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TMI Blog2014 (8) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial justice is to prevail and not the technicality – Relying upon Jute Corporation of India Limited Versus Commissioner of Income-Tax And Another [1990 (9) TMI 6 - SUPREME Court] – the matter is liable to remit back t the AO for verification of assessee’s claim regarding the whole amount having been taxed between AYs 2001-02 to 2005-06 as per the chart – Decided in favour of Assessee. - ITA No. 2952/Del/2012, ITA No. 3781/Del/2012 - - - Dated:- 7-8-2014 - Shri S. V. Mehrotra And Shri Joginder Singh,JJ. For the Petitioner : Shri S. N. Bhatia DR For the Respondent : Shri Vikas Srivastava Adv.; Shri Mayank Aggarwal CA Ms. Aditi Goyal CA ORDER These cross-appeals preferred by the department as well as the assessee, are directed against the order dated 17-4-2012 passed by the ld. CIT(A)-XIII, New Delhi, in appeal no. 2876/08-09, relating to A.Y. 2006- 07. Both the appeals were heard together and are being disposed of by a common order for the sake of convenience. Revenue s appeal ( ITA no. 2952/Del/2012): 2. Brief facts of the case are that the assessee company was carrying on business of manufacturing and sale of pizza from its retail outlet. It had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated know how and technical knowledge. This amount was already capitalized in the books of a/c of the assessee. (ii) Franchisee/ Marketing fee for continuing use of Domino s name, logo etc. was payable @ 3% on assessee s store and 3% on subfranchise store on the basis of quantum of monthly sales. The Franchisor had the right to inspect the pizzas and other foods products prepared by the assessee during the tenure of the agreement. The Franchisor had to provide the requisite advertisement material that it had developed in the US and required the assessee to adhere to the global standards and operating procedures adopted by the Franchisor during the tenure of the agreement. 2.2. Ld. CIT(A) after considering the entire agreement in detail allowed the assessee s claim, relying on following decision: - CIT Vs. J.K. Synthetics Ltd. 309 ITR 371; - CIT Vs. Sharda Motor Industrial Ltd. 319 ITR 109; and - Climate Systems India Ltd. Vs. CIT 319 ITR 113. 3. At the out set ld. Counsel for the assessee submitted that this issue is covered by the decision of the ITAT in assessee s own case for A.Y. 2003-04 to 2005-06 (ITA nos. 183, 184, 185 186/Del/2011 dated 24-10-2012), wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2001-02 and, accordingly, made an addition of ₹ 1,34,98,000/-. The assessee preferred appeal before ld. CIT(A) who upheld the assessment order and confirmed the addition. Thereafter assessee did not contest this addition and did not file any appeal before the ITAT. 5.2. The assessee further pointed out that by the time the decision of ld. CIT(A) was received by the assessee, income-tax returns for A.Y. 2003-04 and 2003-04 had already been filed. Thus, this decision was given effect to by obtaining rectification order u/s 154 of the I.T. Act for these two assessment years i.e. for A.Y. 2002-03, voluntarily offering an amount of ₹ 1,96,00,436/-; and for A.Y. 2003-04 ₹ 1,25,60,325/-. As far as AY 2004-05 was concerned, the necessary adjustment had been made in the computation of income while filing income-tax return of ₹ 94,99,332/-. For A.Y. 2005-06 also adjustment of ₹ 14,80,000/- was made while filing income-tax return. Thus, from AY 2001-02 to A.Y. 2005-06 the total sum of ₹ 7,99,99,683/- had been offered for taxation. The assessee further clarified that since assessee had been able to spend only ₹ 1,18,44,922/- by the A.Y. 2003-04, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has filed a detailed chart explaining how the sum of ₹ 8 crores received from CCIPL towards carrying out the joint promotion and marketing activity had been adjusted against advertisement expenses incurred by the assessee between AYs 2001-02 to 2005-06. 6.1. Ld. Counsel referred to page 12 of the PB, wherein letter dated 15-12-2008 addressed to ITO, Ward 10(4), New Delhi is contained, in which it was pointed out that during the current assessment year due to wrong understanding of facts the same sum which had already been taxed in the previous years had been reduced from the advertisement expenses by ₹ 145.20 lacs resulting in over reporting of income by ₹ 145.20 lacs. 7. We have considered rival submissions and have perused the record of the case. Ld. CIT(A) has primarily denied the assessee s claim because the assessee had not filed revised return of income, relying on the decision in the case of Goetze India Ltd. (supra). We find that in the said decision itself Hon ble Supreme Court has made it clear that the issue decided in the said case was limited to the power of the assessing authority and did not impinge on the power of the ITAT u/s 254. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. There appears to be no good reason and none was placed to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the Assessee in seeking modification of the order of assessment passed by the Income Tax Officer. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. The conclusion that the error in not claiming the deduction in the return of income was inadvertent cannot be faulted for more than one reason. It is a finding of fact which cannot be termed perverse. There is nothing on record that militates against the finding. The Appellant had not suggested, much less established t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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