9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (2) TMI 319 - AT - Income TaxAdditional claims before the appellate authorities - Return under section 139(1) was filed belatedly - Whether the assessee makes a claim of depreciation or not in his return of income, the A.O. is duty bound to grant depreciation allowance by virtue of Explanation 5 to section 32(1) of the Act - The claim of depreciation was not made in the original return filed, therefore assessee files revised return during course of assessment proceeding u/s 143(3) Held that - No doubt, the revised return cannot be taken cognizance of since the original return was filed belatedly. However, an additional claim could be made before the appellate authority and the appellate authority is duty bound to consider the same. The assessee is entitled to raise additional grounds, not merely in terms of legal submissions but in respect of new claim not made in the return filed. The CIT(A) has not examined the issue in correct perspective taking into consideration the Explanation 5 to section 32(1) of the Act and the Board s Circular No.14 (XI-35) of 1955, dated April 11, 1955. CIT(A) has to be decide as to whether the asset on which depreciation is claimed is a business asset and if so, to allow the claim of the assessee in accordance with law. Remand back to revenue
Issues Involved:
1. Legitimacy of the revised return filed by the assessee. 2. Entitlement to claim depreciation on a car used for business purposes. Detailed Analysis: 1. Legitimacy of the Revised Return Filed by the Assessee The assessee, a real estate broker, filed an original return on 29/2/2008 declaring an income of Rs.38,02,406/-. During the assessment proceedings, a revised return was filed on 28/7/2009, reducing the income to Rs.34,15,470/- after claiming depreciation on a car amounting to Rs.3,86,934/-. The Assessing Officer (AO) did not accept the revised return, citing that the original return was filed belatedly and thus, a revised return under section 139(5) of the Act could not be entertained. The CIT(A) upheld this decision, relying on the Supreme Court judgments in Kumar Jagadish Chandra Sinha v CIT and Goetze (India) Ltd. v CIT, which stated that a revised return cannot be filed if the original return was not submitted within the prescribed time under section 139(1) or 139(2). 2. Entitlement to Claim Depreciation on a Car Used for Business Purposes The assessee argued that the depreciation claim on the Benz Car used exclusively for business purposes should be allowed under section 32 of the Act, regardless of whether it was claimed in the original return. The assessee cited Explanation 5 to section 32(1), which mandates the AO to grant depreciation if the asset is used for business purposes. The assessee also referred to Circular No.14 (XI-35) of 1955, which obligates tax officers to guide taxpayers on their entitlements even if not claimed in the return. The CIT(A) rejected the appeal, stating that the revised return was invalid due to the late filing of the original return. However, the Tribunal noted that Explanation 5 to section 32(1) requires the AO to grant depreciation if the asset is used for business purposes, irrespective of whether the claim was made in the return. The Tribunal also referenced several judgments, including Jute Corporation of India Limited v CIT, which established that appellate authorities have the jurisdiction to entertain new claims not made in the original return. The Tribunal emphasized that the appellate authorities have plenary powers to modify assessments and consider additional grounds, as confirmed by the Supreme Court in National Thermal Power Company Limited v CIT. The Tribunal distinguished the Goetze (India) Ltd. v CIT judgment, noting that it pertained to the powers of the AO and did not restrict the powers of appellate authorities to entertain new claims. The Tribunal cited the Delhi High Court's interpretation in Commissioner of Income-tax v. Jai Parabolic Springs Limited, which clarified that the Tribunal could entertain additional grounds for a just decision. Conclusion The Tribunal concluded that the CIT(A) did not consider Explanation 5 to section 32(1) and the Board's Circular correctly. It held that the CIT(A) has the power to consider additional claims made before him, even if not included in the original return. The case was remanded to the CIT(A) to determine whether the asset on which depreciation was claimed is a business asset and to allow the claim if it meets the legal requirements. Final Decision The appeal filed by the assessee was allowed for statistical purposes, and the case was remanded to the CIT(A) for fresh consideration.
|
