TMI Blog2021 (4) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... examining this aspect of the matter, observed, and in our view, incorrectly, that because an opportunity was not given to the AO to examine the material, therefore, the matter needed to be remanded to the AO for a fresh verification. Unless the Tribunal would have reached to a conclusion and expressed its clear view, in that respect, as to what was wrong or missing in the examination made by the CIT(A), a remand was not called for. We agree with Mr. Seth's contention that the CIT(A) in the exercise of its powers under Section 250(4) of the Act was entitled to seek production of documents and/or material to satisfy himself as to whether or not the deductions claimed were sustainable/viable in law. This was, however, a case where the details were placed before the AO, who declined to entertain the claims only on the ground that they did not form part of assessee's original return and that the assessee had not made a course correction by filing a revised return. This view was based, as noticed above, on the judgment of the Supreme Court rendered in Goetze (India) Ltd.[ 2006 (3) TMI 75 - SUPREME COURT] . The CIT(A), squarely, dealt with this and concluded, that a fresh cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the facts obtaining in the case and, in accordance with the law. Backdrop : 6. Before we proceed further, what is required to be noticed is the following broad facts: 6.1 The assessee claims that he is engaged in the business of manufacturing and assembling tractors and tractor components. 6.2 On 30.10.2007, the assessee filed the return qua AY 2007-2008 wherein it declared its taxable income as ₹ 147,83,25,740/-. Concededly, the assessee while filing its return of income had failed to claim the deduction both under Section 80JJAA of the Act and qua prior period expenses. Insofar as the deduction under Section 80JJAA of the Act was concerned, the amount was pegged at ₹ 1,07,33,164/- whereas insofar as deduction qua prior period expenses was involved, the amount was quantified at ₹ 51,21,024. These deductions were claimed by the assessee before the AO by way of a statement/communication dated 14.12.2009 filed with him. This statement, admittedly, was accompanied by a Chartered Accountant's report in the prescribed form [i.e., Form 10DA]. Furthermore, the details concerning prior period expenses were also provided by the assessee. 6.3 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ception to the procedure prescribed under sub-rules 1 to 3 of the said rule and that the said sub-rule empowered the CIT(A), to direct production of evidence, i.e., documents and witnesses, etc., for disposal of the appeal. 7.4. In support of his submission that the provision of Section 250(4) of the Act is distinct from the provisions contained in sub-rules 1 to 3 of Rule 46A of the Rules, Mr. Sethi placed reliance on the judgment of the Bombay High Court rendered in Smt. Prabhavati S. Shah v. CIT, [1998] 231 ITR 1 (Bombay) as also the judgment of the Orissa High Court rendered in B.L. Choudhury v. CIT, [1976] 105 ITR 371 (Orissa). 8. On the other hand, Mr. Ajit Sharma, who appears on behalf of the revenue, relied upon the order of the Tribunal as well as that of the AO. Mr. Sharma contended that sub-section 2 of Section 80JJAA of the Act, as it stood before its amendment via Finance Act, 2016 w.e.f. 01.04.2017 (clause b of sub-section 2 of section 80JJAA), mandated that no deduction could be claimed in respect of employment of new employees unless the assessee furnished, along with the return of income, the report of the accountant. Therefore, the contention advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 80JJAA of the Act, the assessee claimed a deduction amounting to ₹ 1,07,33,164/- while in respect of the prior period claim, the assessee claimed a deduction amounting to ₹ 51,21,024/-. The CIT(A), however, allowed the deduction qua prior period expenses, only to the extent of ₹ 25,40,305/-. The remaining amount was disallowed largely on the ground that expenses had been incurred to the extent of ₹ 24,78,391/- without deduction of withholding tax. There were also certain expenses of a cumulative value of ₹ 1,02,328/- which were disallowed, for the reason that they did not concern the period in issue, i.e., AY 2007-2008. 11. Therefore, it would be relevant, for the moment, to extract hereafter, what is it, that was put before the AO along with the statement/communication dated 14.12.2009: 1. Claim of deduction under section 80JJAA of ₹ 1,07,33,l64/- - this deduction is claimed on account of employment given to new workmen. The claim is duly supported with the report issued in Form 10DA read with Rule 19AB and duly certified by the chartered accountant. A copy of the report issued under section 80JJAA is also enclosed herewith fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this assessment year. Thus, on merit also the claim of the assessee fails. 8.4 In view of the above discussion, claim made by the assessee for deduction under section 80JJAA and prior period expenses is rejected. The assessee has also not been able to substantiate the claim of prior period expenditure. Therefore, claim of prior period expenditure is also fails on merit. 11.2. On the other hand, the CIT(A), as noticed above, after entertaining the two new claims, examined the same in great detail as is evident from the findings of fact returned in paragraphs 6.7.2 and 6.7.3. of the order of CIT(A). For the sake of convenience, the same are extracted hereafter: 6.7.2 Regarding the claim under section 80JJAA, the appellant filed before me, a copy of the audit report in prescribed form no. 1ODA, which was duly certified by Chartered Accountant. According to the same, the appellant had employed new regular workmen numbering 543 over and above the existing employees numbering 1262. The additional wages paid to the regular workmen by the appellant amounted to ₹ 3,54,57,213/-. The appellant had claimed 30% of the same in the current year as per section 80JJAA amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant was not in receipt of the vouchers raised by the employees at the time of filling of return of income, while the same pertained to the current year, the claim of ₹ 4,92,825/- in respect of the same, is accordingly allowed. However, certain bills such as bill for car MP3Player dated 30.06.2007 of ₹ 3,600/-, cost of mobile phone purchased on 16.08.2007 of Rs.l2,000/- and an amount of ₹ 75,274/- in respect of cost consumption claimed by various clients of the appellant by raising invoices on 31.08.2007 amounting to ₹ 75,274/- cannot be considered to be related to the current year. Further, Membership Fee and Subscription (advance) aggregating to Rs.ll,454/- on different dates on 04.07.2007, 14.11.2007 and 19.03.2008 also does not pertain to the current year, being advance in nature. Subject to the above, the appellant's claim in respect of expenses, which were not claimed during the current year while filing the return of income (but were shown as prior period expense in the computation of income of [the] assessment year 2008-09) amounting to ₹ 25,40,305/- (₹ 26,42,633 1,02,328) is held as allowable in the current year. [Emphasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self as to whether or not the deductions claimed were sustainable/viable in law. This was, however, a case where the details were placed before the AO, who declined to entertain the claims only on the ground that they did not form part of assessee's original return and that the assessee had not made a course correction by filing a revised return. 15.1. This view was based, as noticed above, on the judgment of the Supreme Court rendered in Goetze (India) Ltd. (Supra). The CIT(A), squarely, dealt with this and concluded, that a fresh claim could be entertained. Therefore, the Tribunal, as noticed above, has accepted this view of the CIT(A) and the revenue has not come up in appeal before us assailing this conclusion of the Tribunal. 16. In any event, we are of the view that, if a claim is otherwise sustainable in law, then the appellate authorities are empowered to entertain the same. This view finds reflection in a judgment of the coordinate bench of this Court dated 28.11.2011, passed in ITA No.1233/2011, titled CIT vs. Aspentech India Pvt. Ltd. The relevant observations made by the coordinate bench of this court, which are apposite, are extracted hereafter: 5. The I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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