ACIT, New Delhi V. M/s. Jubilant Foodworks Ltd., New Delhi

ITA 2952/DEL/2012

• Counselvise Citation: 295220114 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 13-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Keywords: Rectification of order; Revised return; Capital expenditure
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH : JUDICIAL MEMBER ITA NO. 2952/DEL/2012 ASSTT. YR: 2006-07 ACIT, CIRCLE 4(1), VS. JUBILANT FOODWORKS LTD., NEW DELHI. (FORMERLY KNOWN AS DOMINOS PIZZA IN DIA LTD.), 1517, 15 TH FLOOR, DEVIKA TOWER, 6, NEHRU PLACE, NEW DELHI. PAN: AABCD 1821 C AND ITA NO. 3781/DEL/2012 ASSTT. YR: 2006-07 JUBILANT FOODWORKS LTD., VS. ACIT, CIRCLE 4(1), (FORMERLY KNOWN AS DOMINOS PIZZA INDIA NEW DELHI . LTD.), NEW DELHI. ( APPELLANT ) ( RESPONDENT ) DEPARTMENT BY : SHRI S.N. BHATIA DR ASSESSEE BY : SHRI VIKAS SRIVASTAVA ADV.; SHRI MAYANK AGGARWAL CA & MS. ADITI GOYAL CA DATE OF HEARING : 05-08-2014 DATE OF ORDER : 07-08-2014. O R D E R THESE CROSS-APPEALS PREFERRED BY THE DEPARTMENT AS WELL AS THE ASSESSEE, ARE DIRECTED AGAINST THE ORDER DATED 17-4 -2012 PASSED BY THE LD. CIT(A)-XIII, NEW DELHI, IN APPEAL NO. 2876/08-09, R ELATING TO A.Y. 2006- 2 07. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BE ING DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. REVENUES APPEAL ( ITA NO. 2952/DEL/2012) : 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY WAS CARRYING ON BUSINESS OF MANUFACTURING AND SALE OF PIZZA FROM IT S RETAIL OUTLET. IT HAD FILED ITS RETURN OF INCOME ON 26-11-2006 WHICH WAS SUBSEQ UENTLY REVISED DECLARING NET TAXABLE INCOME OF RS. 5,04,88,797/-, WHICH HAD BEEN ADJUSTED AGAINST BROUGHT FORWARD LOSS OF EARLIER YEARS CLAIM ED BY THE ASSESSEE RESULTING IN NIL TAXABLE INCOME. THE ASSESSING OFFI CER NOTICED THAT IN SCHEDULE 13 TO THE P& L A/C THE ASSESSEE COMPANY HA D CLAIMED DEDUCTION OF RS. 3,21,51,264/- ON ACCOUNT OF FRANCHISE FEES. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO HOW SUCH HUG E PAYMENT MADE TO M/S DOMINOS PIZZA INTERNATIONAL, INC., USA WAS JUSTIFI ED AND WHY THE SAME SHOULD NOT BE DISALLOWED IN VIEW OF THE DECISION IN THE CASE OF CIT VS. SOUTHERN SWITCHGEAR LTD. 148 ITR 272, BEING IN THE NATURE OF CAPITAL EXPENDITURE. THE ASSESSEE VIDE ITS SUBMISSIONS DATE D 15-12-2008 REITERATED WRITTEN SUBMISSIONS PLACED BEFORE THE LD. CIT(A) IN ASSESSEES OWN CASE FOR A.Y. 2003-04 ON THE SIMILAR ADDITIONS MADE IN THE Y EAR, WHICH WAS PENDING ADJUDICATION BY LD. CIT(A). THEREFORE, THE ASSESSIN G OFFICER FOLLOWING THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F SOUTHERN SWITCHGEAR 3 LTD. (SUPRA), HELD THAT 25% OF TECHNICAL FEE HAD TO BE TAKEN AS CAPITAL EXPENDITURE AND AS SUCH COULD NOT BE ALLOWED AS REV ENUE EXPENDITURE. HE, ACCORDINGLY, DISALLOWED RS. 80,37,816/-, TREATING T HE SAME AS CAPITAL IN NATURE. 2.1. