TaxTMI 
TaxTMI 
2015 (7) TMI 1261
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.... appeal: "1. The Learned Commissioner of Income Tax (Appeals) (CIT(A)) has erred in confirming the disallowance made by the Assessing Officer (AO) in respect of provision for warranty of Rs. 45,60,347 on the grounds that there is no consistency in the formula on the basis of which provision is made and there is no reasonable basis behind making estimate for provision for warranty. 2. The Learned CIT (A) has erred in sustaining the action of the Learned AO in rejecting the claim for deduction of prior period expenses of Rs. 10,71,714 on the ground that the relief can be claimed only by 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." G....
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.... expenses are also recognized which satisfies matching concept. Thus, the assessee satisfies the conditions for allowance of provision i.e. obligation based on past experience, probability of outflow of resources and reliable estimate. Provision created at 2% of sales based on past experience and data is reasonable and allowable. Provision for warranty does not require actuarial valuation. Whenever, provision had been made for a particular assessment year in excess of actual expenses incurred in subsequent assessment year, the difference was again written back in subsequent 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 prov....
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....he revised return of income and claimed the deduction of such expenditure. Since, the assessee had failed to file the revised return of income within the time limit, the claim was to be rejected. The Ld. CIT(A) , therefore upheld the AO's order relying upon the decision of Hon'ble Supreme Court in the case of "Goetze India Ltd. vs. CIT" 284 ITR 323 . 8. Before us, the Ld. A.R. of the assessee has submitted that the assessee while filing the return of income for A.Y. 2007-08 did not claim deduction of Rs. 10,71,714/-. However, the AO at the time of passing the assessment order added back the same and reduced the returned loss by Rs. 10,71,714/-. Thus, addition of Rs. 10,71,714/- as prior period item amounted to double disallowance. The AO a....
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....ities but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. The appellate authorities have jurisdiction to deal not merely with additional grounds which became available on account of change of circumstances or law, but with additional grounds which were available when the return was filed but could not have been raised at that stage or the grounds which 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 b....