TaxTMI 
TaxTMI 
2026 (4) TMI 1117
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....the learned CIT(A) erred in not appreciating that the Jurisdictional Assessing Officer, on a without prejudice basis after due verification of details and documents, confirmed the said investment in new plant and machineries amounting to Rs 127,42,59,177/- during the relevant period vide his Remand report dated 06.09.2024. 1.3. Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned CIT(A) erred in not allowing statutorily eligible fresh claim made by the appellant for the first time during the appellate proceedings u/s 32AC of Rs 19,11,38,877/- being 15% of the aggregate amount of actual cost of the new plant and machinery eligible u/s 32AC(1A). 2. The primary grievance of the Assessee concerns not considering on merit its additional claim for investment allowance under Section 32AC(1A) of the Income-tax Act, 1961 (hereinafter "the Act"), amounting to Rs.19,11,38,877/-. 3. Briefly stated, facts of the case are that the assessee company is engaged in the business of manufacturing conductors, cables and transformer oil. It filed its return of income on 30.11.2015 declaring total income of Rs.44,66,55,710....
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....,482 19,30,18,861 53,78,63,343 33,61,79,686 19,03,60,435 52,65,40,121 7,89,81,018 MARINE CABLES - 15,52,492 - - 15,52,492 15,52,492 2,32,874 RABALE UNIT 6,71,74,218 4,19,39,873 10,91,14,091 6,71,74,218 4,19,39,873 10,91,14,091 1,63,67,114 SILVASSA OIL 75,51,585 1,27,32,423 2,02,84,008 75,51,586 1,27,32,423 2,02,84,009 30,42,601 TOTAL RS : 80,40,36,759 58,07,78,545 1,38,32,62,812 71,47,60,138 55,94,99,039 1,27,42,59,177 19,11,38,877 3.3 The assessee relied on the various decisions in its support that claim before the Ld. First Appellate Authority can be made for first time. The Ld. CIT(A) relying on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. (1998) 229 ITR 383 (SC), decision of the Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. v. CIT & Another 187 ITR 688 (SC) and decision of Hon'ble Supreme Court in Goetz India Ltd. v. CIT (2006) 284 ITR 323 (SC)admitted the additional claim of the assessee for adjudication observing as under: 7.2.2.5. As per the foregoing case laws, fresh claim can be m....
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....chedule only reveals whether the claim of additions to fixed assets is recorded or not. Indeed no assessee blindly claims depreciation on additions to fixed assets unless such additions are recorded in the assets/depreciation schedule irrespective of whether such assets are installed in the P&M. Recording the new assets in assets schedule is obviously a necessary condition. But that alone does not prove that the new assets were brought into existence especially, when the Government grants additional benefit of deduction. The assessee should not eliminate the chances of verification by the Government, by not claiming the deduction u/s. 32AC initially in the original Rol or even in revised Rol, but claiming after a long lapse of time in appeal process. The fact of installation new assets on ground cannot be checked from the Depreciation Schedule (both as per Companies Act and I-T Act) which gives only the information whether the additions to Fixed Assets were recorded or not in the Balance Sheet. However, what cannot be and could not be verified nearly after 4-1/2 years by the FAA when the appellant filed the additional ground for fresh claim or nearly after 9 years by the AO in rema....
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....een acquired in FY 2014-15 had been substantially used by the end of these years (2024/2019). Everything has time value. Similarly, the claim too should have time value. Moreover, by not claiming deduction u/s. 32AC in the original return of income the assessee escaped from the CASS guidelines as well. 7.2.5. Infeasibility of checking the conditions u/s. 32AC: Whether it is feasible to check the conditions of Sec.32AC after admission of fresh claim through additional ground of appeal? No: If admitted, does it automatically mean the fresh claim of deduction is to be allowed? No, not necessarily, especially in factual matters of fresh claims. The fresh claim of deduction can be granted only on physical examination of the conditions laid down u/s. 32AC. Whether these conditions can be examined by the AO after a lapse of 4-1/2 years from 31.03.2015 and after a lapse of nearly 9 years during the remand proceedings? It is impossible to make a time travel into past so as to check whether the conditions laid down u/s. 32AC were fulfilled by the assessee or not. 7.2.6. Moreover, every action and reaction in a lawful country has limitation. The Limitation Act of 19....
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....t claimed by oversight. iv. If the Tax Auditor in F.Y.2014-15 and the present Tax Auditor are the same, then reasons should be adduced by the Tax Auditor as to what prevented them from advising you to claim deduction u/s. 32AC in the return of income for A.Y.2015-16. In this regard, a letter under the signature of the" 7.2.7.1 In response to the above letter, the appellant replied on 11.07.2025. The relevant portion of the reply is reproduced hereunder: 2. Reg, fresh claim u/s 32AC: Sr. No. Details sought by your honour Our submission (i) The details of the Tax Auditor who carried out the tax audit for this A.Y.alongwith CA Membership No. and address details. CA Firm Name: PARAS SHETH & ASSOCIATES Firm reg. No. 107418W Name of Tax Auditor: Shri PARAS A. SHETH Proprietor, M. No, 031600 Address: 201-F, Runwal & Omkar E-Square, Opp. Sion Chunabhatti Signal, Sion (East.), Mumbai 400022. (ii) Please submit audit notes given by the Tax Auditor after completion of the tax audit for A.Y.2015-16. 1. Please note that as stated earlier, while finalizing and filing both the return of income for A.Y.2015-16, due to oversight, a l....
