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2012 (10) TMI 1200 - AT - Income TaxRectification of mistake u/s 254(2) - Assessee-company has opined that certain mistakes were apparent from record in the assessment order and such mistakes should be accordingly rectified. (i) Development Expenses - Assessee- company s portion of the expenditure was allowed as revenue expenditure by AO in previous year. It is requesting for allowing the similar deduction this year also - HELD THAT - Details of total expenditure incurred towards new product development were mentioned in assessee s books but it has not filed any details of revenue expenditure hence same could not be allowed. Thus AO is directed to verify the claim made by the assessee in this regard and if any portion of the expenditure is found to be revenue-nature same may be allowed. ii) Disallowance u/s 40(a)(ia) - (i) Assessee submitted that amount involved was Rs. 9.42 crores not Rs. 9.42 lakhs as mentioned in the order - HELD THAT - Submission made by the AR is factually correct. It is directed that operative part should be read as Rs. 9.42 Crores . - Decision in favour of Assessee. (ii) Order of the CIT(A) Nasik was not considered while deciding the disallowance u/s 40a(ia) . During the assessment proceedings AO found that in the case of Nasik Unit there was a default with regard to provisions of TDS. He observed that TDS AO had passed an order u/s 194C r.w.s.20(1) and 201(1)A. It was further mentioned that the CIT(A) had confirmed the order of the TDS AO. The assessee approached the Tribunal. The ITAT in its order remitted the matter back to the file of the CIT(A) - HELD THAT - Claim made by the assessee is factually correct- CIT(A) Nasik had vide its order had accepted the claim of the assessee-company. Thus such claim should be considered. Decision in favour of Assessee. iii) TDS on Service Coupon Commission - As per the assessee that issue with regard to section 194 C of the Act was not adjudicated upon and matter was remitted back to AO - HELD THAT - As far as s. 194C is concerned full facts about the service coupon commission were not available on the file and hence matter should be restored back to the file of the AO. Decision given with regard to dealers Incentive Scheme (194H) cannot be imported for deciding the issue of service coupon commission (194C). Both do not operate in the same fields. There is no mistake apparent from record with regard to remitting back the matter to the file of the AO. Submissions made by the assessee-company about service coupons stand rejected. Matter restored back. iv) Acceptance of New Claim not made before AO - Assessee forget to claim deduction u/s 35 and such claim was not made before AO - HELD THAT - AO directed to allow the claim made for deduction u/s. 35 of the Act after verification of the evidences produced by the assessee-company. Assessee is directed to file the details of expenditure before the AO. Decision in the case of COMMISSIONER OF INCOME TAX. CENTRAL-I VERSUS M/S. PRUTHVI BROKERS SHAREHOLDERS PVT. LTD. 2012 (7) TMI 158 - BOMBAY HIGH COURT relied upon where it was held that the Assessee is entitled to raise not merely additional legal submissions before the appellate authorities 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. They have the jurisdiction to entertain the new claim. The exercise of discretion is entirely different from the existence of jurisdiction .
Issues Involved:
1. Claim for development expenses in respect of compact project for tractors. 2. Disallowance made under Section 14A of the Income-tax Act. 3. Disallowance made under Section 40a(ia) of the Income-tax Act. 4. Deduction under Section 35(2AB) of the Income-tax Act. 5. Disallowance related to service coupons and financial subvention charges. 6. Disallowance amounting to Rs. 1349.89 Crores under Section 40a(ia) of the Income-tax Act. 7. Additional claims under Ground Nos. 21 & 22. Issue-wise Detailed Analysis: 1. Claim for Development Expenses: The assessee-company pointed out a mistake regarding Ground No.2 related to development expenses for a compact project for tractors. The Tribunal acknowledged that a portion of such expenses was allowed as revenue expenditure in the previous assessment year (A.Y. 2006-07). However, for A.Y. 2007-08, the assessee did not provide sufficient details to substantiate the claim. The Tribunal directed the Assessing Officer (AO) to verify the claim and allow any portion found to be revenue in nature. 2. Disallowance under Section 14A: The assessee contended that Ground No.8, related to disallowance under Section 14A, was not pressed and should be dismissed. The Tribunal agreed and clarified that since the ground was not pressed, it should be treated as dismissed. 3. Disallowance under Section 40a(ia): The assessee pointed out a typographical error in the amount mentioned under Ground No.12, which should be Rs. 9.42 Crores instead of Rs. 9.42 lakhs. The Tribunal corrected this and reiterated that the issue was decided in favor of the assessee, allowing the appeal with respect to Ground No.12. 4. Deduction under Section 35(2AB): The assessee claimed that the names of Nasik and Kandivili units were swapped in the order. The Tribunal confirmed that the claim for Nasik R&D Unit was allowed, and the claim for the Kandivali Unit would be allowed upon approval from DSIR, following the precedent set in A.Y. 2006-07. 5. Disallowance related to Service Coupons and Financial Subvention Charges: Regarding Ground No.14, the Tribunal addressed a typographical error and clarified the incomplete sentence. The Tribunal rejected the assessee's submission that the issue of service coupons under Section 194C was not adjudicated. The Tribunal maintained that the matter needed to be re-examined by the AO. Additionally, the Tribunal directed the AO to verify the claim related to financial subvention charges amounting to Rs. 8,22,74,390/- and adjust the tax liability accordingly. 6. Disallowance amounting to Rs. 1349.89 Crores under Section 40a(ia): The Tribunal acknowledged that the CIT(A) Nasik had accepted the assessee's claim regarding TDS compliance. Consequently, the Tribunal modified its order to reflect that no default was committed by the assessee concerning TDS, deciding Ground No.16 in favor of the assessee. 7. Additional Claims under Ground Nos. 21 & 22: The assessee argued that the Tribunal dismissed Ground Nos. 21 & 22 based on the Supreme Court's decision in Goetze (India) Ltd. but overlooked the jurisdictional High Court's ruling in Pruthvi Brokers & Shareholders Pvt. Ltd., which allowed new claims before appellate authorities. The Tribunal, respecting the High Court's decision, directed the AO to allow the claims under Section 35 after verification and to consider the details of expenditure provided by the assessee. Conclusion: The Tribunal partly allowed the miscellaneous application filed by the assessee-company, addressing the various issues raised and directing the AO to verify and adjust claims as necessary. The order was pronounced in the open court on 3rd October 2012.
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