1997 (10) TMI 46 - HC - Income Tax

Court upholds assessee's right to claim weighted deduction on additional items under Income-tax Act

Commissioner Of Income-Tax Versus Bharat Curio Stores

The High Court ruled in favor of the assessee, affirming the Appellate Tribunal's direction for the Appellate Assistant Commissioner to consider the claim ... Appeal To AAC, Export Market Development Allowance Issues:Whether the Appellate Tribunal was justified in directing the Appellate Assistant Commissioner to entertain the claim of the assessee for weighted deduction on additional items for the assessment years 1976-77 and 1977-78.Analysis:The High Court of Allahabad was tasked with deciding whether the Appellate Tribunal's direction to the Appellate Assistant Commissioner to consider the assessee's claim for weighted deduction on additional items was appropriate. The Appellate Tribunal had instructed the Appellate Assistant Commissioner to entertain the claim for both assessment years and then decide the claim afresh. The crux of the matter was whether this direction was valid.The learned standing counsel argued that the assessee did not raise any claim regarding the additional items before the Income-tax Officer for both assessment years. However, it was acknowledged that the claim for weighted deduction was made by the assessee under section 35B of the Income-tax Act for some items. The standing counsel contended that the Appellate Tribunal erred in directing the Appellate Assistant Commissioner to consider the additional items without proper material support.Referring to a similar case, Madhu Jayanti P. Ltd. v. CIT [1985] 154 ITR 277, the High Court highlighted that when an assessee seeks to enhance or expand their original claim by including more items, it does not constitute a new claim for weighted deduction under section 35B. In the mentioned case, the Calcutta High Court held that adding new items to the claim did not amount to setting up a completely new claim. The High Court of Allahabad agreed with this interpretation, emphasizing that since the assessee had already claimed weighted deduction for some items and extended the claim before the Appellate Assistant Commissioner, it did not amount to a new claim.Ultimately, the High Court ruled in favor of the assessee, affirming that the Appellate Tribunal's direction to the Appellate Assistant Commissioner to entertain the claim on additional items was justified. The court found that since the assessee had already raised the claim for weighted deduction before the Income-tax Officer and there was no indication that material facts regarding the additional items were unavailable, the direction was appropriate.