D.A.MEHTA, J. - (1.) THE Tribunal, Ahmedabad Bench 'B' has referred the following question for the opinion of this Court under s. 256(1) of the IT Act, 1961 (the 'Act') at the instance of the CIT : "Whether on the facts and in the circumstances of the case the Tribunal is right in holding that the liabilities on electricity duty tax payable to Government amounting to Rs. 49,65,181 on sale of electricity cannot be considered as inadmissible item under s. 43B of the IT Act and the same is outside the purview of adjustment under s. 143(1)(a) of the IT Act -
(2.) FOR asst. yr. 1991 -92 the relevant accounting period is financial year 1990 -91. The return of income was filed on 31st 143(1)(a) of the Act in relation to various items disallowable under s. 43B of the Act, one of them being Rs. 41,65,12,181, being the amount of electricity duty payable to the State Government by the assessee on sale of electric Under Secretary to the Government of India, Energy and Petrochemicals Department to contend that the electricity duty payable had been adjusted against other amounts receivable from the Government and hence, the adjustment made under s. 143(1)(a) of the Act and levy of additional tax under s. 143(1A) of the Act was not warranted. The AO negatived the claim made by the assessee holding that there was no proof of such adjustment having been made within the stipulated period. The assessee carried the matter in appeal before CIT(A) but did not succeed.
(3.) IN second appeal before the Tribunal the assessee contended that the issue was squarely concluded in favour of the ITA No. 378/Ahd/1988 for asst. yr. 1984 -85 [reported at (1988) 32 TTJ (Ahd) 151 - -Ed.]. The Tribunal accepted the submissions of the assessee in the following terms : "4.1 In our view the sum of Rs. 49,65,12,181 cannot be considered as an inadmissible item of expenditure and is outside the purview of s. 143(1)(a) of the Act and the AO was not justified in making the adjustment of the said sum to the loss declared. We are holding so on the basis of the order passed by this Tribunal in the case of Ahmedabad Electricity Co. Ltd. (supra) and direct the AO to delete adjusted amount of Rs. 49,65,12,181." Mr. B.B. Naik, learned standing counsel for applicant Revenue submitted that the decision of the Tribunal in case of Ahmedabad Electricity Co. Ltd. (supra) has since been reversed by this Court in the case of CIT vs. Ahmedabad Electricity Co. Ltd. (2003) 181 CTR (Guj) 222 : (2003) 262 ITR 97 (Guj) and it has been held by the High Court that provisions of s. 43B of the Act are applicable to the duty payable to the Government.;