Sri.sajith Kumar v. Commissioner Of Income Tax, Thrissur

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 4TH JUNE 2008 / 14TH JYAISHTA 1930 ITA.No. 21 of 2004() -------------------- ORDER IN MP NO.47/COCH/2003 IN ITA.222/COCH/1999 OF I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: --------------------------- M/S. UNITED FILIM EXHIBITORS, V.K.ROAD,PALAKKAD, REPRESENTED BY MANAGING PARTNER K.NANDAKUMAR, S/O. P.K.KAIMAL, AGED 42 YEARS, HAVING PERMANENT RESIDENCE AT I-D VAISHNAVI, 17, LANDENS ROAD, KILPARK, CHENNAI. BY ADV. SRI.K.R.SUDHAKARAN PILLAI SRI.SAJITH KUMAR V. RESPONDENTS: ------------- COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 04/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. .................................................................... I.T. Appeal No.21 of 2004....................................................................Dated this the 4th day of June, 2008. JUDGMENT Ramachandran Nair, J. 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 confirmingdisallowance of Rs.5,40,000/- towards electricity charges paid by theassessee for the theatre building leased out to another party. It is clearfrom the Tribunal's order that under the original lease agreement made on12.12.1984, liability to pay electricity charges is on the lessee and theassessee was getting rent net of electricity charges. However, counsel forthe assesee contended that during the previous year relevant for theassessment year there was change of terms of agreement throughcorrespondence between assessee and the lessee whereunder assesseeagreed to reimburse electricity charges paid by the lessee, the amount beingRs.5,40,000/-. We find from the order of the Tribunal that assesseeeoriginally returned entire rental income of Rs.27,60,000/- and later filed arevised return claiming deduction of Rs.5,40,000/- being reimbursement of electricity charges paid to the lesseee. The Tribunal rejected the claim ofthe assessee and confirmed disallowance because there was no acceptableevidence. We also feel that if at all assessee's claim is bonafide, assesseecould have produced documents in the form of assessment order completedin the name of the lessee showing inclusion of Rs.5,40,000/- being thereimbursement received from the appellant. Since rental income originallyreturned by the assessee is a deduction in the computation of businessincome of the lessee, the amount subsequently paid by the assessee in theform of reimbursement of electricity charges should have been assessed inthe hands of the lessee. In the absence of any clear evidence towards this,we feel the Tribunal was justified in assuming that original agreementproviding for payment of electricity charges by the lessee continue to beoperative. It is seen that even though assessee availed one moreopportunity through rectification petition before the Tribunal, still properevidence was not produced and the Tribunal declined to interfere with theimpugned order. We, therefore, dismiss the appeal. C.N.RAMACHANDRAN NAIRJudge V.K.MOHANANJudge