SRINATH METALS PVT. LTD.,,KOLKATA vs. ITO, WARD - 3(2), KOLKATA, KOLKATA

The assessee in the present case is a company, which is engaged in the business of manufacturing of billets. It also derived income from lease rent. The return of income for the year under consideration was filed by the assessee on 01.10.2010 declaring total income of NIL. In the profit & loss account filed along with the said return, electricity charges of Rs.5,86,93,861/- were debited by the assessee. On verification of the said expenses, it was noticed by the Assessing Officer during the course of assessment proceedings that its factory was given by the assessee- company on lease with effect from 14.10.2009 and the 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/-. According to the Assessing Officer, proportionate electricity expenses which the assessee should have claimed for the month of October keeping in view 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.1,17,71,975/-, 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 disallowance made by the Assessing Officer. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel for the assessee has submitted that the relevant bill for electricity charges 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 that 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 pertaining to the assessee on proportionate basis at Rs.1,08,42,704/- and submitted 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 contended that this claim made on behalf of the assessee for the first time before the Tribunal requires verification by the Assessing Officer. We find merit in the contention of the ld. D.R. and since the ld. Counsel for the assessee also has not raised any objection in this regard, we restore 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 claim of electricity expenses allowable to the assessee.

In the result, the appeal of the assessee is treated as partly allowed for statistical purposes. Order pronounced in the open Court on January 18th, 2019.