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE AS SESSEE HAD ENTERED INTO AN AGREEMENT WITH THE FRANCHISOR ON 27-3-1995 FOR D EVELOPMENT OF DOMINOS PIZZA STORES IN INDIA (HEREINAFTER REFERRE D TO AS THE AGREEMENT). IN TERMS OF THE AGREEMENT, THE ASSESSEE HAD THE RIG HT TO USE THE TRADEMARK, DOMINOS NAME AND LOGO AND EXCLUSIVE LICENSE TO DEV ELOP AND OPERATE A COMMISSARY AND TO PREPARE, PROCESS, PRODUCE AND DIS TRIBUTE THE PRODUCTS THROUGHOUT THE EXCLUSIVE TERRITORY FOR WHICH A RECU RRING PAYMENT ON THE BASIS OF SALES WAS TO BE MADE. IT WAS FURTHER CLARIFIED T HAT FRANCHISOR HAD IN NO WAY TRANSFERRED ANY ABSOLUTE RIGHT IN MARKS, DOMINO S NAME AND LOGO TO THE ASSESSEE FOR EXCLUSIVE USE WITHIN THE TERRITORY. TH E AGREEMENT WAS EXECUTED FOR 15 YEARS AND COULD BE RENEWED FOR A SUBSEQUENT PERIOD OF 0 YEARS. THE ASSESSEE WAS REQUIRED TO MAKE TWO TYPES OF PAYMENT S TO FRANCHISOR AS PER CLAUSE 4 OF THE AGREEMENT - (I) TECHNICAL AND CONSULTANCY FEES ONE TIME LUMP SUM OF US$ 200000 FOR GRANTING EXCLUSIVE LICENSE TO USE THE DO MINOS NAME, MARK, SYSTEM AND LOGO, RELATED KNOW HOW AND TECHNIC AL 4 KNOWLEDGE. THIS AMOUNT WAS ALREADY CAPITALIZED IN T HE BOOKS OF A/C OF THE ASSESSEE. (II) FRANCHISEE/ MARKETING FEE FOR CONTINUING USE OF DOM INOS NAME, LOGO ETC. WAS PAYABLE @ 3% ON ASSESSEES STORE AND 3% ON SUB- FRANCHISE STORE ON THE BASIS OF QUANTUM OF MONTHLY SALES. THE FRANCHISOR HAD THE RIGHT TO INSPECT THE PIZZAS AND OTHER FOODS PRODUCTS PREPARED BY THE ASSESSEE DURING THE TENURE OF THE AGREEMENT. THE FRANCHISOR HAD TO PROVIDE THE REQUIS ITE ADVERTISEMENT MATERIAL THAT IT HAD DEVELOPED IN THE US AND REQUIRED THE ASSESSEE TO ADHERE TO THE GLOBAL STAN DARDS AND OPERATING PROCEDURES ADOPTED BY THE FRANCHISOR DURI NG THE TENURE OF THE AGREEMENT. 2.2. LD. CIT(A) AFTER CONSIDERING THE ENTIRE AGREEM ENT IN DETAIL ALLOWED THE ASSESSEES CLAIM, RELYING ON FOLLOWING DECISION : - CIT VS. J.K. SYNTHETICS LTD. 309 ITR 371; - CIT VS. SHARDA MOTOR INDUSTRIAL LTD. 319 ITR 109; A ND - CLIMATE SYSTEMS INDIA LTD. VS. CIT 319 ITR 113. 3. AT THE OUT SET LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF THE ITAT IN ASS ESSEES OWN CASE FOR A.Y. 2003-04 TO 2005-06 (ITA NOS. 183, 184, 185 & 1 86/DEL/2011 DATED 24-10-2012), WHEREIN THE ITAT HAS CONCURRED W ITH THE FINDINGS OF LD. CIT(A), OBSERVING AS UNDER: WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATER IAL ON RECORD AS WELL AS RELEVANT PROVISIONS OF LAW AND FI ND THAT CIT(A) HAS CONSIDERED EACH AND EVERY ASPECT OF THE MATTER BEFORE ARRIVING AT THE CONCLUSION AS DRAWN BY HIM. HE HAS ELABORATELY DISCUSSED EACH AND EVERY ISSUE IN AN 5 APPROPRIATE MANNER SPECIFYING ALL THE RELEVANT DETA ILS. NEITHER ANY CONTRARY MATERIAL HAD BEEN PLACED ON RE CORD BY THE DEPARTMENT NOR NOTICED BY THIS BENCH WHICH C OULD CONVINCE US TO TAKE A DIFFERENT VIEW THAN TAKEN BY LD. CIT(A). AS SUCH, WHILE CONCURRING WITH THE FINDING AND CONCLUSION AS DRAWN BY LD. CIT(A) ON THE FIRST LIMB OF THIS ISSUE, WE UPHOLD HIS ORDER AND DISMISS THE APPEAL O F THE REVENUE FOR THE FIRST LIMB OF THE ISSUE INVOLVED. 