Whether Sec 43B is applicable to electricity duty to be paid by the assessee as an agent?

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Whether Sec 43B is applicable to electricity duty to be paid by the assessee as an agent?

 

Case:

  1. The Assessee is a licensee under the Electricity Act, 2003 and was engaged in the State of Punjab & Haryana for distribution of power, electricity & collection of electricity duty from consumers for passing to the credit of State Government.
  1. The question is whether Section 43B of the Income Tax Act is applicable on Electricity Duty payable by the Licensee Assessee, when the assessee merely acts as the agent of the State Electricity Board as per the terms of the license for distribution?

Note: Sec 43 deals with various statutory payments and directs that taxpayers can claim the same as an expense in the same assessing year when it was actually paid.

Reply:

This case was before the Punjab and Haryana HC (146 taxmann.com 14) Principal Commissioner of Income-tax V Dakshin Haryana Bijli Vitran Nigam Ltd

It was held as below:

  1. Section 43B of the Income Tax Act, 1961 is a non-obstante clause & is applicable only when the tax, duty, cess or fee is payable by the assessee.
  1. In the present case the Electricity Duty is not payable by the assessee. The assessee is merely an agent of the State Electricity Board.
  1. Thus, in our view, the electricity duty, not being a sum payable by the assessee as a primary liability by way of tax, duty, cess or fee, Section 43B is not attracted to the licensee/assessee in respect of electricity duty collected by it for being passed on the State Government.

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