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TMI Blog2009 (3) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the assessee in the earlier years and no fresh loans were advanced in the current year. The AO noticed that the assessee was incurring huge expenses on borrowings and, therefore, had these loan been recovered from the subsidiary companies, the interest expenses of the assessee would have been less. The AO disallowed interest claim of assessee at ₹ 2,62,74,000/- by applying 12% of interest. In respect of interest-free loans to Pentasia Investment India Ltd., the assessee submitted that this company has merged with the assessee company as per the High Court's order dated 27.10.2003 w.e.f. 1.4.2002. The CIT(A) following their earlier years orders for AY 2000- 01, 2001-02 and 2002-03 deleted the disallowance of interest amount related to Pentasia Investment(I) Ltd and Asian Paints Industrial Coatings Ltd. However, the CIT(A) confirmed the addition of interest amount pertaining to Technical Instruments Manufacturing Ltd. 5. The revenue is in appeal through sole ground against the action of the CIT(A) in deleting disallowance of interest amount related to Pentasia Investment(I) Ltd and Asian Paints Industrial Coatings Ltd. and the assessee is in appeal against action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inability to disclose such sale value of damaged goods in the current year. The AO estimated the realizable value of the damaged stock at ₹ 50.00 lakhs, which was about 0.4% of the total stock. The addition made by the AO has been confirmed by the CIT(A). 12. We have heard the learned representatives of the parties and perused the record. The learned AR did not argue much on the issue. In principle we agree with the findings of the AO that stock of damaged goods should also be required to be valued at the end of the year. As regards estimation of amount of the said stock we find that there is no material available on record for estimation of a different amount of the stock than estimated by the AO. We, therefore, confirm the orders of the revenue authorities on this issue. 13. Ground No. 3 is in respect of addition of ₹ 4.70 lacs being 50% of expenditure incurred on account of presentation of gift articles. 14. The assessee claimed an amount of ₹ 9,39,208/- on account of gift articles presented. The assessee did not furnish the required details before the AO and, therefore, the AO disallowed the claim of the assessee. The CIT(A) after considering the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 98.36 lacs on account of prior period adjustments in the return of income filed but the assessee claimed that such was pressed during the course of assessment proceedings. The AO did not allow the claim of the assessee. Before the CIT(A), the assessee submitted that the claim was made before the AO vide letter dated 28.02.2006 but the same has not been allowed. The details of sundry expenses written off submitted before the AO is reproduced from page 22 of CIT(A)'s order as under:- S. No. Particulars Amount 1 Unadjusted balances in dealers a/c w/o 33,70,647 2 Unadjusted balances in deposit a/c w/o 32,73,741 3 Unadjusted balances in Agent's a/c w/o 5,97,602 3 Unadjusted Balance in Employees A/c W/o 25,94,034 98,36,024 20. The CIT(A) held that claim for deduction can be made only in the return of income filed. He further held that if a claim for deduction is not made in the return of income filed, it cannot be claimed subsequently, for which he placed reliance on the judgment of Supreme Court in the case of Goetze (India) Ltd., 284 ITR 323 wherein it was held that such claim is not allowable. The CIT (A) finally rejected the assessee's claim by further observing as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the AO to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the income-tax appellate tribunal under section 254 of the Income-tax Act, 1961. There shall be no order as to costs." 21.1 From the above finding of the Apex court, we find that the Apex court has decided the issue for a limited purpose in respect of power of the assessing authority. The Apex court clarified in its judgment itself that their finding does not impinge on the power of the Income Tax Appellate Tribunal under section 254 of the Act. We find that the CIT(A) has also similar power u/s 251(1)(c). The said section reads as under:- "Section 251(1): In disposing of an appeal, the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier decision of this Court in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225, which was also a decision of a three Judge Bench wherein the scope of section 31(3)(a) of the Indian Income-tax Act, 1922 [which was almost identical to section 251(1)(a) of the 1961 Act] was considered and it was held: "If an appeal lies, section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under section 31(3)(a), in disposing of such an appeal, the Appellate Assistant Commissioner may, in the case of an order of assessment, conf irm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income-tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is coterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do'." (p. 693) After referring to these observations, this Court in Jute Corpn. of India Ltd.'s case (supra) has stated : "The above observations are squarely applicable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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