The ACIT, Panchmahal Circle, Godhra V. M/s. Setco Automobiles Ltd., Panchmahal

ITA 2271/AHD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3661 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 16-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A KHAN SHRI NIRMIT MEHRA
• Keywords: Capital asset; Question of law; Revenue expenditure; Capital expenditure
• Section: 143(3); 80HHC; 37(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (THROUGH VIRTUAL COURT) BEFORESHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER SL. NO(S) ITA NO(S) ASSET. YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 2270/AHD/2018 2013-14 ASSISTANT COMMISSIONER OF INCOME TAX, PANCHMAHAL CIRCLE, CIVIL LINES ROAD, GODHRA-389001 M/S. SETCO AUTOMOBILES LTD., BARODA GODHRA HIGHWAY, KALOL, PANCHMAHAL-389330 PAN NO. AAACG7777K 2. 2271/AHD/2018 2014-15 ASSISTANT COMMISSIONER OF INCOME TAX, PANCHMAHAL CIRCLE, CIVIL LINES ROAD, GODHRA-389001 M/S. SETCO AUTOMOBILES LTD., BARODA GODHRA HIGHWAY, KALOL, PANCHMAHAL-389330 PAN NO. AAACG7777K REVENUE BY : SHRI M.S.A. KHAN, CITDR. ASSESSEE BY : SHRI NIRMIT MEHRA, AR / DATE OF HEARING : 21.10.2020 / DATE OF PRONOUNCEMENT : 10.11.2020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: BOTH T HE APPEALS HAVE BEEN FILED BY THE REVENUE FOR A.YS. 2013-14 & 2014-15WHICH ARE ARISING FROM THE ORDER OF THE CIT( A)-4,VADODARADATED 16.08.2018, IN THE PROCEEDINGS UNDER SECTION143(3) R.W.S 144C(3)& 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: 2 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 1. THE CIT(A) ERRED IN FACTS AND LAW IN DIRECTING AO TO ALLOW THE PRODUCT DEVELOPMENT EXPENSES AMOUNTING TO RS. 3,47,32,310/- , AFTER VERIFICATION, OVERLOOKING THE FACT THAT THE PRODUCT DEVELOPMENT EXPENSES WERE INC URRED FOR THE PURPOSE OF DEVELOPMENT OF NEW PRODUCTS AND THEREFORE THE BENEFIT OF THE EX PENDITURE EXTENDED TO SUCCEEDING YEARS AND HENCE THE EXPENSES WERE CAPITAL IN NATURE AND C OULD NOT BE ALLOWED AS REVENUE EXPENSES. 2. THE LEARNED CIT(A), ERRED IN ADMITTING FRESH ISS UE DURING THE APPELLATE PROCEEDINGS WHICH IS IN CONTRAVENTION TO THE RULE 46A, FURTHER THE ASSESSEE DID NOT CLAIM PRODUCT DEVELOPMENT EXPENSES AS DEDUCTION AT THE TIME OF CO MPUTING THE TOTAL INCOME, NEITHER CLAIMED AT THE TIME OF ASSESSMENT PROCEEDINGS, AS H E WAS OF THE VIEW THAT THESE ARE NOT ALLOWABLE EXPENSES BEING REVENUE IN NATURE. 3. THE ISSUES RAISED BY THE REVENUE IN GROUND NO. 1 AND 2 ARE INTERCONNECTED TO EACH OTHER. THEREFORE WE HAVE CLUBBED BOTH OF THE M TOGETHER FOR THE SAKE OF BREVITY AND CONVENIENCE. THE ISSUE RAISED BY THE REV ENUE IS THAT THE LEARNED CIT-(A) ERRED IN DIRECTING TO ALLOW THE DEDUCTION O F THE PRODUCT DEVELOPMENT EXPENSES AMOUNTING TO RS.3,47,32,310/- REPRESENTING CAPITAL EXPENSES, AS REVENUE EXPENDITURE IN VIOLATION OF THE PROVISIONS OF RULE 46A OF INCOME TAX RULE. