UNITED FILM EXHIBITORS Vs. CIT

JUDGEMENT

(1.) Heard Sri K.R. Sudhakaran Pillai, counsel appearing for the assessee-appellant and Standing counsel appearing for the Income-tax department. The only question raised is whether the Tribunal was justified in confirming disallowance of Rs. 5,40,000 towards electricity charges paid by the assessee for the theatre building leased out to another party. It is clear from the Tribunals order that under the original lease agreement made on 12-12-1984, liability to pay electricity charges is on the lessee and the assessee was getting rent net of electricity charges. However, counsel for the assessee contended that during the previous year relevant for the assessment year there was change of terms of agreement through correspondence between assessee and the lessee whereunder assessee agreed to reimburse electricity charges paid by the lessee, the amount being Rs. 5,40,000. We find from the order of the Tribunal that assessee originally returned entire rental income of Rs. 27,60,000 and later filed a revised return claiming deduction of Rs. 5,40,000 being reimbursement of electricity charges paid to the lessee. The Tribunal rejected the claim of the assessee and confirmed disallowance because there was no acceptable evidence. We also feel that if at all assessees claim is bona fide, assessee could have produced documents in the form of assessment order completed in the name of the lessee showing inclusion of Rs. 5,40,000 being the reimbursement receive from the appellant. Since rental income originally returned by the assessee is a deductionin the computation of business income of the lessee, the amount subsequently paid by the assessee in the form of reimbursement of electricity charges should have been assessed in the hands of the lessee. In the absence of any clear evidence towards this, we feel the Tribunal was justified in assuming that original agreement providing for payment of electricity charges by the lessee continue to be operative. It is seen that p even though assessee availed one more opportunity through rectification petition before the Tribunal, still proper evidence was not produced and the Tribunal declined to interfere with the impugned order. We, therefore, dismiss the appeal.