TaxTMI 
TaxTMI 
2019 (1) TMI 284
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial is unsustainable and required to be deleted. The additional ground raised by the assessee reads as under : "On the facts and in the circumstances of the case, whether the addition made by recomputation of the total income at Rs. 3,03,50,780/- is outside the scope of assessment u/s 143(3) r.w.s. 153A in as much as the proceedings for A.Y.2010- 2011 stood finalized on 6.1.2015 i.e. the date of search and further the recomputation of total income was made without reference to any seized material." After hearing both the parties, since the additional ground is purely related to the legal issue and no enquiry required to be made, the additional ground raised by the assessee is admitted for adjudication. 3. In this case, the assessee filed the return of income originally for the A.Y.2010-11 on 30.09.2010 declaring total income of Rs. 67,08,152/-. Subsequently, search u/s 132 was carried out in this case and a notice u/s 153A was issued by the AO. In response to the notice issued u/s 153A, the assessee filed the return of income declaring nil income on 28.11.2015 and no claim was made u/s 80IA of the Act. According to the assessee, for the A.Y.2010-11, the business income resulte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the consumption of husk expenditure @10%. The AO rejected the assessee's contention for consumption of husk expenditure @10% and estimated the expenditure of husk at 55% of total consumption as attributable to captive power plant and accordingly recomputed the total income at Rs. 3,03,50,780/-. 5. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee placing reliance on the observations of Hon'ble ITAT, Mumbai in Sirova Developers (2017) 162 ITD 718 and Section 80AC of the Act and held that the assessee is ineligible for deduction/s 80IA, having not made the claim in the return filed u/s 139(1) and in the return filed u/s 153A. The CIT(A) upheld the order of the AO in disallowing the deduction u/s 80IA. With regard to the alternate ground of the assessee on additions made without incriminating material during the course of search, the Ld.CIT(A) observed that the AO did not make any addition, it is the assessee who has claimed the deduction during the assessment proceedings which was rejected by the AO and accordingly upheld the order of the AO. 6. Aggrieved by the order of the Ld.CIT(A), the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore the due date. In the instant case, the assessee had filed the return of income within the due date allowed u/s 139(1) of the Act, but not claimed the deduction u/s 80IA. In the return filed in response to notice u/s 153A, the return was filed showing 'Nil' income due to wrong calculation which shows that the claim was not made due to no taxable income. On realizing that there was a mistake in calculation and the revised computation resulted in taxable income, the profit from the unit entitled for deduction u/s 80IA, was claimed as deduction and filed all the necessary documents required for allowing the deduction along with the revised return. The question is whether the AO is permitted to allow the additional claim made by the assessee during the assessment proceedings or not. Since the AO takes up the case for scrutiny for understatement of income, the AO is not empowered to entertain the fresh claim which goes to reduce the returned income, otherwise than by revised return. However, in the instant case, the assessee filed the return of income declaring nil income and the revised return filed during the assessment proceedings also resulted in nil income after the deduction u/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d not make the claim in the return of income. If the assessee do not claim the deduction for some reason or the other during the block period of 10 years, the assessee would not be entitled to postpone and claim the deduction in the subsequent assessment years after completion of block period of 10 years, thus, the assessee would loose the benefit forever. Therefore, if there is no choice for postponement of the deduction in the subsequent years, it is mandatory for both revenue as well as the assessee to claim deduction or to allow the deduction. In the instant case, when the return was filed in response to notice u/s 153A, the assessee did not claim the deduction since the taxable income as per the computation of income was zero. If the scrutiny assessment results in to positive income it is obligation on the part of the AO to allow all the statutory deductions including the deduction u/s 80IA for arriving the taxable income. However in this case during the pendency of proceedings, when it has come to the notice of the assessee that there was taxable income, the assessee itself had claimed the deduction and was entitled for deduction u/s 80IA. The assessee made the claim before t....