Case Law Details
Tewari Warehousing Co. Pvt. Ltd Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that the electricity load extension charges are allowable as revenue expenditure. Accordingly, addition towards the same is unjustifiable and liable to be set aside.
Facts- The assessee is a private limited company engaged in the business of loading, unloading, blending and packing of raw tea. E-return for AY 2014-15 filed declaring total income of Rs. 1,99,63,630/-. Case selected for scrutiny followed by serving of notices u/s 143(2) & 142(1) of the Act. Assessment u/s 143(3) of the Act completed on 31.12.2016 making various additions and assessing income at Rs. 2,34,65,970/-. The additions made by ld. AO were challenged before ld. CIT(A) but the assessee failed to get any relief. Aggrieved, the assessee is now in appeal before this Tribunal.
Conclusion- Held that for entry appearing in 26AS statement, addition cannot be made in the hands of the assessee unless until a complete evidence is put forth to prove that such transaction has actually taken place.
Hon’ble Punjab & Haryana High Court in the case of CIT vs. Lakhani Rubber Works held that the electricity load extension charges are allowable as revenue expenditure. We also observe that during the year the assessee has purchased new plant and machinery and which further, justifies the payment of electricity load extension charges. In our considered view the said sum paid towards electricity load extension charges is a revenue expenditure.
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