TMI Blog2021 (8) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... action of the Ld. CIT(A) to entertain the claim of assessee which was inadvertently omitted by the assessee while filing return of income is in order and is in the spirit of the CBDT Circular No. 114XL 35 of 1955 dated 11.04.1955 which says that the department should not take advantage of the assessee s ignorance and even if the assessee offers income which is not taxable, then the AO is duty bound to tax only the legitimate income. The assessee had been consistently following the same method from AY 2007-08 in respect of expenses relating to warranty and the department has accepted the same. So, taking into consideration these facts also, and coupled with the fact that the AO having accepted that in this relevant assessment year, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of this ground of appeal as noted by the AO at pages 8 and 9 of his order is that the assessee did not claim the deduction of ₹ 12,26,74,120/- in its return of income. However, it claimed deduction during the assessment proceeding by filing a letter dated 19.12.2017 and the contents of the letter he reproduced at para 6 of page 8 of his order; and from a perusal of the same it is revealed that the assessee company created provision for warranty relating to sale of electrical items during the relevant years. According to the assessee, the provision for warranty is not claimed in the year of creation. And the payment made against the warranty provision is claimed only in the year of payment. According to the assessee, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 74,876/- of the preceding assessment year i.e. AY 2014-15 should be allowed while computing the income for the relevant AY 2015-16. And for consideration of this claim took support of the Hon ble Supreme Court decisions which upheld the rule of consistency and also cited the CBDT Circular No. 114XL 35 of 1955 dated 11.04.1955 which says that the department should not take advantage of the assessee s ignorance and even if the assessee offers income which is not taxable, then the AO is duty bound to tax only the legitimate income. However, the plea of the assessee was not entertained by the AO who cited the decision of the Hon ble Supreme Court in the case of Goetz (India) Ltd. Vs. CIT 284 ITR 323 (SC) and has held that since assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO has not allowed the same while stating that there is no provision in the I.T. Act, 1961, allowing the assessee to make an amendment in the return of income by modifying as application at the assessment stage without revising the return of income. The decision of the Supreme Court of India in the case of Goetze (India) Ltd vs. CIT in 284 ITR 323 (SC) [2006] was referred. Since the assessee has not filed its claim by filing a revised return of income, the claim submitted as above is not applicable. The AR of the appellant has also filed certificate showing amount of provision for warranty created and not claimed since assessment year 2007-08 to assessment 2016-17 and the same is placed at (Page No. 167 of Paper Book). The AO has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue is in appeal before us. 7. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee has made the payment of ₹ 12,26,74,120/- on account of warranty expenses which fact has been accepted by the AO by observing in his own words assessee had increased its income for AY 2014-15 by provision for warranty ₹ 12,83,74,876/-. Out of such provision, assessee paid ₹ 12,26,74,120/- in AY 2015-16. The assessee did not reduce the income for AY 2015-16 by the amount of warranty provision paid ₹ 12,26,74,120/- out of provision disallowed in AY 2014-15. So, the AO accepted the fact that the assessee has paid ₹ 12,26,74,120/- in the relevant assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) Ltd. (supra) has held as under: The decision in question is that the power of the Tribunal under section 254 of the Incometax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. 9. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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