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Rajasthan Renewable Energy Corporation Limited Versus Deputy Commissioner of Income Tax, Circle-6, Jaipur.

2015 (11) TMI 589 - ITAT JAIPUR

Disallowance of payment towards Energy conservation Contribution expenses - whether expenditure not incidental to the business of the assessee? - Held that:- The assessee company has nominated as a State Designated Agency of Bureau of Energy Efficiency, Ministry of Power, Government of India on March, 2003 for promote efficient use of energy and its conservation and also enforce the provisions of energy conservation Act, 2001. The company was incorporated to plan, promote and organize integrated .....

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ale of power generated in accordance with the state policy and broad economic consideration. To promote, support assist, sponsor the use of non-conventional energy sources in the country or abroad and disseminate useful knowledge and understanding in the various fields of non-conventional energy among mass. The assessee paid ₹ 5 lacs to perform the object of the company. This amount was paid towards energy conservation contribution fund, which is statutory liability as per provisions of En .....

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articipate could not alter the character of expenses incurred by way of contribution to such fund by the assessee from his benefit to other benefits. Thus we are of the considered view that the assessee has incurred expenses wholly and exclusively for business purposes - Decided in favour of assessee. - ITA No. 983/JP/2013 - Dated:- 30-9-2015 - SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM For The Assessee : Shri Mukesh Goyal (CA) For The Revenue : Shri O.P. Bhateja (Addl.CIT) ORDER PER T.R. ME .....

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led its return on 29/09/2008 declaring total income of ₹ 39,73,280/-. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (in short the Act). The ld Assessing Officer observed that the assessee had debited ₹ 5 lacs in P&L account towards energy conservation contribution expenses. The Assessing Officer gave reasonable opportunity of being heard on this issue. The assessee submitted before the Assessing Officer that as per the directions of the State Government (Energy .....

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sed herewith for your ready reference. After considering the assessee s reply, it has been held that contribution made by the assessee cannot be said to be incidental to the business of the assessee. These expenses can also not said to be incurred wholly and exclusively for the business purpose of the assessee. Accordingly, he made addition of ₹ 5 lacs in the income of the assessee. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT( .....

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d circumstances of the case the addition made by the A.O. is fair and reasonable and the same is sustained. The appellant fails on this ground. 4. Now the assessee is appeal before us. The ld AR of the assessee has submitted that the company is State Nodal Agency of Ministry of New & Renewable Energy (MNRE) for development and promotion of Renewable Sources of energy in the State of Rajasthan. The company is nominated as a State Designated Agency (SDA) of Bureau of Energy Efficiency (BEE) Mi .....

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awareness and disseminate information for efficient use of energy and its conservation and for undertaking awareness programme for consumers, industrial and commercial sectors, educational institutions, farmers and others; ii to meet the expenditure incurred by the State Designated Agency for training of personnel and specialists for efficient use of energy and its conservation. iii for promotion of Research and Development in the field of Energy Conservation. iv to develop testing and certific .....

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g grant to the centrally sponsored schemes and schemes of Bureau of Energy Efficiency implemented in the State of Rajasthan. viii to provide subsidy for use of any energy efficient or energy conservation device or machinery notified by the State Government. ix to meet the expenses incurred by the State Designated Agency for implementing the provisions of the Act and x to meet the expenses incurred by the State Designated Agency on staff for dedicated Energy Conservation cell. The ld AR further s .....

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bility and define project reports, construction, generation operation and maintenance of power stations and projects and sale of power generated in accordance with the state policy and broad economic consideration. (ii) To promote, support assist, sponsor the use of nonconventional energy sources in the country or abroad and disseminate useful knowledge and understanding in the various fields of non-conventional energy among mass. He placed reliance on the following case laws:- (i) CIT Vs. Raj S .....

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essee company has nominated as a State Designated Agency of Bureau of Energy Efficiency, Ministry of Power, Government of India on March, 2003 for promote efficient use of energy and its conservation and also enforce the provisions of energy conservation Act, 2001. The energy Department has constituted Rajasthan State Energy Conservation Fund (RSECF) vide order dated 01/06/2006 as per Section 16 of Energy Conservation Act, 2001 to achieve the object prescribed in the Act. The company was incorpo .....

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