Public Service Co. v. Commissioner

Petitioner, a regulated electric utility, reported its income on an accrual calendar year basis and utilized the meter reading and billing cycle of accounting for sales of electricity. Sales of electricity after the last meter reading in December were not billed to customers until after the close of the calendar year. On its income tax return for that year, it deducted the expenses but did not report the income attributable to such sales. It did, however, reflect such income on its books of account and financial statements. Because of the foregoing disparity, respondent determined that income…