3.1. CONSISTENT WITH THE VIEW TAKEN IN EARLIER YEA RS, WE UPHOLD THE FINDING OF LD. CIT(A) WHO HAS RELIED ON VARIOUS DEC ISIONS OF HONBLE DELHI HIGH COURT AND IT IS NOT DISPUTED THAT THE AS SESSEE HAD ACQUIRED ONLY ACCESS TO THE TECHNICAL INFORMATION AND THERE WAS NO TRANSFER OF OWNERSHIP WITH RESPECT TO THE PROCESS AND THE KNOW- HOW UNDER THE AGREEMENT IN FAVOUR OF THE ASSESSEE. THEREFORE, THI S PAYMENT COULD ONLY BE CATEGORIZED AS ONE MADE ON REVENUE ACCOUNT. 4. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED. ASSESSEES APPEAL : (ITA NO. 3781/DEL/2012) 5. THE ASSESSEE HAS RAISED AS MANY AS 7 GROUNDS OF APPEAL. HOWEVER, THE ONLY EFFECTIVE GROUND REQUIRING ADJUDI CATION IS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DENYING THE APPELLANT TO REDUCE RS. 1,45,20,000 FROM THE TAXABLE INCOME IN T HE HANDS OF THE APPELLANT THEREBY ALLOWING DOUBLE TAXA TION OF THE SAME INCOME IN TWO DIFFERENT ASSESSMENT YEARS. 5.1. BEFORE LD. CIT(A) THE ASSESSEE HAD SUBMITTED T HAT ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH COCA COLA INDIA PVT. LTD. (CCIPL) ON 6 9-1-2001 FOR CARRYING OUT JOINT PROMOTIONAL AND MAR KETING ACTIVITY FOR A PERIOD OF 5 YEAR. IN A.Y. 2001-02, THE ASSESSEE REC OGNIZED AN AMOUNT OF RS. 25,01,683/- AS INCOME BY REDUCING THE EXPENS ES FROM ADVERTISEMENT EXPENSES. HOWEVER, THE ASSESSING OFFI CER IN HIS ORDER U/S 143(3) FOR A.Y. 2001-02 HELD THAT SINCE THE AMOUNT RECEIVED FROM CCIPL WAS TO BE UTILIZED IN THE NEXT 5 YEARS, 1/5 TH OF THE TOTAL AMOUNT I.E. 1.60 CRORES SHOULD HAVE BEEN OFFERED TO TAX DU RING A.Y. 2001-02 AND, ACCORDINGLY, MADE AN ADDITION OF RS. 1,34,98,0 00/-. THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO UPHELD THE A SSESSMENT ORDER AND CONFIRMED THE ADDITION. THEREAFTER ASSESSEE DID NOT CONTEST THIS ADDITION AND DID NOT FILE ANY APPEAL BEFORE THE ITA T. 5.2. THE ASSESSEE FURTHER POINTED OUT THAT BY THE T IME THE DECISION OF LD. CIT(A) WAS RECEIVED BY THE ASSESSEE, INCOME-TAX RETURNS FOR A.Y. 2003-04 AND 2003-04 HAD ALREADY BEEN FILED. THUS, T HIS DECISION WAS GIVEN EFFECT TO BY OBTAINING RECTIFICATION ORDER U/ S 154 OF THE I.T. ACT FOR THESE TWO ASSESSMENT YEARS I.E. FOR A.Y. 2002- 03, VOLUNTARILY OFFERING AN AMOUNT OF RS. 1,96,00,436/-; AND FOR A. Y. 2003-04 RS. 1,25,60,325/-. AS FAR AS AY 2004-05 WAS CONCERNED, THE NECESSARY ADJUSTMENT HAD BEEN MADE IN THE COMPUTATION OF INCO ME WHILE FILING INCOME-TAX RETURN OF RS. 94,99,332/-. FOR A.Y. 2005 -06 ALSO ADJUSTMENT OF RS. 14,80,000/- WAS MADE WHILE FILING INCOME-TAX RETURN. THUS, FROM AY 2001-02 TO A.Y. 2005-06 THE TOTAL SUM OF RS. 7,99,99,683/- HAD