1990 (5) TMI 82 - AT - Income Tax

Summary

Issues:
Claim for deduction under section 35B in re-assessment proceedings under section 147(b)

Analysis:
The appeal before the Appellate Tribunal ITAT Jaipur revolved around the claim for deduction under section 35B in the re-assessment proceedings under section 147(b) initiated by the Income-tax Officer. The main contention of the assessee was that it could raise a claim for deduction during the re-assessment proceedings, specifically regarding the interest on the "Export Packing Credit A/c." The CIT(A) had directed the ITO to examine the matter afresh after accepting an additional ground, which the department did not challenge before the Tribunal. The assessee argued that the claim was valid on merits and had been accepted in a previous year by the Tribunal.

The Departmental Representative (DR) supported the tax authorities' orders, arguing that the claim had already been processed under section 35B during the original assessment proceedings and could not be re-agitated in the re-assessment proceedings. The DR also highlighted that the effect of re-assessment did not wipe off the entire original assessment order, citing relevant case laws to support this position.

Upon examining the submissions and orders, the Tribunal found the grounds raised by the assessee to be misconceived. It was revealed that the claim for interest on packing credit had been made during the original assessment proceedings itself, contradicting the assessee's claim of it being a new item. The Tribunal referred to relevant observations of the Rajasthan High Court and Andhra Pradesh High Court regarding the re-agitation of claims in re-assessment proceedings. The Tribunal concluded that the claim had already become final in the original assessment proceedings and could not be reagitated in the re-assessment proceedings.

The Tribunal also interpreted the CIT(A)'s direction in the re-assessment proceedings order, stating that it was to examine the claim on merits, which meant in accordance with the provisions of law. The ITO rightly held that the claim was not tenable as it had already been considered in the original assessment proceedings. The Tribunal emphasized that claims finalized in the original assessment and appellate proceedings could not be reagitated in re-assessment proceedings. It clarified that it was not expressing any views on raising fresh claims during re-assessment proceedings but emphasized that finalized claims could not be re-agitated.

In conclusion, the Tribunal dismissed the appeal, upholding the decision that claims already finalized in the original assessment and appellate proceedings could not be reagitated in re-assessment proceedings.