TMI Blog2018 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... not be said to be a bonafide omission. The depreciation of leased assets having not been specifically claimed, the assessee was entitled to claim business expenditure, of the lease rent, which they had not claimed in the return. There was no such expenditure shown in the Profit Loss Account. The learned Counsel specifically refers to the balance sheet as produced by the assessee, along with the audit report to contend that the rent outflow is specifically indicated there. That would not facilitate a consideration of the issue as a bona fide omission; since the claim was not raised due to sheer negligence and it had not even figured in the profit and loss account. It was not the subject matter of assessment. This is not a case which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed. In the first appeal, a further contention was taken that the lease rent paid by the assessee with respect to certain equipment was not claimed as expenditure. A claim for allowance of business expenditure to the extent of the lease rent paid was made before the First Appellate Authority. The First Appellate Authority and the Tribunal declined to consider the same relying on the decision in Goetze (India) Ltd . The learned Counsel also places reliance on the judgment dated 30.05.2018 of this Court in ITA No.96/2010 (C.I.T v. M/s Malayala Manorama Co.Ltd. ) 3. Kedarnath is relied on to contend that the assessee's entitlement to a particular deduction will depend on the provision of law relating thereto and not the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is any item of income or claim for deduction, which is not processed by the Income Tax Officer, it would not be a part of the subject matter of assessment and the Appellate Assistant Commissioner would not have the power to consider and process it in an appeal preferred by the assessee. The High Courts view on the facts in the cited case, that though the deduction was not claimed, the fact remains that the portion of income was brought to tax and hence clearly forms the subject matter of assessment, did not find favour with the Hon'ble Supreme Court. Rejecting the assessee's claim under Section 84 for the same having not been a subject matter of assessment, the Hon'ble Supreme Court held so: What consideration by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a claim. We therefore hold that on the facts of this case, the question referred to the High Court should have been answered in the negative. (underlining by us for emphasis) 5. NTPC Ltd. was a case in which the interest income on short term deposit was offered for assessment and assessed. On second appeal before the Tribunal, an additional ground was raised that the offer made for assessment of the interest income was an erroneous admission. The Hon'ble Supreme Court found that the Tribunal could have answered the issue under Section 254 of the Act. In Malayala Manorama Co.Ltd. with respect to an ascertained amount, deduction was claimed under Section 37, as business expenditure, which was disallowed in assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut flow is shown in the balance sheet. For not having raised the claim, the explanation is that under the Companies Act, the depreciation on both owned assets and leased assets could be claimed, while under the Income Tax Act, depreciation claim is permissible only on the owned assets. However, it is to be noticed that the appellant was quite conscious of the fact that there could be no depreciation claimed on leased assets under the Act since no such claim was made in the returns filed. Hence, the claim not having been raised cannot be said to be a bona fide omission. The depreciation of leased assets having not been specifically claimed, the assessee was entitled to claim business expenditure, of the lease rent, which they had not claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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