M/s. Hindustan Ice & Cold Storage, New Delhi V. ITO, New Delhi

ITA 5580/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0029 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-04-2015
• Assessment Year: 1992-1993
• Appeal Filed On: 15-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: R K PURI SELF
• Section: 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI I.R. RAO, ACCOUNTANT MEMBER ITA NO: 5580/DEL/2014 ASSTT. YEAR : - 1992-93 HINDUSTAN ICE & COLD STORAGE VS. ITO C 25, LAWRANCE ROAD, WARD- 25(2) INDL. AREA NEW DELHI. NEW DELHI 110 035 (PAN AAFH3440H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K. PURI (SELF) RESPONDENT BY :SHRI VIKRAM SAHAY, SR. DR DATE OF HEARING :7.4.2015 DATE OF PRONOUNCEMENT : 6. 5.2015 O R D E R PER G.C. GUPTA, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE FOR THE ASSE SSMENT YEAR 1992-93 IS DIRECTED AGAINST THE ORDER OF CIT(A). THE GROUND OF THE APP EAL OF THE ASSESSEE IS AS UNDER :- 1. THE LD. CIT(A) HAS ERRED BOTH IN FACTS AND LAW IN NOT ALLOWING THE DEDUCTION OF ADDITIONAL CLAIM OF THE ASSESSEE OF RS . 469489/- ON ACCOUNT OF MISUSE CHARGES UNDER THE HEAD ELECTRICITY EXPENSES AS ALLOWABLE UNDER LAW AND I.T. RULES, U/S 37(1) BEING THE BUSINESS EXPEND ITURE INSPITE OF THE FACT THAT THE HONBLE ITAT VIDE ITS ORDER DATED 18.6.200 3 IN APPEAL NO. 236 & 1072 / DEL OF 1998, A.Y. 1992-93 IN THE CASE OF THE ASSESSES FIRM M/S. HINDUSTAN ICE & COLD STORAGE VERSUS AO WARD NO. 25( 2) NEW DELHI. IT IS MADE CLEAR THAT THE AO SHALL ADJUDICATE THE L ARGER CLAIM OF THE ASSESSEE BECAUSE IF THERE IS A LIABILITY ARISING OUT OF BUSI NESS TRANSACTION IT HAS TO BE ALLOWED IRRESPECTIVE OF THE ENTRIES MADE BY THE ASS ESSEE IN THE BOOKS OF ACCOUNTS. ITA NO. 5580/DEL/2014 HINDUSTAN ICE & COLD STORAGE VS. ITO 2 2. THE LD. REPRESENTATIVE OF THE ASSESSEE SUB MITTED THAT THE TRIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF THE AO AND THE AO HAS AGAIN MADE THE ADDITION WITHOUT ANY BASIS. HE SUBMITTED THAT THE ELECTRICIT Y EXPENSES CLAIMED WAS ALLOWABLE FOR BUSINESS PURPOSES ONLY AND WAS NOT FOR ANY INFR INGEMENT OF ANY LAW AND WAS NOT IN THE NATURE OF PENALTY LEVIED ON THE ASSESEE. HE SUBMITTED THAT THE ASSESSEE IS ENTITLED TO DEDUCTION IN ACCORDANCE WITH MERCANTILE SYSTEM OF ACCOUNTING AND THE EXPENSES WERE ALLOWABLE U/S 37(1) OF THE ACT. LD. D R HAS OPPOSED THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. HE REFERRED TO TH E RELEVANT PORTION OF THE ORDER OF THE AO AND CIT(A) IN SUPPORT OF THE CASE OF THE REV ENUE. HE SUBMITTED THAT IN THE FIRST ROUND OF LITIGATION THE TRIBUNAL HAS NOT DEC IDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND HAS GIVEN CERTAIN DIRECTION AND AO HAS COMPLIED WITH THE SAME AND MADE THE IMPUGNED ADDITION. HE RELIED ON THE ORDER OF THE AO AND THE CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS A ND HAVE PERUSED THE ORDER OF THE CIT(A). WE FIND THAT THERE IS NO MATERIAL BROUGHT O N RECORD ON BEHALF OF THE REVENUE TO SUGGEST THAT THE ELECTRICITY CHARGES IN DISPUTE WERE FOR ANY INFRINGEMENT OF LAW. IT IS A CASE OF ADDITIONAL ELECTRICITY CHARGES LEVI ED BY THE DELHI ELECTRIC SUPPLY UNION (DESU) ON ACCOUNT OF EXCESS USE OF ELECTRICITY, LOA D VIOLATION AND MISUSE CHARGES. IT SEEMS TO BE A CASE OF SURCHARGE CHARGES IN THE BIL LS PAYABLE BY THE CONSUMERS AND IS MERELY COMPENSATORY IN NATURE. THE EXPENDITURE W AS INCURRED FOR BUSINESS PURPOSES AND THEREFORE ALLOWABLE U/S 37 OF THE ACT. THE ASSESEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING REGULARLY YEAR AFTE R YEAR AND THE EXPENDITURE WERE BOOKED IN THE RELEVANT YEAR AS PER THE PRINCIPLES O F MERCANTILE SYSTEM OF ACCOUNTING ITA NO. 5580/DEL/2014 HINDUSTAN ICE & COLD STORAGE VS. ITO 3 BY THE ASSESSEE. IN THESE FACTS OF THE CASE WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSE WAS JUSTIFIED AND ACCORDINGLY THE GROUND OF THE APPEAL IS ALLOWED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- (I.R. RAO) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDE NT DATED: THE 6 TH MAY, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 7.4.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 9.4.20 15 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER