TaxTMI 
TaxTMI 
2018 (7) TMI 1253
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.... under section 115J of the Income Tax Act, 1961 (hereinafter referred to as "Act"). Return filed by the assessee was processed under section 143(1) of the Act. Later on, Assessing Officer has issued notice under section 143(2) and also 142(1) and called explanation and accordingly assessment was completed under section 143(3) of the Act. 3. During the course of assessment proceedings, the Assessing Officer has noticed that assessee claimed expenditure of Rs. 3, 84, 60, 222/- under the head 'power and fuel' in the profit & loss account. However, in the Director's Report (Form-A), it was clearly reported that the expenditure incurred under the power and fuel consumption was only Rs. 1, 80, 66, 693/-. The Assessing Officer, vide letter dated 16/09/2013, asked the assessee to reconcile the difference with necessary evidence. By letter dated 03/10/2013, the assessee has given reply, which was not accepted by the Assessing Officer. Again, Assessing Officer by issuing a letter dated 28/10/2013 asked the assessee to explain as to why the difference in power consumption shown in the profit & loss account and the Director's report, amounting to Rs. 2, 03, 93, 529/- (Rs. 3, 84, 60, 222 - R....
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....required as an Annexure to the Director's Report under the disclosure of particulars in the report of the Board of Directors, Rule, 1988, which is mandatory under the provisions of the Companies Act, 1956. The Form-A is aimed to disclose the energy conservation measures taken by the specified industries with regard to petroleum products i. e. diesel oil, furnace oil and other oils and electricity in view of their impact on economy, due to the reason that, crude oil is imported from other countries and electricity is being purchased from other States. To initiate control measures upon such resources, Form-A is prescribed by the Ministry of Company Affairs. Whereas, paddy husk is only agro waste generated by rice milling units and it is bulky in nature and it could be used locally, its transportation and labour charges are normally more than its cost. In view of this, assessee submitted that its Directors did not specifically disclose these items in Form-A. The assessee further submitted that after verification of about 1000 husk purchase vouchers along with weighment slips, ledger account copies of 31 husk supplier in its books of account and also verification of cash/cheque payment....
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....husk purchase vouchers along with weighment slips, ledger copies of husk suppliers in its books of account and also verification of cash/ cheque payments to the supplies were placed before the Assessing Officer. The Assessing Officer without examining the same and by relying the Director's Report disallowed the expenditure. Therefore, he submitted that same may be allowed. 6. The ld. CIT(A) basing on the submissions made by the assessee directed the Assessing Officer to allow expenditure of Rs. 2, 03, 93, 529/-. The relevant portion of the order is extracted as under:- "5. 1. 1. 1 have gone through the Directors' Report and the audited finance statements and noticed that in the Director's Report at Form-A, it was mentioned that the expenditure incurred by the appellant towards Power and Fuel Consumption i. e. electricity purchases from APEPDCL at Rs. 1, 77, 03, 840/- and own generation of power through Diesel Generator at Rs. 3, 63, 153/-. However, it is observed from the profit & loss account of the appellant expenditure incurred under the head Power and Fuel was shown at Rs. 3, 84, 60, 222/-. The Assessing Officer has therefore concluded that there is a differ....
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....usiness of the appellant. Hence, the Assessing Officer is not justified in disallowing the difference of Power and Fuel Expenditure of Rs. 20393529/-. Accordingly, the Assessing Officer is directed to delete the disallowance made in this regard. " 7. On being aggrieved, Revenue carried the matter in appeal before this Tribunal. 8. Ld. Departmental Representative has submitted that assessee has not able to substantiate the expenditure incurred in respect of husk and coal of Rs. 2, 03, 93, 529/-, hence Assessing Officer disallowed the same. He further submitted that ld. CIT(A) without examining the details of the expenditure incurred in respect of coal and husk, based on the submissions made by the assessee directed the Assessing Officer to allow the expenditure, is not correct and submitted that issue may be remitted back to the file of the Assessing Officer for fresh consideration. 9. On the other hand, the Authorised Representative for the assessee strongly relied on the order passed by the ld. CIT(A). He also submitted that the Assessing Officer disallowed the expenditure only based on the Director's Annual Report, which is factually incorrect and therefore, the entire e....