2010 (3) TMI 867

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....tions of law would arise for adjudication of this Court: (i)  Whether in the facts and circumstances of the case, the ITAT was legally correct in allowing the electricity expenses in toto merely because such a bill had been raised by the Electricity Board, ignoring that the assessee itself had admitted that no manufacturing activity had been carried out during the year under assessment and that the assessee had failed to prove that the entire electricity expenses had wholly and exclusively been laid out for the purposes of its business. (ii)  Whether in the facts and circumstances of the case, the ITAT was legally correct in taking adverse view against the Revenue on the ground that there was no material on record to say tha....

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....s. 6,71,470/-. However, on the question of disallowance of Rs. 16,21,750/- out of electricity and power expenses, CIT(A) held that expenses for running of office paid by the Assessing Officer should have been allowed by the Assessing Officer. Accordingly, direction was issued to Assessing Officer. 4. On further appeal by the assessee to the Tribunal, it was held that claim of assessee with regard to depreciation of plant and machinery could not have been disallowed. In support of the aforesaid view, the Tribunal has placed reliance on the judgment of this Court rendered in CIT v. Nahar Exports Ltd., [2008] 296 ITR 419/163 Taxman 518 (Punj. & Har.). The Tribunal accepted the arguments of the assessee that once plant and machinery was kept....

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....entitled to depreciation. If the finding of the Assessing Officer is to the contrary, then the Assessing Officer shall be at liberty to deny the claim of the depreciation in accordance with law. While carrying out the aforesaid exercise, the Assessing Officer shall allow assessee the necessary opportunity of being heard and thereafter pass an order in accordance with law. Statistically speaking on this Ground, the assessee succeeds." 5. On the other issue of disallowing the electricity expenses, the Tribunal held that there was no material on record to conclude that any of the expense in question was not bona fide or it was extraneous to the business of the assessee-respondent. The tribunal referred to the Manufacturing and Trading accou....