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE P RESENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF AUTOMOTIVE PRODUCTS. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION FILED T HE RETURN OF INCOME DECLARING INCOME AT RS.84,10,370/- WHICH WAS ASSESSED UNDER S ECTION 143(3) R.W.S. 144C(3) OF THE ACT VIDE ORDER DATED 28 TH NOVEMBER 2016 AT RS.91,83,304/- AFTER MAKING THE ADDITION/DISALLOWANCE OF RS.7,72,934/-. 5. THE ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CI T-(A) AND CLAIMED THAT IT HAS INCURRED AN EXPENSE OF RS.3,47,32,310/- UNDE R THE HEAD PRODUCT DEVELOPMENT EXPENSES BUT OMITTED TO CLAIM THE DEDUC TION UNDER SECTION 37(1) OF THE ACT. ACCORDINGLY, THE ASSESSEE FIRST TIME MADE A FRESH CLAIM FOR THE DEDUCTION OF PRODUCT DEVELOPMENT EXPENDITURE BEFORE THE LEARN ED CIT-(A). 3 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 6. THE ASSESSEE BEFORE THE LEARNED CIT-(A) POINTED O UT THAT THERE IS NO DENIAL UNDER THE PROVISIONS OF THE ACT FOR MAKING T HE FRESH CLAIM DURING THE APPELLATE PROCEEDINGS. THE ASSESSEE IN SUPPORT OF HI S CONTENTION REFERRED TO THE ORDER OF THE HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. MITESH IMPEX&ORS (2014) 270 CTR 66 (GUJ)AND ORDER OF THE HONBLE BOMB AY HIGH COURT IN CASE OF CIT VS. PRUTHVI BROKERS & SHAREHOLDERS (2012) 349 ITR 336 (BOM). 7. THE ASSESSEE REGARDING ITS FRESH CLAIM OF RS.3,47 ,32,310/- SUBMITTED THAT SIMILAR DEDUCTION WAS ALSO MADE IN THE EARLIER YEAR S WHICH WAS ALLOWED BY THE ITAT IN ITA NOS. 1337 & 1339/AHD/2011 VIDE ORDER DAT ED 19 TH FEBRUARY 2016. ACCORDINGLY, THE ASSESSEE CONTENDED THAT NO CAPITAL ASSETS OR ANY BENEFIT OF ENDURING NATURE IS ARISING OUT OF THE IMPUGNED EXPE NSES. ACCORDINGLY, IT PRAYED TO THE LEARNED CIT-(A) TO ALLOW THE CLAIM OF THE ASS ESSEE. 8. THE LEARNED CIT-(A) ADMITTED THE FRESH CLAIM OF TH E ASSESSEE BY OBSERVING THAT THE APPELLATE AUTHORITIES HAVE BEEN EMPOWERED TO ENTERTAIN THE FRESH CLAIM MADE BY THE ASSESSEE WHICH WAS NOT MADE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS AFTER RELYING ON THE JUDGMEN T OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MITESH IMPEX&ORS(SUPRA) . 9. THE LEARNED CIT-(A) ON MERIT FOUND THAT SIMILAR CL AIM HAS ALREADY BEEN ALLOWED BY THE ITAT IN THE OWN CASE OF THE ASSESSEE IN THE EARLIER YEARS. ACCORDINGLY, THE LD. CIT-A DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE BUT AFTER QUANTIFICATION AND VERIFICATION OF THE EXPENS ES. 10. