Gridcorp gets Rs 158 crore income tax relief

India's Income Tax Appellate Tribunal struck down an order for collection of Rs 158 from Grid Corporation of Orissa  for the amount paid to Orissa Power for power transmission charges during 2008-09.

“Gridco has not availed any services from the Orissa Power Transmission Corporation Ltd and it is a merely debit and credit entry without any claim of expenditure,” the ITAT order said.

The appellate authority maintained that the Rs 367 crore paid by Gridco to OPTCL during 2008-09 for transmission charges were collected from four power distribution companies as there was no direct payment mechanism established between the discoms and OPTCL at that point of time.

“The IATA order is a reprieve for us since we are a loss making company. Further, the order limits the scope for Income Tax department which might have pointed out similar type of payments made in 2009-10 and 2010-11,” said B P Mahapatra, director of finance of Gridco.

From 2011-12, the discoms are paying power transmission charges to OPTCL directly. Similarly, the tribunal also rejected the tax department’s consideration of Rs 145.4 crore payment made to Power Grid Corporation of India Ltd  by Gridco as rent, saying power transmission does not come under the purview of rent or sub-lease.