COMMISSIONER OF INCOME TAX Vs. JUGAL KISHORE DANGAYACH

JUDGEMENT

(1.) THIS income -tax appeal under s. 260A is directed against the order of Income -tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as Tribunal) dt. 8th July, 2010 and relates to the asst. yr. 2006 -07. The brief facts emerging on the face of record are that the assessee is carrying on business of manufacturing and trading of pulses. The assessee declared an income of Rs. 31,30,000. Two questions primarily have been raised in the instant appeal against the impugned order of the Tribunal, which according to the Revenue are substantial questions of law.

(2.) INSOFAR as the claim of electricity is concerned, it was the claim of the assessee/respondent that the assessee was using the premises of one M/s. N.K. Industries for which, entire open as well as covered area was used by it for storage purposes. Though the electricity connection was in the name of M/s. N.K. Industries, but since the actual user was the assessee, therefore, it was being paid by the respondent/assessee and was duly claimed accordingly. It is the claim of the AO that the premises of M/s. N.K. Industries was under construction and, therefore, the assessee was not able to use the property for storage purpose and, therefore, the claim was wrongly made. Secondly it was observed by the AO that the assessee did not disclose before the District Supply Officer, Commercial Taxes Department, insurance company etc. etc. that the assessee was using the factory premises of M/s. N.K. Industries and that it was a related concern in as much as the proprietor of M/s. N.K. Industries is the brother of the assessee.

(3.) DISSATISFIED with the said disallowance, a further appeal was preferred before the Tribunal, where also the facts were reiterated. The Tribunal was satisfied about the claim of the assessee/respondent on the basis of the facts pertaining to earlier three assessment years, where the claim had been allowed all throughout. The Tribunal also arrived at a finding that if the version of the AO and the units of electricity are excluded as mentioned in the bills of M/s. N.K. Industries then consumption of electricity per unit will come to 20.5 kgs. vis -a -vis 21.49 kgs. in the immediately preceding year, whereas the consumption per unit including the units of electricity will come to 15.5 kgs. vis -a -vis 17.3 per unit kg. After analysing the evidence on record, it was also observed by the Tribunal that the premises has been used by the assessee actually and no rent has been paid and for actual user of electricity, payment has been made. Accordingly, the disallowance of electricity amounting to Rs. 8,16,115 was deleted. It is this finding of the Tribunal, which has been assailed before us.