BEEN OFFERED FOR TAXATION. THE AS SESSEE FURTHER CLARIFIED THAT SINCE ASSESSEE HAD BEEN ABLE TO SPEN D ONLY RS. 1,18,44,922/- BY THE A.Y. 2003-04, THEREFORE, IN JU LY 2003, A REVISED 7 AGREEMENT HAD BEEN ENTERED INTO FOR UTILIZING THE A MOUNT REMAINING FROM THE SUM INITIALLY RECEIVED FROM CCIPL FOR JOIN T PROMOTION AND MARKETING ACTIVITY IN THE SUBSEQUENT FIVE YEARS. AF TER DELIBERATION, BOTH THE PARTIES AGREED ON THE BASIS OF WHICH THE ASSESS EE WAS ENTITLED TO SPEND THE REMAINING BALANCE TO THE NEXT FIVE YEARS I.E. TILL JULY 2008. THE ASSESSEE FURTHER POINTED OUT THAT TILL AY 2005- 06 ASSESSEE HAD SPENT ONLY 3,28,65,590/- AND THE BALANCE AMOUNT WAS STILL OUTSTANDING IN THE BOOKS OF A/C TILL JULY 2008. THUS, THE POSIT ION IN BOOKS OF A/C WAS DIFFERENT FROM THE ACTUAL AMOUNTS OFFERED FOR TAXAT ION. SINCE THE ENTIRE AMOUNT OF RS. 8 CRORE HAD BEEN ADJUSTED AGAINST THE ADVERTISEMENT EXPENSES BY AY 2005-06, THE ASSESSEE WAS NOT REQUIR ED TO OFFER ANY FURTHER SUM IN AY 2006-07. HOWEVER, UNDER MISTAKEN CONCEPTION THE ASSESSEE REDUCED THE ADVERTISEMENT EXPENSES FOR A.Y . 2006-07 BY RS. 1,45,20,000/-. THE ASSESSEE HAS FURTHER POINTED OUT THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE BROUGHT THESE FACTS TO THE KNOWLEDGE OF THE ASSESSING OFFICER VIDE ITS SUBMISS ION DATED 15-12- 2008. HOWEVER, THE ASSESSING OFFICER IGNORED THE SU BMISSIONS, WHICH RESULTED IN DOUBLE TAXATION OF RS. 1,45,20,000/-. A CCORDINGLY, THE ASSESSEE SUBMITTED THAT THIS AMOUNT MAY BE DELETED . 5.3. LD. CIT(A), HOWEVER, REJECTED THE ASSESSEES P LEA, INTER ALIA, OBSERVING THAT THE MATTER WAS REFERRED TO THE ASSES SING OFFICER VIDE OFFICE LETTER DATED 14-12-2010 FOR HIS COMMENTS. TH E ASSESSING OFFICER VIDE HIS REMAND REPORT DATED 2-2-2012 STATED THAT T HE CLAIM OF THE ASSESSEE THAT IT HAD REQUESTED THE ASSESSING OFFICE R FOR THE BENEFIT OF RS. 1,45,20,000/- OUT OF ITS INCOME FOR WHICH REQUEST W AS PLACED BEFORE THE 8 ASSESSING OFFICER ON 15-12-2008, WAS NOT SUPPORTED BY THE RECORD. IT WAS POINTED OUT THAT THERE WAS NO REQUEST DATED 15- 12-2008 TO THIS EFFECT. ONLY ONE SUBMISSION ON 15-12-2008 REGARDING JUSTIFICATION FOR ALLOWANCE OF PRIOR PERIOD EXPENSES OF RS. 1,12,03 7/- WAS FILED AND THERE WAS NO OTHER LETTER. HE FURTHER POINTED OUT T HAT SINCE ASSESSEE HAD NOT FILED ANY REVISED RETURN OF INCOME FOR CLAIMING RELIEF OF RS. 1,45,20,000/-, THEREFORE, IN VIEW OF THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. 284 ITRE 32 3 (SC), THE ASSESSEE WAS NOT ENTITLED FOR THE RELIEF. 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS FILE D A DETAILED CHART EXPLAINING HOW THE SUM OF RS. 8 CRORES RECEIVED FRO M CCIPL TOWARDS CARRYING OUT THE JOINT PROMOTION AND MARKETING ACTI VITY HAD BEEN ADJUSTED AGAINST ADVERTISEMENT EXPENSES INCURRED BY THE ASSESSEE BETWEEN AYS 2001-02 TO 2005-06. 