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT -(A) THE REVENUE IS IN APPEAL BEFORE US. 4 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 11. THE LEARNED DR BEFORE US SUBMITTED THAT CLAIM WA S NOT MADE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS THEREFOR E THE SAME CANNOT BE ALLOWED BY THE LEARNED CIT-(A) WITHOUT CALLING THE REMAND R EPORT UNDER THE PROVISIONS OF RULE 46A OF INCOME TAX RULE. 12. THE LEARNED DR ALSO SUBMITTED THAT THE IMPUGNED E XPENDITURE IS CAPITAL IN NATURE. IT IS BECAUSE THE BENEFIT OF SUCH EXPENSES WILL ARISE OVER A PERIOD OF TIME I.E. EXCEEDING THE PERIOD OF ONE YEAR. THUS, THE SA ME CAN BE ALLOWED AS DEDUCTION OVER A PERIOD OF TIME, THE ASSESSEE WILL ENJOY THE BENEFIT OF IT. THEREFORE, THE SAME CANNOT BE TREATED AS REVENUE IN NATURE. 13. ON THE OTHER AND THE LEARNED AR BEFORE US SUBMI TTED THAT THE ASSESSEE CAN MAKE A FRESH CLAIM BEFORE THE LEARNED CIT-(A) DESPI TE THE FACT THAT THE CLAIM WAS NOT MADE BY THE ASSESSEE IN THE RETURN OF INCOME. TH E LEARNED AR IN SUPPORT OF HIS CLAIM RELIED ON THE JUDGMENT REFERRED IN THE OR DER OF THE LEARNED CIT-(A). 14. THE LEARNED AR, ON THE MERIT CONTENDED THAT CLAI M OF THE ASSESSEE HAS ALREADY BEEN ALLOWED BY THE ITAT IN THE EARLIER YEAR S. THERE IS NO ANY CHANGE IN FACT AND CIRCUMSTANCES OF THE CASE IN HAND FROM THE CASE OF THE EARLIER ASSESSMENT YEARS. 15. BOTH THE LEARNED DR AND THE AR BEFORE US VEHEME NTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AS FAVOURABLE TO THE M. 16. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FIRST CONTROVERSY THAT ARISES BEFORE US FOR OUR ADJUDICATION WHETHER THERE WAS ANY VIOLATION OF THE PROVISIONS OF RULE 46A OF INCOME TAX RULE. ADMITTEDLY, THE ASSESSEE HAS MADE A FRESH CLAIM BEFORE THE LEARNED CIT-(A) WHICH WAS NOT MADE EITHER IN THE INC OME TAX RETURN OR BEFORE 5 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 THE AO DURING THE ASSESSMENT PROCEEDINGS. INCOME OF THE ASSESSEE HAS TO BE DETERMINED UNDER THE PROVISIONS OF ACT. IN CASE THE ASSESSEE UNKNOWINGLY OMITTED TO CLAIM THE DEDUCTION EITHER IN THE INCOME TAX RETURN OR DURING THE ASSESSMENT PROCEEDINGS IT IS ENTITLED CLAIM THE BEN EFIT OF SUCH DEDUCTION BEFORE THE HIGHER AUTHORITIES. IN HOLDING SO WE PLACE OUR RELIANCE ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. MITES H IMPEX&ORS (2014) 270 CTR 66 (GUJ)WHERE IT WAS HELD AS UNDER: 40. THEREFORE, ANY GROUND, LEGAL CONTENTION OR EVEN A CLAIM WOULD BE PERMISSIBLE TO BE RAISED FOR THE FIRST TIME BEFORE THE APPELLAT E AUTHORITY OR THE TRIBUNAL WHEN FACTS NECESSARY TO EXAMINE SUCH GROUND, CONTENTION OR CLAIM ARE ALREADY ON RECORD. IN SUCH A CASE THE SITUATION WOULD BE AKIN TO ALLOW ING A PURE QUESTION OF LAW TO BE RAISED AT ANY STAGE OF THE PROCEEDINGS. THIS IS PRE CISELY WHAT HAS HAPPENED IN THE PRESENT CASE. THE APPELLATE COMMISSIONER AND THE TR