Srinath Metals Pvt. Ltd., Kolkata V. ITO, Ward - 3(2), Kolkata, Kolkata

ITA 1986/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7590 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 06-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

ITA NO. 1986/KOL/2017 A.Y. 2010-2 011 SRINATH METALS P. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 1986/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. SRINATH METALS PVT. LIMITED,.................. .................................APPELLANT C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA-700 001 [PAN: AALCS 5165 Q] -VS.- INCOME TAX OFFICER,................................ .........................................RESPONDENT WARD-3(2), KOLKATA, AAYAKAR BHAWAN, 4 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI ANIL KOCHAR, A.R, FOR THE APPELLANT SHRI SANKAR HALDER, JCIT, SR. D.R , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JANUARY 07, 2019 DATE OF PRONOUNCING THE ORDER : JANUARY 18, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKATA DAT ED 31.07.2017 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE OF RS.58,41,183/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF ELECTRICITY CHARGES. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF BILLETS. IT ALSO D ERIVED INCOME FROM LEASE RENT. THE RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION WAS FILED BY THE ASSESSEE ON 01.10.2010 DECLARING TOTAL INCOME O F NIL. IN THE PROFIT & ITA NO. 1986/KOL/2017 A.Y. 2010-2 011 SRINATH METALS P. LIMITED 2 LOSS ACCOUNT FILED ALONG WITH THE SAID RETURN, ELEC TRICITY CHARGES OF RS.5,86,93,861/- WERE DEBITED BY THE ASSESSEE. ON V ERIFICATION OF THE SAID EXPENSES, IT WAS NOTICED BY THE ASSESSING OFFICER D URING THE COURSE OF ASSESSMENT PROCEEDINGS THAT ITS FACTORY WAS GIVEN B Y THE ASSESSEE- COMPANY ON LEASE WITH EFFECT FROM 14.10.2009 AND TH E ELECTRICITY BILL FOR THE MONTH OF OCTOBER AMOUNTING TO RS.1,41,42,657/- WAS CLAIMED PARTLY AS EXPENSES TO THE EXTENT OF RS.1,17,71,975/-. ACCO RDING TO THE ASSESSING OFFICER, PROPORTIONATE ELECTRICITY EXPENSES WHICH T HE ASSESSEE SHOULD HAVE CLAIMED FOR THE MONTH OF OCTOBER KEEPING IN VI EW THAT THE FACTORY WAS GIVEN ON LEASE WITH EFFECT FROM 14.10.2009 WAS RS.59,30,791/-. SINCE THE ASSESSEE HAD CLAIMED SUCH EXPENSES AT RS.1,17,7 1,975/-, HE DISALLOWED THE BALANCE AMOUNT OF RS.58,41,183/- IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 21.03.2013. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID DIS ALLOWANCE MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE LD . CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE RELEVANT BILL FOR ELECTRICITY CH ARGES RELATING TO THE MONTH OF OCTOBER, 2009 AMOUNTING TO RS.1,41,42,657/ - WAS FOR THE PERIOD FROM 29.09.2009 TO 21.10.2009. HE HAS SUBMITTED THA T SINCE THE FACTORY WAS GIVEN BY THE ASSESSEE ON LEASE WITH EFFECT FROM 14.10.2009, THE ELECTRICITY CHARGES FOR 23 DAYS WERE RELATED TO THE ASSESSEE WHILE ONLY REMAINING SEVEN DAYS WERE RELATED TO THE LESSEE. HE ACCORDINGLY WORKED OUT THE PROPORTIONATE ELECTRICITY CHARGES PERTAININ G TO THE ASSESSEE ON PROPORTIONATE BASIS AT RS.1,08,42,704/- AND SUBMITT ED THAT THE CLAIM OF THE ASSESSEE FOR ELECTRICITY CHARGES TO THAT EXTENT SHOULD REASONABLY BE ALLOWED. THE LD. D.R., ON THE OTHER HAND, HAS CONTE NDED THAT THIS CLAIM MADE ON BEHALF OF THE ASSESSEE FOR THE FIRST TIME B EFORE THE TRIBUNAL REQUIRES VERIFICATION BY THE ASSESSING OFFICER. WE FIND MERIT IN THE CONTENTION OF THE LD. D.R. AND SINCE THE LD. COUNSE L FOR THE ASSESSEE ALSO ITA NO. 1986/KOL/2017 A.Y. 2010-2 011 SRINATH METALS P. LIMITED 3 HAS NOT RAISED ANY OBJECTION IN THIS REGARD, WE RES TORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFYING THE NEW CLAIM MADE ON BEHALF OF THE ASSESSEE BEFORE THE TRIBUNAL AND DECIDE THE CLA IM OF ELECTRICITY EXPENSES ALLOWABLE TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 18 TH , 2019. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 18 TH DAY OF JANUARY, 2019 COPIES TO : (1) M/S. SRINATH METALS PVT. LIMITED, C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA-700 001 (2) INCOME TAX OFFICER, WARD-3(2), KOLKATA, AAYAKAR BHAWAN, 4 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKAT A, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.