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2023 (7) TMI 858 - AT - Income TaxAppellate authorities power considering additional grounds - additional claim u/s 36(1)(viii) should have been made by way of filing of revised return of income and not during the course of assessment proceedings - HELD THAT - In the case of Pruthvi Brokers Shareholders 2012 (7) TMI 158 - BOMBAY HIGH COURT held that an assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it. Again in the case of Sesa Goa Ltd 2020 (3) TMI 793 - BOMBAY HIGH COURT held that where assessee inadvertently omitted to make claim for deduction under section 10B in respect of two 100 per cent Export Oriented Undertakings, however, all necessary facts for claiming deduction under section 10B were already on record, Commissioner (Appeals) in exercise of his plenary/co-terminus powers, as well as Tribunal, ought to have entertained claim. In the case of B. G. Shirke Construction Technology (P.) Ltd 2017 (3) TMI 879 - BOMBAY HIGH COURT has held that an assessee is entitled to make a claim before Tribunal which was not raised before Assessing Officer at time of filing return of income or by filing a revised return of income. Accordingly, in light of the above judicial precedents on the subject and the facts of assessee s case, we are of the considered view that the assessee is eligible for this additional claim under section 36(1)(viii) of the Act. Decided in favour of assessee.
Issues Involved:
The issues involved in this case are the disallowance of an additional claim of deduction under section 36(1)(viii) of the Income Tax Act, 1961, and the authority of the appellate tribunal to entertain such claims without the filing of a revised return. Issue 1: Disallowance of Additional Claim of Deduction: The assessee filed an appeal against the order of the ld. CIT (A)-1, Rajkot, which confirmed the action of the Assessing Officer in disallowing an additional claim of deduction of Rs 22,50,000 under section 36(1)(viii) of the Act. The assessing officer did not allow the claim during the assessment proceedings as it was not made through a revised return. Issue 2: Authority of Appellate Tribunal to Entertain Additional Claims: The main contention of the assessee was that the Ld. CIT(A) erred in not exercising discretionary powers under section 250 of the IT Act and Rule 46A(6) of the IT Rules to modify the deduction claim, despite the legitimate claim being on record. The assessee argued that the appellate authorities have the power to allow such claims if they are tenable in law, even if not made through a revised return. Judgment Summary: The assessee, a cooperative bank, claimed a deduction under section 36(1)(viii) of the Act in the return of income. The claimed deduction was Rs 2,40,00,000, while the actual amount carried to the special reserve was Rs 2,62,50,000. The assessing officer did not allow the additional claim made during the assessment proceedings. The Ld. CIT(A) upheld the disallowance, stating that the claim should have been made through a revised return. In the appeal before the tribunal, it was argued that the claim was genuine, and the only reason for disallowance was the failure to file a revised return. The tribunal referred to various judicial precedents where appellate authorities allowed additional claims not made in the original return. The tribunal held that the assessee was entitled to the additional claim of Rs 22,50,000 under section 36(1)(viii) of the Act. Therefore, the appeal of the assessee was allowed, and it was held that the assessee was eligible for the additional claim under section 36(1)(viii) of the Act.
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