IBUNAL DID NOT NEED TO NOR DID THEY TRAVEL BEYOND THE MATERIALS ALREADY ON RECORD, IN ORDER TO EXAMINE THE CLAIMS OF THE ASSESSEES FOR DEDUCTIONS UNDER SECTIONS 80-I B AND 80HHC OF THE ACT. 41. IN THE DECISIONS THAT WE HAVE NOTED ABOVE, THE COU RTS HAVE CONSIDERED SUCH QUESTIONS WHEN A LEGAL CONTENTION OR A CLAIM WAS BA SED ON MATERIAL ALREADY ON RECORD BUT RAISED AT AN APPELLATE STAGE. ON SUCH PR EMISE WE WHOLEHEARTEDLY AGREE THAT THE APPELLATE AUTHORITY AND THE TRIBUNAL WOULD HAVE THE POWER TO ENTERTAIN ANY SUCH NEW GROUND, LEGAL CONTENTION OR CLAIM. HOWEVER , IT IS ONLY THE BOMBAY HIGH COURT IN THE CASE OF CIT V. PRUTHVI BROKERS & SHARE HOLDERS (P.) LTD. (SUPRA), WHICH HAS TRAVELLED A LITTLE BEYOND THIS PREPOSITION AND COME TO THE CONCLUSION THAT EVEN IF FACTS NECESSARY TO EXAMINE SUCH A CLAIM ARE NOT PLA CED BEFORE THE ASSESSING OFFICER AND, THEREFORE, NOT ON RECORD, THERE WOULD BE NO IM PEDIMENT IN THE COMMISSIONER (APPEALS) ENTERTAINING SUCH A CLAIM. SUCH AN ISSUE DOES NOT ARISE IN THESE APPEALS. WE WOULD, THEREFORE, RESERVE OUR OPINION ON THIS LI MITED ASPECT OF THE MATTER IF AND WHEN IN FUTURE THE QUESTION PRESENTS BEFORE US IN S UCH FORM. FOR THE PRESENT, WE ANSWER QUESTIONS (3) AND (4) AGAINST THE REVENUE AN D IN FAVOUR OF THE ASSESSEES IN MANNER DESCRIBED ABOVE. WE ALSO FIND SUPPORT AND GUIDANCE FROM THE ORDER O F THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. PRUTHVI BROKERS & SHAR EHOLDERS (SUPRA). THE RELEVANT FINDING OF THE COURT IS REPRODUCED AS UNDE R: FROM A CONSIDERATION OF DECISION OF THE SUPREME CO URT RENDERED IN THE CASE OF JUTE CORPN. OF INDIA LTD. V. CIT [1991] 187 ITR 688/[199 0] 53 TAXMAN 85 , IT IS CLEAR THAT AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE 6 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 AUTHORITIES, BUT IS ALSO ENTITLED TO RAISE ADDITION AL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION WHETHER OR NOT TO P ERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANNOT, HOWEVER, BE SAID THAT THEY HAVE NO JURIS DICTION TO CONSIDER THE SAME. THEY HAVE THE JURISDICTION TO ENTERTAIN THE NEW CLAIM. THEY M AY CHOOSE NOT TO EXERCISE THEIR JURISDICTION IN A GIVEN CASE IS ANOTHER MATTER. [PA RA 11] FURTHER THE OBSERVATION OF THE SUPREME COURT IN THE CASE OF JUTE CORPN. OF INDIA LTD. (SUPRA ) TO THE EFFECT 'IF THE GROUND SO RAISE D COULD NOT HAVE BEEN RAISED AT THAT PARTICULAR STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE.' OR 'THAT THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHA NGE OF CIRCUMSTANCES OR LAW,' DOES NOT CURTAIL THE AMBIT OF THE JURISDICTION OF THE APPELL ATE AUTHORITIES STIPULATED EARLIER. THEY DO NOT RESTRICT THE NEW/ADDITIONAL GROUNDS THAT MAY BE TAKEN BY THE ASSESSEE