February 2023
Business expenditure — Deduction only on actual payment — Electricity duty — Assessee, a licensee following mercantile system of accounting — Merely an agency to collect electricity duty from consumers and to pay it to State Government — Provisions of section 43B not applicable
By K. B. Bhujle, Advocate
73 Principal CIT vs. Dakshin Haryana Bijli Vitran Nigam Ltd
[2022] 449 ITR 605 (P&H)
A. Y.: 2008-09
Date of order: 3rd August, 2022
Section: 43B of ITA 1961
Business expenditure — Deduction only on actual payment — Electricity duty — Assessee, a licensee following mercantile system of accounting — Merely an agency to collect electricity duty from consumers and to pay it to State Government — Provisions of section 43B not applicable
The assessee was a licensee under the Electricity Act, 2003 and distributed power in the State of Haryana. For the A. Y. 2008-09, the AO made a disallowance with respect to the electricity duty under section 43B of the 1961 Act.
The Commissioner (Appeals) and the Tribunal deleted the disallowance.
On appeals by the Revenue, the Punjab & Haryana High Court upheld the decision of the Tribunal and held as under:
“i) Under section 43B(a) of the Income-tax Act, 1961 a deduction otherwise allowable under the Act in respect of any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred
