Gujarat State Electricity Corporation Ltd. Vs DCIT (ITAT Ahmedabad)
PF Delay Partly Disallowed, MAT Issue Remanded & Flood-Loss Allowed: Ahmedabad ITAT Decides Cross Appeals in Gujarat State Electricity Corporation
Ahmedabad ITAT, Bench ‘D’, in cross appeals Gujarat State Electricity Corporation Ltd. Vs DCIT (ITA Nos.1596 & 1653/Ahd/2024; AY 2006-07; order dated 18-12-2025), partly allowed the assessee’s appeal for statistical purposes and dismissed the Revenue’s appeal.
On employees’ contribution to PF, the Tribunal upheld the CIT(A)’s finding that ₹76,114 relating to delayed deposits for certain months was rightly disallowed in view of Supreme Court ruling in Checkmate Services Pvt. Ltd., while confirming deletion of the balance ₹36.55 lakh, holding that the June 2005 contribution was deposited within the statutory due date. Thus, both the assessee’s and Revenue’s grounds on PF were dismissed.
On enhancement of book profit u/s 115JB (₹88.90 crore), the Tribunal noted that the earlier ITAT had specifically directed verification whether the amount withdrawn from reserves was credited to the P&L account and included in net profit. As the assessee contended that the amount had already been offered, the Tribunal remanded the MAT issue to the AO for fresh verification, strictly in accordance with section 115JB. The assessee’s ground was allowed for statistical purposes.
Regarding unabsorbed business losses and depreciation, the Tribunal upheld the CIT(A)’s direction to the AO to verify and allow eligible brought-forward losses and depreciation, including pre-demerger amounts, holding that no prejudice was caused to the assessee.
On the Revenue’s appeal relating to extraordinary losses of ₹3.53 crore (loss due to flood, cyclone, fire, etc.), the Tribunal affirmed the deletion by the CIT(A), observing that the assessee had furnished requisite details earlier and that the AO failed to grant reasonable opportunity as directed in the first round of litigation.
Accordingly, the assessee’s appeal was partly allowed for statistical purposes, while the Revenue’s appeal was dismissed in toto, reinforcing that Checkmate governs PF delays, MAT adjustments require strict factual verification, and genuine extraordinary losses cannot be disallowed mechanically
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