BEFORE THE APPELLATE AUTHORITIES TO THOSE THAT WERE NOT AVAILA BLE WHEN THE RETURN WAS FILED OR EVEN WHEN THE ASSESSMENT ORDER WAS MADE. THE APPELLATE A UTHORITIES, THEREFORE, HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GROUNDS, WHICH B ECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUND S WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE FIRST PART VIZ ., 'IF THE GROUND SO RAISED COULD NOT HAVE BEEN RAISED AT THAT PARTICULAR STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE.' CLEARLY RELATE TO CASES WHERE THE GROUND WAS AVAILA BLE WHEN THE RETURN WAS FILED AND THE ASSESSMENT ORDER WAS MADE BUT 'COULD NOT HAVE BEEN RAISED' AT THIS STAGE. THE WORDS ARE 'COULD NOT HAVE BEEN RAISED' AND NOT 'WERE NOT IN E XISTENCE'. GROUNDS WHICH WERE NOT IN EXISTENCE WHEN THE RETURN WAS FILED OR WHEN THE ASS ESSMENT ORDER WAS MADE FALL WITHIN THE SECOND CATEGORY VIZ., WHERE 'THE GROUND BECAME AVAI LABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW.' [PARAS 12 AND 13] 17. THE ASSESSEE, INDEED MADE A FRESH CLAIM BEFORE T HE LEARNED CIT-(A) BUT DID NOT FILE ANY FRESH DOCUMENTS. MOREOVER, THE LEA RNED CIT-(A) AFTER ADMITTING THE FRESH CLAIM DIRECTED THE AO TO ALLOW THE DEDUCT ION OF THE SAME AFTER VERIFICATION AND QUANTIFICATION OF THE EXPENSES. TH EREFORE, THE AO IS STILL EMPOWERED TO REJECT THE CLAIM OF THE ASSESSEE IF SU CH EXPENSES REPRESENTS THE CAPITAL EXPENDITURE WITHIN THE PROVISIONS OF LAW. A S SUCH, WE FIND THAT THERE WAS NO FRESH EVIDENCES AS ALLEGED BY THE REVENUE, WHICH WERE ENTERTAINED BY THE LEARNED CIT-(A) IN VIOLATION OF THE PROVISIONS OF RU LE 46A OF INCOME TAX RULE. ACCORDINGLY, WE HOLD THAT THERE WAS NO VIOLATION OF THE PROVISIONS OF RULE 46-A OF INCOME TAX RULES. 18. MOVING TO THE MERIT OF THE CASE. WE FIND THAT T HE ISSUE OF THE PRODUCT DEVELOPMENT EXPENSES HAS ALREADY BEEN SETTLED BY THE ITAT IN THE EARLIER 7 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 ASSESSMENT YEAR VIDE ITA NOS. 1337 & 1339/AHD/2011. THE RELEVANT EXTRACT READS AS UNDER: 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE ISSUE IS ABOUT ALLOWABILITY OF PR ODUCT DEVELOPMENT EXPENSES WHICH WERE HELD BY A.O. BE A CAPITAL IN NATURE. WE FIND THAT L D. CIT(A0 WHILE DECIDING THE APPEAL FOR A.Y. 2002-03 AND FOLLOWING IT HAS GIVEN A FINDING T HAT DUE TO INCURRING OF PRODUCT DEVELOPMENT EXPENSES, THE INSTALLATION CAPACITY DID NOT INCREASE AND ASSESSEE DID NOT SET UP A SEPARATE AND INDEPENDENT UNIT FROM MANUFACTURING AND NO CAPITAL ASSET WAS BROUGHT INTO EXISTENCE. HE HAS FURTHER HELD THAT ENTRIES IN THE BOOKS OF ACCOUNT WEE NOT DETERMINATIVE OF THE ALLOWABILITY OR OTHERWISE OF THE EXPENDITURE. B EFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDING OF LD. CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. C IT(A). 