6.1. LD. COUNSEL REFERRED TO PAGE 12 OF THE PB, WHE REIN LETTER DATED 15-12-2008 ADDRESSED TO ITO, WARD 10(4), NEW DELHI IS CONTAINED, IN WHICH IT WAS POINTED OUT THAT DURING THE CURRENT AS SESSMENT YEAR DUE TO WRONG UNDERSTANDING OF FACTS THE SAME SUM WHICH HAD ALREADY BEEN TAXED IN THE PREVIOUS YEARS HAD BEEN REDUCED FROM T HE ADVERTISEMENT EXPENSES BY RS. 145.20 LACS RESULTING IN OVER REPOR TING OF INCOME BY RS. 145.20 LACS. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE RECORD OF THE CASE. LD. CIT(A) HAS PRIMARILY DENIE D THE ASSESSEES CLAIM BECAUSE THE ASSESSEE HAD NOT FILED REVISED RE TURN OF INCOME, RELYING ON THE DECISION IN THE CASE OF GOETZE INDI A LTD. (SUPRA). WE 9 FIND THAT IN THE SAID DECISION ITSELF HONBLE SUPRE ME COURT HAS MADE IT CLEAR THAT THE ISSUE DECIDED IN THE SAID CASE WAS L IMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DID NOT IMPINGE ON THE POWER OF THE ITAT U/S 254. MERE NON FILING OF REVISED RETURN CANNOT O VER RIDE THE SUBSTANTIAL RIGHT OF ASSESSEE AGAINST DOUBLE TAXATI ON. IT IS WELL SETTLED LAW THAT PITTED AGAINST THE TECHNICAL AND SUBSTANTI AL JUSTICE THE SUBSTANTIAL JUSTICE IS TO PREVAIL AND NOT THE TECHN ICALITY. 7.1. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF JU TE OF CORPORATION OF INDIA LTD. VS. CIT 187 ITR 688, OBSERVING AS UNDER: THE DECLARATION OF LAW IS CLEAR THAT THE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IS CONTERMINOUS WITH THAT OF THE INCOM E TAX OFFICER, AND IF THAT IS SO, THERE APPEARS TO BE NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND EVEN IF NOT RAISED BEFORE THE INCOME TAX OFFICER. NO EXCEPTION COULD BE TAKEN TO THIS VIEW AS THE ACT DOES NOT PLACE ANY RESTRICTION OR L IMITATION ON THE EXERCISE OF APPELLATE POWER. EVEN OTHERWISE, AN APPELLATE AU THORITY WHILE HEARING THE APPEAL AGAINST THE ORDER OF A SUBORDINATE AUTHO RITY, HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING T HE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISI ON, THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHI CH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. THERE APPEARS TO BE NO GOOD REASON AND NONE WAS PLACED BEFORE US TO JUSTIFY CURTAILMENT OF THE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASSESSEE IN SEEKING MODIFICATION OF T HE ORDER OF ASSESSMENT PASSED BY THE INCOME TAX OFFICER. 7.2. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. M/S PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. (ITA NO. 3 908 OF 2010 DATED 21-6-2012), HAS HELD AS UNDER: HELD, IT IS WELL SETTLED THAT AN ASSESSEE IS ENTIT LED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE A UTHORITIES, BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. EV EN ASSUMING THAT THE AO IS NOT ENTITLED TO GRANT A DEDUCTION ON THE BASIS O F A LETTER REQUESTING AN 10 AMENDMENT TO THE RETURN FILED, THE