------------------- I.T. APPEAL NO. 145 OF 2008 --------------------------------------------------------- Dated this the 27th day of November, 2008 JUDGMENT Ramachandran Nair, J. The respondent-assessee is the Kerala State Electricity Board, astatutory body basically under the Government and engaged in thegeneration and distribution of electricity in the State. 2. The first issue pertains to disallowance made under Section 37(4)(ii) of the Income Tax Act regarding expenses for maintenance of guesthouses. In first appeal, Commissioner of Income Tax (Appeals) modifiedthe order which is confirmed by the Tribunal in second appeal. Inprinciple, we find that the Tribunal has confirmed the disallowance. Sofar as quantum of disallowance is concerned, we do not find anysubstantial question of law arising out of the order of the Tribunal. 3. The next question which appears to be important relates toaddition of electricity duty collected from customers by the K.S.E.B. andretained by it without remitting the amount to the Government.Disallowance made under Section 43 B was reversed by theCommissioner of Income Tax (Appeals) on the ground that the assesseehas not taken the collection as its income in the profit and loss account, buthas shown the same in the balance sheet to be adjusted againstGovernment loans. Even though Standing Counsel for the K.S.E.B. hasproduced before us the grounds of appeal which shows that this was takenas a ground of appeal, it is neither seen argued nor decided by theTribunal. Therefore, obviously, no appeal on this issue will lie to theHigh Court under Section 260 A of the Income Tax Act. It is not knownwhether this ground of appeal was given up at the stage of argument orwhether the Tribunal left out the issue. In any case, if there is omission onthe part of the Tribunal, it is for the department to bring it to the notice ofthe Tribunal in a proceedings for rectification. However, having regard tothe nature of the issue and the peculiar relation between the Governmentand its agency, we do not know whether the department should pursue thematter because the assessee in this case is not an ordinary business concernbut a statutory agency and its collection of duty for the Government is notlike collection of tax or duty and retention of the same by any other assessees. Appeal is, therefore, dismissed with the above observation. (C.N. RAMACHANDRAN NAIR) JUDGE (HARUN-UL-RASHID) JUDGE sp/ C.N. RAMACHANDRAN NAIR & HAURN-UL-RASHID, JJ. I.T.A.NO. 145/2008JUDGMENT 27th November, 2008