2012 (10) TMI 1069 - AT - Income Tax

ITAT dismisses revenue's challenge on loss & bad debts claims, emphasizes rectification powers

The ITAT dismissed the revenue's Miscellaneous Applications challenging the admission of claims for disallowance of loss and bad debts by the assessee, as ... - Issues involved:1. Disallowance of loss and bad debts claimed by the assessee before ITAT.2. Filing of revised return by the assessee for assessment year 2003-04.Issue 1: Disallowance of loss and bad debts:The revenue filed a Miscellaneous Application (M.A.) challenging the ITAT's decision to admit the claim of the assessee for disallowance of loss and bad debts. The revenue alleged that the authorized representative of the assessee did not press these grounds before the CIT(A), leading to a misleading representation. The ITAT, after considering submissions from both sides, decided to set aside the matter and restore it to the file of the Assessing Officer for fresh consideration. The tribunal emphasized that the power under section 254(2) is limited to rectifying mistakes apparent on record and cannot be used to change decisions based on new arguments. The Supreme Court's ruling in Honda Siel Power Products v. CIT was cited to support the principle that the tribunal should rectify mistakes that cause prejudice to a party. Ultimately, the ITAT dismissed the M.A. filed by the revenue.Issue 2: Filing of revised return for assessment year 2003-04:In another case, the DCIT filed a Miscellaneous Petition stating discrepancies in the grounds mentioned by the assessee in the additional grounds for the assessment year 2003-04. The DCIT pointed out inaccuracies in the revised return filed by the assessee, including claims related to animation projects, software under production, and non-collectible loans. The ITAT found that the AO had completed the assessment without considering the revised return filed by the assessee. The tribunal, after examining the submissions and facts presented, decided to remit the matter back to the AO for fresh consideration in the interest of justice. The ITAT dismissed the M.A. filed by the revenue, emphasizing that the order passed was correct based on the facts presented during the proceedings.In conclusion, both the Miscellaneous Applications filed by the revenue were dismissed by the ITAT, upholding the decisions made in each case after careful consideration of the facts and legal principles involved.