10. THUS, THE GROUND OF REVENUE IS DISMISSED. 19. THUS, WE ARE OF THE VIEW THAT SUCH PRODUCT DEVEL OPMENT EXPENSES ARE RECURRING IN NATURE. 20. WE ALSO NOTE THAT THE LD. DR HAS NOT BROUGHT AN YTHING ON RECORD SUGGESTING THAT THERE WAS ANY BENEFIT OF ENDURING N ATURE OR ANY NEW ASSETS COMING INTO EXISTENCE OUT OF SUCH EXPENSES. ACCORDI NGLY, WE HOLD THAT SUCH EXPENSES ARE OF REVENUE IN NATURE BUT SUBJECT TO VE RIFICATION OF THE AO AS HELD BY THE LEARNED CIT-(A). HENCE, WE UPHOLD THE FINDING O F THE LEARNED CIT-(A). THUS, THE GROUND OF APPEAL OF THE REVENUE IS DISMISS ED. 21. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. COMING TO ITA NO. 2271/AHD/2018 RELEVANT TO A.Y. 20 14-15:- 22. THE REVENUE HAS RAISED FOLLOWING GROUND:- 1. THE CIT(A) ERRED N FACTS AND LAW IN DIRECTING A O TO ALLOW THE PRODUCT DEVELOPMENT EXPENSES AMOUNTING TO RS. 3,72,39,500/- , AFTER VERIFICATION, OVERLOOKING THE FACT THAT THE PRODUCT DEVELOPMENT EXPENSES WERE INC URRED FOR THE PURPOSE OF DEVELOPMENT OF NEW PRODUCTS AND THEREFORE THE BENEFIT OF THE EX PENDITURE EXTENDED TO SUCCEEDING YEARS AND HENCE THE EXPENSES WERE CAPITAL IN NATURE AND C OULD NOT BE ALLOWED AS REVENUE EXPENSES. 8 ITA NOS. 2270&2271/AHD/2018 AY: 2013-14&2014-15 2. THE LEARNED CIT(A), ERRED IN ADMITTING FRESH ISS UE DURING THE APPELLATE PROCEEDINGS WHICH IS IN CONTRAVENTION TO THE RULE 46A, FURTHER THE ASSESSEE DID NOT CLAIM PRODUCT DEVELOPMENT EXPENSES AS DEDUCTION AT THE TIME OF CO MPUTING THE TOTAL INCOME, NEITHER CLAIMED AT THE TIME OF ASSESSMENT PROCEEDINGS, AS H E WAS OF THE VIEW THAT THESE ARE NOT ALLOWABLE EXPENSES BEING REVENUE IN NATURE. 23. AT THE OUTSET, WE FIND THAT THE FACTS OF THE CA SE ON HAND ARE SIMILAR TO FACTS OF THE IN ITA NO. 2270/AHD/2018 RELEVANT TO A.Y. 20 13-14 WHICH HAS BEEN DECIDED BY US IN THE FAVOUR OF THE ASSESSEE VIDE PA RAGRAPH NOS. 16 TO 20 OF THIS ORDER. ACCORDINGLY, WE HOLD THAT THE FINDING IN THE ABOVE MENTIONED PARAGRAPHS WILL BE MUTATIS MUTANDIS APPLY IN THE CASE ON HAND. FOR DETAIL DISCUSSION REFER THE RELEVANT PARAGRAPH. THUS, THE GROUND OF APPEAL OF T HE REVENUE IS DISMISSED. 24. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 25. IN THE COMBINED RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 10 TH NOVEMBER,2020 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) VICE PRESIDENT ( WASEEM AHMED ) ACCOUNTANT MEMBER AHMEDABAD; DATED 10/11/2020 TANMAY, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. !! ' # / CONCERNED CIT 4. ' # ( ) / THE CIT(A)- 5. &'() **+ , , / DR, ITAT, AHMEDABAD. 6. ),- ./ / GUARD FILE. / BY ORDER, & * //TRUE COPY// / ! ( DY./ASSTT. REGISTRAR) ! '# $, &' / ITAT, AHMEDABAD