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....s Act and SEBI andother related enforcements afford to have oversight in making claims intime? Such a hugely belated claim seems to be a well thought-out design. To err is human but to design an error is unpardonable. 7.2.8. In the light of the foregoing discussion, though the additional ground has been admitted but the fresh claim for deduction u/s. 32AC is rejected. Therefore, the additional ground is dismissed." 4. Before us, the Ld. counsel for the assessee submitted that the Ld. CIT(A) had called for the remand report from the Assessing Officer on the admissibility as well as eligibility of the claim of the assessee. He submitted that the Assessing Officer in said remand report though objected for admission of the additional claim of the assessee but as far as verification of the claim is considered, the Assessing Officer had duly verified the claim. The Ld. Counsel for the assessee filed a copy of the remand report and referred to paragraphs 4 and 5 of the said remand report. 4.1 The Learned Counsel for the Assessee argued that once a ground is admitted, it must be decided on the strength of the evidence. He pointed out that the Assessing Officer (AO),....
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....o use or not, already stands verified and no further verification of installation was required to be examined by the Certified Engineer. The Ld. counsel further submitted that identical claim has been allowed by the Ld. CIT(A) in the assessment year 2017-18 that too after completion of the assessment and without examining from the Certified Engineer. 4.5 On the contrary, the Ld. Departmental Representative (DR) submitted that the claim was filed after lapse of the substantial period and the source of the investment was not verified by the Assessing Officer in the remand proceedings even. The Ld. DR referred to the decision of the Co-ordinate Bench of Pune in the case of ITO v. Jagtap Patil Promoters & Builders reported in [2023] 147 taxmann.com 199 (Pune-Trib.) wherein it is held that no deduction u/s 80IB shall be allowed if the deduction is not claimed in the return of income. The Ld. DR further relied on the decision of the Hon'ble Supreme Court in the case of PCIT v. Wipro Ltd. [2022] 140 taxmann.com 223 (SC). He also relied on the decision of the Hon'ble Bombay High Court in the case of EBR Enterprises v. Union of India [2019] 107 taxmann.com 220 (Bombay). 5. We have hea....
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....6 16,08,32,845 20,89,74,411 36,98,07,256 5,54,71,088 SILVASSA CONDUCTOR 10,44,27,033 8,25,17,942 18,69,44,975 6,71,74,218 8,12,94,834 14,84,69,052 2,22,70,358 UNFLEX CABLES 8,54,87,696 2,51,63,834 11,06,51,530 7,58,47,587 2,26,44,571 9,84,92,158 1,47,73,824 E BEAM 34,48,44,482 19,30,18,861 53,78,63,343 33,61,79,686 19,03,60,435 52,65,40,121 7,89,81,018 MARINE CABLES - 15,52,492 - - 15,52,492 15,52,492 2,32,874 RABALE UNIT 6,71,74,218 4,19,39,873 10,91,14,091 6,71,74,218 4,19,39,873 10,91,14,091 1,63,67,114 SILVASSA OIL 75,51,585 1,27,32,423 2,02,84,008 75,51,586 1,27,32,423 2,02,84,009 30,42,601 TOTAL RS : 80,40,36,759 58,07,78,545 1,38,32,62,812 71,47,60,138 55,94,99,039 1,27,42,59,177 19,11,38,877 5. Also, the assessee has uploaded the copies of 157 bills in 909 pages on the ITBA System along with details of plant and machinery, date of bill, items purchased, delivery challan, installation and commissioning of machineries, etc. The assessee also stated that all payments for plant and machinery ....
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....ger feasible. In our considered view, such an approach cannot be sustained in law. Where a claim is supported by documentary evidences and is otherwise capable of verification, it cannot be rejected solely on the ground of lapse of time. 5.5 Further, the reasoning adopted by the learned CIT(A) suffers from a manifest inconsistency. If, in his view, the delay in raising the claim or the alleged conduct of the assessee rendered the matter unfit for adjudication, the proper course would have been to decline admission of the additional ground. Having exercised discretion to admit the claim, it was incumbent upon the learned CIT(A) to examine the same on merits in accordance with law and could not be subsequently rejected solely on the basis of "delay" or "design. Admission of the ground necessarily implies condonation of delay and the claim cannot thereafter be rejected on the very grounds which stood implicitly waived. Once the door to adjudication is opened, the claim must be tested against the statutory requirements of Section 32AC and can't be dismissed on the very procedural grounds that were waived during admission. 5.6 We also note that, although the Assessing Officer in t....