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TMI Blog2012 (11) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon by the learned AO under the facts and in the circumstances of the appellant's case; (3) The authorities below are not justified in not considering the income from house property at Rs. 6,65,710/- ad declared by the appellant in his revised return of income under the facts and in the circumstances of the appellant's case; (4) the authorities below are not justified in not allowing the claim of Rs. 15,567/- and Rs. 6,167/- towards interest on car loan on Zen and Ford Fiesta Car and Rs.95,665/-towards depreciation on cars under the facts and in the circumstances of the appellant's case; & (5) The authorities below are not justified in assessing the appellant on the short term capital gain of Rs. 22,66,195/-as against the loss of Rs. 8,47,805/- claimed by the appellant under the facts and in the circumstances of the appellant's case. 4. Briefly stated the facts are as follows:- The assessee is an individual. He is deriving income from house property and from the business of real estate. For the year under consideration, the assessee filed the e-return on 29/2/2008 declaring an income of Rs.29,49,560/-, which consisted of the following:- (i) Income from house property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evised return. The CIT(A) concluded that in view of the above said judgments of Supreme Court, the assessee could only claim additional expenditure by way of revised return under section 139(5) and when the original return is not filed within the time prescribed under section 139(1) or 139(2), the assessee cannot file a revised return under section 139(5) of the Act. 7. The assessee being aggrieved is in appeal before us. 8. The submission of the learned AR on various points are summarized as under: (i) that the assessee is a co-owner, having 50% share and interest in the properties at (i) RR Plaza, 8th Main, 3rd cross, Vasanthnagar; and (ii) RR Chambers, 11th Main of Vasanthnagar and in his original return a sum of Rs. 2,90,500/- being his share of Corporation taxes was claimed as deduction as against Rs. 2,71,423/- and with a view to rectify this anomaly, a revised return of income was filed; - Likewise, a deduction of Rs.11,24,300/- was claimed in the original return as against the correct figure of Rs.11,54,274/-being his share of interest on capital borrowed for construction. A certificate to this effect from the Karnataka Bank was furnished before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was, further, contended that the legal effect of the transaction was that of the assessee alone as he was the owner of the property and, thus, he had to offer the entire capital gain in respect of sale after claiming deduction of the amount paid to Shri Gupta towards his share of sale proceeds. According, the assessee had revised the computation of short term capital which had resulted in a short term capital loss of Rs. 8,47,805/-; & (iv) that the AO ought not to have rejected the aforesaid bonafide claims made by the assessee; and that the AO as well as the CIT (A)ought to have considered the revised computation of income and the rejection of the same on the ground that the assessee was not competent to revise the return of income was unjustified. 9. Per contra, the learned DR submitted that the assessee is not authorized to make claim of deduction without filing a revised return. For this proposition, the learned DR relied on the judgment of the Apex Court in the case of Goetze (India) Ltd. (supra). It was submitted that the original return was filed belatedly on 29/2/2008, hence, the revised return was filed on 28/7/2009 under section 139(5) of the Act cannot be taken c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs". 10.2 In view of Explanation 5 to section 32(1), the Assessing Officer was duty bound to grant depreciation allowance, whether the same is claimed by the assessee or not, provided the conditions mentioned under section 32 are satisfied. The controversy could be examined from another angle. No doubt, the revised return cannot be taken cognizance of since the original return was filed belatedly. However, an additional claim could be made before the appellate authority and the appellate authority is duty bound to consider the same. There are number of judgments which clearly establish that the assessee is entitled to raise additional grounds, not merely in terms of legal submissions but in respect of new claim not made in the return filed. 10.3 The Hon'ble Supreme Court in the case of Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688 was considering the following facts:- For the assessment year 1974-75, the appellant did not claim any deduction of its liability towards purchase tax under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provisions. In the absence of any statutory provision the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO". [Emphasis supplied]. It is clear, therefore, that an 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 hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it clear that for the purpose of enhancement, the Appellate Assistant Commissioner cannot travel beyond the proceedings which were originally before the Income Tax Officer or refer to new sources of income which were not before the Income Tax Officer at all. For this purpose, there are other separate remedies provided under the Income-tax Act". 10.5 The Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 was considering a case where the assessee had deposited its funds not immediately required by it on short term deposits with banks. The interest received on such deposits was offered by the assessee itself for tax and the assessment was completed on that basis. Even before the Commissioner of Income-tax (Appeals), the inclusion of this amount was neither challenged by the assessee nor considered by the Commissioner of Income-tax (Appeals). The assessee filed an appeal before the Tribunal. The inclusion of the amount was not objected to even in the grounds of appeal as originally filed before the Tribunal. Subsequently, the assessee by a letter raised additional grounds to the effect that the said sum could not be included in the total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax (Appeals). Both the assessee as well as the Department has a right to file an appea1/crossobjections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier." 10.6 The Hon'ble Supreme Court in the case of Goetze (India) Ltd. (supra) relied on by the CIT is distinguishable on the facts. The question before the Court was whether the appellant-assessee could make a claim for deduction, other than by filing a revised return. After the return was filed, the appellant sought to claim a deduction by way of a letter before the Assessing Officer. The claim, therefore, was not before the appellate authorities. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Act to make an amendment in the return of income by modifying an application at the assessment stage without revising the return. The Commissioner of Income-tax (Appeals) allowed the assessee's appeal. The Tribunal, however, allowed the department's appeal. In the Supreme Court, the assessee relied upon the judgment in National Thermal Power Co. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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