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TMI Blog2015 (7) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee on this issue. The orders of the lower authorities are hereby set aside and the claim of the assessee on this issues is allowed. Claim for deduction of prior period expenses - CIT-A rejecting the claim for deduction on the ground that the relief can be claimed only by filing the revised return - Held that:- The taxing authorities should charge the legitimate taxes from the tax payers. They are not supposed to punish them for their bonafide mistakes of not claiming a deduction to which they are otherwise eligible under the provisions of relevant laws. The ld. CIT(A) in appeal was supposed to look into the claim of the assessee and if found genuine then to allow the same as while adjudicating the appeal, he also acts as a qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing the revised return. 3. The appellant craves leave to add, alter, amend and/or rescind any grounds of appeal during the course of the hearing. Ground No.1 3. The assessee through ground No.1 has agitated the confirmation of disallowance of provision for warranty of ₹ 45,60,347/-. The assessee is engaged in assembly and sale of fuel dispensers. It also provides preventive and post sale maintenance services to the customers. The assessee during the year claimed ₹ 45,60,347/- on account of provision for warranty. 4. The Ld. CIT(A) upheld the Assessing Officer s (hereinafter referred to as the AO) order on the ground that the estimate is contingent and not authentic. Neither was there any consistency in the formul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessment year. The consistent application of the policy of provision rules our any doubt of malafides or of dishonest intention. He has further submitted that the provision has been created on the basis of reasonable, scientific and consistent approach. The Ld. A.R. has further invited our attention to page 15 of the paper book to show that against the provision of expenses made for a particular assessment year, the total expenditure incurred is subsequent years was more than the provision amount. 6. In view of the above submissions of the assessee, we find that the provision of warranty expenses has been made by the assessee on the basis of past experience and on a scientific basis. Even the actual expenditure incurred on subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order added back the same and reduced the returned loss by ₹ 10,71,714/-. Thus, addition of ₹ 10,71,714/- as prior period item amounted to double disallowance. The AO and the Ld. CIT(A) have not disputed the fact that these expenses pertain to F.Y. 2006-07 and thus, the AO was duty bound to grant relief to the assessee which the assessee has inadvertently failed to claim in the original or revised return. The Hon ble Bombay High Court in the case of CIT vs. Pruthvi Brokers Shareholders Pvt. Ltd. (2012) 349 ITR 336 (Bom.), while relying upon the various decisions of the Hon ble Supreme Court and other Hon ble High Courts, has held that even if a claim is not made before the AO, it can be made before the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became available on account of change of circumstances or law. The words could not have been raised must be construed liberally and not strictly. It is open to the assessee to claim a deduction before the appellate authority which could not have been claimed before the AO. The Hon ble Bombay High Court has further observed that the decision of Hon ble Supreme Court in the case of Goetze (India) Limited v. CIT (2006) 157 Taxman 1, regarding the restriction of making the claim through a revised return was limited to the powers of the Assessing Authority and the said judgment does not impinge on the power or negate the powers of the appellate authorities to entertain such claim by way of additional ground. In our view, the taxing authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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