2017 (2) TMI 1082 - AT - Income Tax

Disallowance of special discount - same is not claimed by filing revised return and claimed by way of a letter during the course of assessment proceedings - Held that - The jurisdictional High Court in the case of CIT Vs Pruthvi Brokers and Share Holders Pvt. Ltd (2012 (7) TMI 158 - BOMBAY HIGH COURT ) after considering the decision of the Hon ble Supreme Court in the case of Goetze (India) Ltd 2006 (3) TMI 75 - SUPREME Court held that assessee is entitled to raise not merely additional legal submissions before Appellate Authorities, but is also entitled to raise additional claims before them. Therefore, in view of this decision, the Ld. CIT (Appeals) should not have rejected the claim of the assessee on the ground that the assessee made its claim not in the revised return but in the course of assessment proceedings. He should have entertained the claim even though the assessee made such claim in the course of assessment proceedings. We find that the assessing officer while allowing the claim for deduction of special discount has examined the stand of the assessee and accepted in so far as the special discount. However, he has denied the rest of the amount only on the ground that this amount, since not claimed in the revised return, the same is not allowable. In our opinion, the action of the assessing officer in not allowing the claim of the assessee is not correct. Therefore, we direct the assessing officer to allow the claim of the assessee.

Summary

Issues:
Disallowance of special discount claimed in assessment proceedings but not in the original or revised return.

Analysis:
The appeal was filed against the order of the Ld. CIT (Appeals) regarding the disallowance of a special discount claimed by the assessee. The tribunal observed that the assessee had not provided sufficient evidence to establish the authorization for the special discount scheme or the liability of the assessee company. The tribunal directed the matter to be reexamined by the Assessing Officer to determine the validity of the claim. Subsequently, the assessing officer allowed one part of the claim but rejected the other part, citing that it was not claimed in the original or revised return. The Ld. CIT (Appeals) upheld the assessing officer's decision, leading to the current appeal.

The Ld. Counsel for the assessee argued that the Ld. CIT (Appeals) had the authority to consider claims not included in the return, citing a relevant High Court decision. The assessing officer and the Ld. CIT (Appeals) denied the claim based on the timing of submission, stating that claims made during assessment proceedings are not admissible. The tribunal reviewed the case history and noted that the assessee had initially claimed a special discount in the revised return and later through a letter during assessment proceedings. The tribunal emphasized that the jurisdictional High Court allowed additional claims to be raised before the Appellate Authorities, irrespective of when they were submitted.

In light of the High Court decision, the tribunal found the assessing officer's denial of the claim for the balance special discount to be incorrect. The tribunal directed the assessing officer to allow the full claim for the special discount and adjust the income accordingly. The appeal of the assessee was allowed, overturning the decisions of the lower authorities.