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TMI Blog2018 (7) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A) and remit the matter back to the file of the Assessing Officer and direct the AO to decide the issue denovo by considering the details in accordance with law after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to file all the details in respect of expenditure claimed of ₹ 2, 03, 93, 529/- before the Assessing Officer. - ITA No. 26/VIZ/2015 And C.O.NO.17/VIZ/2015 - - - Dated:- 18-7-2018 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, HON BLE ACCOUNTANT MEMBER For The Assessee : Shri K. Siva Ram Kumar, CA. For The Department : Shri Deba Kumar Sonawal, CIT-DR ORDER PER V. DURGA RAO, JUDICIAL MEMBER This appeal by the Revenue and the Cross Objection by the assessee are directed against the order of Commissioner of Income Tax (Appeals), Vijayawada, dated 27/10/2014 for the Assessment Year 2011-12. Since, the facts are identical and issues are common, they are clubbed, heard together and disposed of by way of this common order for the sake of convenience. ITA No. 26/VIZ/2015 2. Facts of the case, in brief, are that the assessee-company engaged in the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and Fuel ₹ 3, 84, 60, 222/- Vide this office letter dated 16/09/2013 you were asked to reconcile the difference of expenses claimed as shown above. For the above, you have replied vide your letter dated 03/10/2013 making the following submissions:- I. Reconciliation Statement of Power Fuel: 1. Power purchase from APSPDCL ₹ 1, 77, 52, 025* 2. Leased godown electricity charges ₹ 3, 98, 891 3. Diesel Consumption by generator ₹ 3, 63, 153 4. Generator Maintenance (spares) ₹ 33, 848 5. Firewood Consumption by Boiler ₹ 6, 84, 779 6. Paddy husk consumption by Boiler ₹ 1, 92, 27, 526 TOTAL ₹ 3, 84, 60, 222 *Power purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering the explanation of the assessee observed that the Director s Report signed by the Executive Chairman Managing Director clearly shows that coal and others (husk) were not utilized for the purpose of power. There can be no other stock and no conclusion evidence than the signed report of the Executive Chairman Managing Director to say that coal and husk were not utilized for the purpose of business. Hence, even if the purchase of coal and husk is genuine, the same cannot be allowed as there were not laid out or expended wholly and exclusively for the purpose of business as certified in the Director s Report. Accordingly, the Assessing Officer by relying upon the Director s Report signed by the Executive Chairman Managing Director said that electricity, purchased from the grid and the electricity generated by using diesel only, were used and coal and others were not used for the purpose of generating electricity should be taken as a conclusive proof. Accordingly, the Assessing Officer has disallowed an amount of ₹ 2, 03, 93, 529/- (Rs. 3, 84, 60, 222 ₹ 1, 80, 66, 693) by treating it as not incurred wholly and exclusively for the purpose of business und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Report. In this context, it is noticed that in the Director s Report, the expenditure incurred towards electricity only has been shown by the appellant as part of disclosure with respect to Conservation of Energy, whereas in the profit loss account there was an expenditure incurred towards Leased Shed Electricity Charges and Boiler Maintenance of ₹ 3, 98, 891/- and ₹ 1, 99, 12, 305 respectively, which was claimed under the head Power and Fuel Expenditure. In fact, it is further noticed that the appellant has been using a licensed boiler for many years and the expenditure on Husk for firing the said boiler and the generator maintenance by way of diesel and other connected expenditure has been allowed all along. It is also observed that in the preceding assessment year, such expenditure has been claimed by the appellant and was not subjected to any disallowance by the Assessing Officer. The appellant produced evidences in respect of installation of a new high capacity boiler during the year under consideration with appropriate licences during the course of assessment proceedings as well as during the appeal proceedings before me. It is observed that the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld. 10. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. 11. The assessee has claimed expenditure of ₹ 3, 84, 60, 222/- under the head power and fuel in the profit loss account. The Assessing Officer has noticed from the Director s Report (Form-A) that the expenditure incurred under the head power fuel consumption was only of ₹ 1, 80, 66, 693/-. Therefore, Assessing Officer asked the assessee to substantiate the entire expenditure claimed in the profit loss account. The assessee has submitted before the Assessing Officer that the Director s Report (Form-A) is aimed to disclose the energy conservation measures taken by the specified industries with regard to petroleum products i. e. diesel oil, furnace oil and other oils and electricity in view of their impact on economy due to the reason that crude oil is imported from other countries. To initiate control measures upon such resources, Form-A is prescribed by the Ministry of Company Affairs. Whereas, paddy husk is only agro waste generated by rice milling units and it is bulky in nature and it could be used locally, its transportatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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