APPELLATE AUTHOR ITIES ARE ENTITLED TO CONSIDER THE CLAIM AND TO ADJUDICATE THE SAME. THE DECLARATION OF LAW IS CLEAR THAT THE POWER OF THE APPELLATE ASSISTANT COM MISSIONER IS COTERMINUS WITH THAT OF THE INCOME TAX OFFICER, IF THAT BE SO, THERE APPEARS TO BE NO REASON AS TO WHY THE APPELLATE AUTHORITY C ANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND EVEN IF NO T RAISED BEFORE THE INCOME TAX OFFICER. NO EXCEPTION COULD BE TAKEN TO THIS VIEW AS THE ACT DOES NOT PLACE ANY RESTRICTION OR LIMITATION ON THE EXERCISE OF APPELLATE POWER. THERE APPEARS TO BE NO GOOD REASON AND NONE WAS PLACED TO JUSTIFY CURTAILMENT OF THE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASS ESSEE IN SEEKING MODIFICATION OF THE ORDER OF ASSESSMENT PASSED BY T HE INCOME TAX OFFICER. THE APPELLATE AUTHORITIES HAVE THE DISCRETION WHETH ER OR NOT TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANNOT, HOWEVER, BE SAID THAT THEY HAVE NO JURISDICTION TO CONSIDER THE SAME. THAT THEY MAY CHOOSE NOT TO EXERCISE THEIR JURISDICTION IN A GIVEN CASE IS ANOTHER MATTE R. THE EXERCISE OF DISCRETION IS ENTIRELY DIFFERENT FROM THE EXISTENCE OF JURISDICTION. THE CONCLUSION THAT THE ERROR IN NOT CLAIMING THE DEDUC TION IN THE RETURN OF INCOME WAS INADVERTENT CANNOT BE FAULTED FOR MORE T HAN ONE REASON. IT IS A FINDING OF FACT WHICH CANNOT BE TERMED PERVERSE. TH ERE IS NOTHING ON RECORD THAT MILITATES AGAINST THE FINDING. THE APPE LLANT HAD NOT SUGGESTED, MUCH LESS ESTABLISHED THAT THE OMISSION WAS DELIBER ATE, MALAFIDE OR EVEN OTHERWISE. THE INFERENCE THAT THE OMISSION WAS INAD VERTENT WAS, THEREFORE, IRRESISTIBLE. APPEAL DISMISSED. 7.3. THE OTHER DECISIONS ON THIS ISSUE ARE AS UNDER: - KERALA CHEMICALS AND PROTEINS LTD. VS. CIT 235 ITR 467 (KER); - APOLLO TYRES LTD. VS. DCIT (ITA 31/COCH/2010); - FRANCO-INDIAN PHARMACEUTICALS PVT. LTD. VS. ITO - ITAT ORDER IN ASSESSEES OWN CASE FOR A.Y. 2003-04 TO 2005-06. 7.4. IN VIEW OF ABOVE DECISIONS, WE RESTORE THIS MA TTER TO THE FILE OF ASSESSING OFFICER FOR VERIFYING THE ASSESSEES CLAI M REGARDING THE WHOLE AMOUNT OF RS. 8 CRORES HAVING BEEN TAXED BETWEEN AS SESSMENT YEARS 2001-02 TO 2005-06 AS PER THE CHART FILED BEFORE US , WHICH ASSESSEE WILL PRODUCE BEFORE ASSESSING OFFICER. IN CASE IT IS FOU ND THAT THE ASSESSEES 11 CLAIM IS CORRECT, THEN THE SUM OF RS. 1,45,20,000/- RECOGNIZED AS INCOME IS TO BE DELETED FROM THE ADVERTISEMENT EXPE NDITURE INCURRED BY THE ASSESSEE AS IT WOULD RESULT IN DOUBLE TAXATION OF THE SAME AMOUNT IN AY 2006-07. WE ORDER ACCORDINGLY. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED AND ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES ONLY. PRONO UNCED IN OPEN COURT ON 07-08-2014. SD/- SD/- ( JOGINDER SINGH ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07-08-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR