Appellate claim for section 32AC deduction can be admitted on record facts, but eligibility still needs merits-based verification.

A fresh claim for deduction under section 32AC(1A) may be entertained at the appellate stage if the relevant facts are already on record, and once an additional ground is admitted it cannot be rejected merely because it was not made in the original or revised return or because of delay. The appellate authority must then examine the statutory conditions on merits. However, where the record does not clearly verify that the assets are new and that the acquisition and installation requirements are satisfied, final allowance cannot be granted without further factual verification. The matter was therefore restored for fresh examination and decision in accordance with law.

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Issues: Whether the assessee's fresh claim for deduction under section 32AC(1A) could be entertained at the appellate stage and whether the rejection of the claim on the ground of delay and alleged inability to verify the conditions was sustainable.

Analysis: The additional ground had been admitted by the first appellate authority, and once admitted, the claim had to be examined on merits. The appellate power was not barred merely because the claim was not made in the original or revised return, provided the relevant facts were on record. Rejection solely on the basis of lapse of time or the assessee's conduct was not sustainable after admission of the ground. At the same time, the record did not contain a clear and specific finding that all statutory conditions for allowance under section 32AC, including the character of the assets as new assets and satisfaction of the installation and acquisition requirements, stood fully verified. The remand material was found insufficient for a final adjudication on eligibility.

Conclusion: The assessee's fresh claim was held to be maintainable in appellate proceedings, but the matter was restored to the Assessing Officer for fresh verification and decision on merits in accordance with law.

Ratio Decidendi: A statutory claim raised for the first time in appellate proceedings may be entertained if the relevant facts are already on record, and once such a claim is admitted it cannot be rejected merely on delay without a merits-based verification of the statutory conditions.

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