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 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 Tribunal's 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 assesee 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 assesseee 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 2 electricity charges paid to the lesseee. The Tribunal rejected the claim of the assessee and confirmed disallowance because there was no acceptable evidence. We also feel that if at all assessee's claim is bonafide, 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 received from the appellant. Since rental income originally returned by the assessee is a deduction in 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 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. C.N.RAMACHANDRAN NAIR Judge V.K.MOHANAN Judge pms