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TMI Blog2024 (7) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... use of sorting machine for the business purpose has not been disputed by the AO. Hence, where the consumption of electricity in the process of sorting the food grains and pulses is an inevitable part of business activity of the assessee then the claim of electricity expenses is not an absolutely bogus claim but the same was disallowed for want of supporting evidence. The assessee has explained the claim of electricity as the machine is used in the godown owned by the husband of the assessee and therefore, the electricity connection was also in the name of husband of the assessee. AO has not disputed this fact to the extent of the godown owned by the husband of the assessee however, since the assessee could not furnish the supporting evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing grounds of appeal: 1. That the learned CIT(A), NFAC erred in not holding that the penalty order was bad in law. It was perverse; (2) it was based on irrelevant material; (3) it was un- reasonable; (4) there was mis-application of the provisions of law; (5) the authority misdirected. 2. That the learned CIT(A) NFAC erred in not holding that the penalty order passed by the A.O. was without following rule of natural justice and fair play and was therefore a nullity and the same may be declared null and void. 3. That the learned CIT(A) NFAC erred in confirming the penalty levied on power expenses of Rs. 7,99,254/- on the basis of the disallowance of expenses confirmed by the Hon. ITAT, Indore bench is bad in law and needs to be deleted. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer has allowed the depreciation. Therefore, the Ld. AR has submitted that the claim of the assessee is a bona fide claim though the same was disallowed for want of supporting evidences. He has relied upon the decision of Hon ble Supreme Court in the case of CIT Vs Reliance Petroproducts (P) Ltd 322 ITR 158 and submitted that the disallowance of expenses cannot be mean that the assessee have furnished inaccurate particulars of income. He has further contended that sorting and packaging is an essential part of the business of the assessee. The assessee has not claimed any other electricity expenses except the electricity expenses which are incurred exclusively for the business of the assessee and the assessee has duly recorded the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of Clariant Chemicals (India) Ltd vs. ACIT 229 Taxman 267 and submitted that after considering the decision of Hon ble Supreme Court in case of CIT Vs. Reliance Petroproducts (P) Ltd as well as other decision of Hon ble Bombay High Court (supra) has upheld the penalty levied u/s 271(1)(c) of the Act in respect of disallowance of claim u/s 35 in respect of 6 items out of total 9 items claimed by the assessee. Ld. DR relied on the orders of authorities below. 7. We have considered the rival submissions as well as relevant material on record. There is no dispute that the Assessing Officer has disallowed the claim of electricity expenses for want of supporting evidences and the same was confirmed by CIT(A) as well as by this Tribunal v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has met brought any material suggesting that there was any understanding with the proprietor of M/s. Garg Warehousing in respect of electricity bill to be paid by the assessee. In the absence of such material, we do not see any infirmity into the order of the authorities below and the same is hereby dismissed. 8. Thus the claim of electricity expenses was disallowed because the assessee failed to produce the supporting evidences. It is a matter of record that the process of sorting grains is an essential part of business activity of the assessee and the assessee has installed the sorting machine which cannot run without electricity. Sorting machine is a part of Plant Machinery shown in the balance sheet of the assessee and Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer or the Commissioner (Appeals) [or the [Principal Commissioner] or Commissioner] or to be false, or (B) such person offers an explanation which he is not able to substantiate [and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him]. Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. Clause(B) of Explanation 1 contemplates the situation where the explanation offered by the assessee is neither substantiated nor fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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