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2021 (8) TMI 75 - AT - Income TaxDeduction claimed during the assessment proceeding by filing a letter - disallowance of warranty expenses as the assessee did not claim the deduction in its return of income - disallowing the additional claim by filing an application made by the assessee during the course of assessment - whether the assessee without making a claim for deduction in its return of income, claim the same without filing revised return of income? - HELD THAT:- It is settled position of law that the Ld. CIT(A) enjoys plenary and co-terminus powers as that of AO and even has the authority to enhance the assessment. So the action of the Ld. CIT(A) to entertain the claim of assessee which was inadvertently omitted by the assessee while filing return of income is in order and is in the spirit of the CBDT Circular No. 114XL 35 of 1955 dated 11.04.1955 which says that the department should not take advantage of the assessee’s ignorance and even if the assessee offers income which is not taxable, then the AO is duty bound to tax only the legitimate income. The assessee had been consistently following the same method from AY 2007-08 in respect of expenses relating to warranty and the department has accepted the same. So, taking into consideration these facts also, and coupled with the fact that the AO having accepted that in this relevant assessment year, the assessee has made actual payment out of the provision created for warranty expenses for AY 2014-15, the Ld. CIT(A) has rightly admitted new claim of warranty expenses actually paid by the assessee and allowed the same, which does not require any interference from our part and, therefore, we confirm the same and dismiss the appeal of the revenue.
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