PR. COMMISSIONER OF INCOME TAX Vs. NORTH EASTERN ELECTRIC POWER CORPORATION LTD

JUDGEMENT

(1.) This Income Tax Appeal has been filed by the Department, challenging the order dtd. 12/12/2022 passed by the Income Tax Appellate Tribunal, Kolkata-Guwahati 'e-Court', Kolkata in I.T.A. No. 45/(Gau)/2019 and in I.T.A.No.418/(Gau)/2019 for the assessment year 2014-2015, in and by which, while I.T.A.No.418/(Gau)/2019 was allowed, the other one, namely, I.T.A.No.45/(Gau)/2019 was dismissed as infructuous.

(2.) For the sake of brevity, the parties would be referred as 'the Department' and 'the Company'.

(3.) The case put forth by the Company before the Income Tax Appellate Tribunal was that it was established in the year 1976, which is operating a largest hydro power plant in North Eastern Region. The Principal Commissioner of Income Tax, Shillong observed that Mercantile System had been followed by the Company, as per which, transactions are recorded, when they arise and the incomes are recorded in the books of the accounts, when it is earned, irrespective of the fact that it is received or accrued and therefore, Hybrid System of accounting, which is a mixture of Cash Basis and the Accrual Basis of Accounting, cannot be adopted by the Company as per the provisions of Sec. 145(1) of the Income Tax Act, 1961 (in short 'the Act, 1961').