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2016 (7) TMI 702 - ITAT MUMBAI

2016 (7) TMI 702 - ITAT MUMBAI - TMI - Denial of deduction u/s. 36(1) (viii) - FAA rejected the claim made by the assessee, that in the AY 2012-13, in similar circumstances the CPC had accepted the claim made by the assessee - Held that:- FAA is empowered to entertain a new claim, even if a fresh return of income is not filed by the assessee . It is also a fact that for the subsequent year the CPC has allowed the similar claim of deduction made by it. Therefore, we are of the opinion that in the .....

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. The effective ground of appeal is about denial of deduction of ₹ 1. 42 Crores, u/s. 36(1) (viii)of the Act. Brief Facts : 2. Assessee-bank filed its return of income on 28. 09. 2011, declaring income of ₹ 24. 91 Crores. As per the acknowledgement generated, on return electronically transmitted, the income was same. Central Processing Center (CPC)vide its intimation issue u/s. 143(1)of the Act, determined the income of the assessee at ₹ 27. 12 Crores. Thus, there was differenc .....

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₹ 2. 20 Crores was arising on account of deduction u/s. 36(1)(viii) of the Act (Rs. 1. 42 Crores)and double disallowance of investment depreciation allowance(Rs. 78. 93 lakhs). The AO while completing the assessment did not accept both the claims for the reason that supporting documents were not filed by the assessee . 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA). Before him, the assessee reiterated the facts which had bee .....

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igure and had requested to take the figure at ₹ 24, 91, 05, 826/- as against the figure of ₹ 26. 92 crores, shown in the original return, that such a change in data was not accepted because it did not match with the other relevant data already filed for the purpose of arriving at the net profit from the business/profession, that a perusal of the columns of the e-return revealed that there was no specific claim made u/s. 36(1)(viii), that no deduction was claimed in the relevant colum .....

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he relief to the assessee. 4. During the course of hearing before us, the Authorised Representative (AR) contended that deduction u/s. 361)(viii) was allowable to a co-operative bank to the extent of 25% of the income assessed under the head business or profession if it was carried to the reserve account, that in the e-return of income there was no separate column for specifying the deduction u/s. 36(1)(viii) to the amount carried to special reserve, that the only column provided was title, tran .....

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he adjustment was on account of denial of deduction u/s. 36(1)(viii), that an application filed by the assessee for rectification intimation was revised and the original returned income was accepted (Pg-115-118 of the PB), he relied upon the case of Pruthvi Brokers and Shareholders Pvt. Ltd. (349ITR336), of the Hon'ble Bombay High Court. The Departmental Representative(DR)argued that the assessee had not filed a revised return for the new claim, that the AO had rightly negated the claim. 5. .....

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ng the Act is to tax the income and collect due taxes for State Exchequer. For collecting the taxes and assessing the income, procedure has been laid down. It is true that without following a certain procedure, no system can work. But, the procedure cannot take place of substance. The Act contain provisions that deal with assessment, re-assessment and rectification of mistakes/revision of orders etc. The basic purpose of all these exercises is that Sovereign is not deprived of its share of taxes .....

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procedure, as interpreted by the officers, did not allow the correction of mistake. The stand taken by the AO and the CPC resulted in non adjudication of an issue that would have been decided, had there been no CPC. We are unable to understand as to whether the computerisation is meant for making the life of a common taxpayer easier or to complicate the assessment procedure. Leaving the discussion behind, we would like to hold that the stand taken by the FAA cannot be endorsed. As an appellate a .....

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