TaxTMI 
TaxTMI 
2015 (11) TMI 270
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....9.112.2011 for the AY 2009-10, passed by the Ld. Assessing Officer, Range 38, New Delhi in rejecting the revised computation and disallowing the deduction of Rs. 22,05,025/- (Rs. 19,49,792/- u/s 43B & 2,55,233/- tax free interest otherwise allowable under the provisions of Income Tax Act, 1961. iii. On the facts & circumstances of the case, the Ld. CIT(Appeals)-XXVIII, New Delhi has erred in upholding the assessment order u/s 143(3) Dated 29.12.2011 for the AY 2009-10, passed by the Ld. Assessing Officer, Range 38, New Delhi in disallowance of deduction of Rs. 20,24,842/- on account of bad debts actually written off to party accounts. iv. On the facts & circumstances of the case, the Ld. CIT(Appeals)-XXVIII, New Delhi has erred in upholding the assessment order u/s 143(3) dated 29.12.2011 for the AY 2009-10, passed by the Ld. Assessing Officer, Range 38, New Delhi in additions of Rs. 7,03,654/- on account of difference of interest income shown by the appellant and reported in AIR. v. That the appellant craves leave for reserving the right to amend, modify, alter and/or forego any ground(s) of appeal at any time before or during the hearing of this appeal.....
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....ment of Hon'ble Supreme Court in the case of Goetz India Ltd Vs. CIT, 284 ITR 323. Being aggrieved, an appeal was filed before the learned CIT(A) who vide order dated 28th December, 2012 dismissed the appeal. Hence, the assesee is before us with the present appeal. 4. We shall now take up the appeal ground-wise. The first ground is general in nature and does not require any adjudication. 5. The second ground of appeal relates to the disallowance of deduction claimed of Rs. 19,49,792/- under Section 43b of the Act and tax free interest of Rs. 2,55,233/-. The Assessing Officer disallowed this claim on the ground that no revised return of income was filed but only revised computation of income was filed during the course of assessment proceedings. The Assessing Officer had not disputed the veracity of the claim. The appellant claimed sum of Rs. 19,49,792/- under the provisions of Section 43b on the ground that the bonus paid to the staff which was disallowed during the preceding year was claimed as deduction on payment basis under the provisions of Section 43b of the Act. The appellant further claimed exemption on tax free interest of Rs. 2,55,233/- which was by oversight of....
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....cannot stand the test of the law laid down by several High Courts. The Hon'ble Gujarat High Court in the case of CIT Vs. Mitesh Impex, 225 Taxman 168 (Gujarat) after review of entire law on the income, held as follows: "30. In what manner and to what extent, a ground, a legal contention or a fresh claim can be made at an appellate stage are vexed questions and have occupied the minds of the Courts in numerous occasions. 31. In the case of Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688 the Supreme Court noted with approval observation of the Court in the case of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 to the effect that "The Appellate Assistant Commissioner, therefore, has plenary powers in disposing of appeal. The scope of his power is co-terminus 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." It was observed that there was no reason why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income-tax Officer. The Act does not place any restriction or limitation on the exercise of appellate power. It was....
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....er of the assessing officer to entertain a claim for deduction otherwise than by filing a revised return. In the process the Supreme Court recognized that a new claim could not be entertained by the assessing officer without the assessee revising the return. While doing so it was clarified that:- "4. . . 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 Incometax Act, 1961. There shall be no order as to costs." 34. In the case of CIT v. Jai Parabolic Springs Ltd. [2008] 306 ITR 42/172 Taxman 258 (Delhi), the Delhi High Court held that there is no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arose in the matter and for just decision of the case. 35. In case of CIT v. Pruthvi Brokers & Shareholders (P.) Ltd. [2012] 349 ITR 336/208 Taxman 498/23 taxmann.com 23 (Bom.) the Bombay High Court considered the issue at considerable length and held that Commissioner (Appeals) as well as the Tribunal have the jurisdiction to consider the additional claim an....
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....ngs are not strictly speaking adversarial in nature and the intention of the Revenue would be to tax real income. 39. This is primarily on the premise that if a claim though available in law is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times to come, merely because it is raised for the first time before the appellate authority without resorting to revising the return before the assessing officer." 5.5 Thus, in the above cases, it has been held that new claims can always be made at any stage of appellate proceedings. The law laid down by Hon'ble Apex Court in the case of Goetz India Ltd (supra) is not applicable to the claim made either before Commissioner of Income Tax (Appeals) or Income Tax Appellate Tribunal. In the light of above pronouncement, the Hon'ble Gujarat High Court after reviewing the entire case law on this issue had clearly laid down "there is no bar to entertain new claim either by Commissioner of Income Tax (Appeals) or Income Tax Appellate Tribunal". Accordingly, respectfully following the above Rulings, we direct the Assessing Officer to allow this claim af....
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.... thereof has been written off as irrecoverable in the accounts for the purposes of this clause. [Explanation 1].-For the purposes of this clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee shall not include any provision for bad and doubtful debts made in the accounts of the assessee; [Explanation 2.-For the removal of doubts, it is hereby clarified that for the purposes of the proviso to clause (vii) of this sub-section and clause (v) of sub-section (2), the account referred to therein shall be only one account in respect of provision for bad and doubtful debts under clause (viia) and such account shall relate to all types of advances, including advances made by rural branches;] 36(1)(viia) in respect of any provision for bad and doubtful debts made by- (a) a scheduled bank [not being a bank incorporated by or under the laws of a country outside India or a non-scheduled bank or a cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, an amount not exceeding seven and one-half per cent] of the total income (computed before ....
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....investment corporation referred to in this sub-clause shall, at its option, be allowed in any of the two consecutive assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, of an amount not exceeding ten per cent of the amount of such assets shown in the books of account of such institution or corporation, as the case may be, on the last day of the previous year. Explanation.- For the purposes of this clause,- (i) "non-scheduled bank" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank; (ia) "rural branch" means a branch of a scheduled bank or a nonscheduled bank situated in a place which has a population of not more than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; (ii) "scheduled bank" means the State Ban....
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....o is limited in its application to bad debts arising out of the rural advances of banks. The provisions of Section 36(1)(viia) of the Act in no way control the application of the provisions of Section 36(1)(vii). The benefit of deduction under Section 36(1)(vii) should be allowed subject to the fulfillment of the conditions laid down under Section 36(2) of the Act. The provisions of Sections 36(1)(vii) and 36(1)(viia) of the Act are distinct and independent from each other. However, by virtue of the proviso to Section 36(1)(vii) of the Act, what is allowed as a provision for bad and doubtful debts under the provisions of Section 36(1)(viia) cannot be allowed under the provisions of Section 36(1)(vii). In the case in hand, the Assessing Officer denied the deductions under Section 36(1)(vii) solely on the ground that the bad debts which were written off were pertaining to the period when the income was exempt under the provisions of Section 80P of the Act and also on the ground that the deduction claimed under Section 36(1)(viia) is more than the deduction claimed under Section 36(1)(vii) of the Act. The reasoning of the Assessing Officer does not stand test of the law laid down by t....