Bangalore Electricity Supply Company Ltd. vs. The Assistant Commissioner of Income Tax

Parties Involved

Facts Summary

The assessee, Bangalore Electricity Supply Company Ltd., is a company incorporated on 30.04.2002 under a scheme framed by the Karnataka Government for electricity distribution. The company took over assets and liabilities on 01.06.2002 for electricity distribution in eight districts. The assessee filed its return of income on 30.10.2017, reporting a loss under normal computation and a book profit under section 115JB of the Income Tax Act, 1961. This return was revised on 26.03.2018 to report a higher loss and a book loss. The return was scrutinized, and a show cause notice was issued on 09.12.2019. The assessing officer made several additions to the assessee's income based on various issues. The assessee appealed against these additions before the Commissioner of Income Tax (Appeals), who partly allowed the appeal. Both parties are now before the Tribunal challenging the appellate order.…

Legal Issues

• 1. Disallowance of 20% of contract and travel expenditure amounting to Rs. 32.19 crores.
• 2. Addition of 5% of sundry creditors amounting to Rs. 225.07 crores as cessation of liability.
• 3. Disallowance of provision amounting to Rs. 86.66 crores.
• 4. Computation of book profit under section 115JB of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• M/s Topgrain Corporate Service Pvt. Ltd. vs. ITO, Ward-4(1), Kolkata

• Shapoorji Pallaonji And Company Pvt. Ltd. vs. DCIT(CC)-8(3)

• Trent Limited vs DCIT-2(3)(1), Mumbai

• Excelsoft Technologies Ltd. vs. The Deputy Commissioner of Income Tax

  C BENCH: BANGALORE benchAY 2020-21Allowed

• ITA No. 4754/Mum/2025

  Mumbai Bench benchAY 2016-17Partly Allowed

• DCIT, Circle 16 (1) vs MD Equipment Pvt. Ltd.

  Delhi Bench benchAY 2023-24Dismissed