Asst. Commissioner of Income tax Cir. 2, Margao V. M/s. Siva Equipment P. Ltd., Goa

ITA 424/PAN/2013

• Counselvise Citation: 42424114 RSA 2013
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONAL L SONKAVDE LD
• Assessee Lawyers: AJAY D NAGDEV
• Keywords: Business income; Depreciation; Revised return
• Section: 43B; 143(3); 234B; 14A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 424/PNJ/2013 : (ASST. YEAR : 2009 - 10) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, MARGAO, GOA (APPELLANT) VS. M/S. SIVA EQUIPMENT PVT. LTD., D2 - 34, SANCOALE INDUSTRIAL ESTATE, ZUARINAGAR, GOA (RESPONDENT) PAN : AACCS8756Q ASSESSEE BY : AJAY D. NAGDEV, CA REVENUE BY : SMT. SONAL L. SONKAVDE, LD. DR DATE OF HEARING : 18/03/2014 DATE OF PRONOUNCEMENT : 11 /0 4 /2014 O R D E R PER P.K. BANSAL 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), PANAJI DT. 26.09.2013 FOR A.Y. 2009 - 10 BY T AKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE DURING THE APPELLATE PROCEEDINGS EVEN WHEN THE CLAIMS IN RESPECT OF THE RELIEF ALLOWED, WERE NEITHER CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME NOR CLAIMED BY THE ASSESSEE BY WAY OF FILING REVISED RETURN OF INCOME AND ALSO NOT CLAIMED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE DECISION OF CIT(A) IS AGAINST THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA VS. CIT (2006) 204 CTR (SC) 182. 3. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE DURING THE APPELL ATE PROCEEDINGS IN RESPECT OF SHORT TERM CAPITAL GAINS ON SALE OF DEBT FUNDS 2 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) OF RS. 52,14,543/ - BY DIRECTING THE AO TO TREAT THE SAID BUSINESS INCOME AS STCG EVEN WHEN THE SAID INCOME WERE NEITHER CLAIMED BY THE ASSESSEE AS STCG IN THE RETURN OF INCOME NOR THE SAME WAS CLAIMED BY THE ASSESSEE BY WAY OF FILING REVISED RETURN OF INCOME AND ALSO NOR THE SAME WAS CLAIMED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE DECISION OF CIT(A) IS AGAINST THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA VS. CIT (2006) 204 CTR (SC) 182. 4. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE DURING THE APPELLATE PROCEEDINGS IN RESPECT OF BALANCING CHARGES UNDER THE HEAD BUSINESS INCOME OF RS.5,90,093/ - BY DIRECTING THE AO TO TREAT TH E SAID BALANCING CHARGES UNDER THE HEAD BUSINESS INCOME AS STCG EVEN WHEN THE SAID BALANCING CHARGES WERE NEITHER CLAIMED BY THE ASSESSEE AS STCG IN THE RETURN OF INCOME NOR THE SAME WAS CLAIMED BY THE ASSESSEE BY WAY OF FILING REVISED RETURN OF INCOME AND ALSO NOR THE SAME WAS CLAIMED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE DECISION OF CIT(A) IS AGAINST THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA VS. CIT (2006) 204 CTR (SC) 182. 5. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE DURING THE APPELLATE PROCEEDINGS IN RESPECT OF SHORT TERM CAPITAL GAINS ON SALE OF FACTORY BUILDING OF RS. 13,78,690/ - BY DIRECTING THE AO THAT THE SAID AMOUNT OF STCG WAS INADVERTENTLY CLA IMED BY THE ASSESSEE AS THERE WAS NO STCG EVEN WHEN THE SAID AMOUNT OF RS. 13,78,690/ - WAS CLAIMED BY THE ASSESSEE AS STCG IN THE RETURN OF INCOME AND IF THERE WAS NO STCG THE SAME CAN BE AMENDED BY THE ASSESSEE BY WAY OF FILING REVISED RETURN OF INCOME, B UT IT WAS NOT SO AND ALSO THE SAME DID NOT CLAIM BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE DECISION OF CIT(A) IS AGAINST THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA VS. CIT (2006) 204 CTR (SC) . 2. THE BRIEF FACTS OF T HE CASE ARE THAT THE ASSESSEE SUBMITTED ITS RETURN AT NIL WHILE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) ON 12.12.2011 AT AN INCOME OF RS.70,80,040/ - . AGAINST THIS, THE ASSESSEE FILED AN APPLICATION FOR RECTIFICATION U/S 154 WHICH WAS DISMISSED BY THE AO VIDE ORDER DT. 29.3.2012. THE APPEAL FILED AGAINST THE ORDER OF SEC. 154 WAS ALSO DISMISSED BY THE CIT(A) VIDE ORDER DT. 26.9.2013. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE INCOME SHOULD HAVE BEEN ASSESSED AT RS.14,72,282/ - . THE AO HAS WRONGLY TREATED THE SHORT TERM CAPITAL GAINS ON SALE OF DEBT FUNDS AT RS.52,14,543/ - AND FACTORY AND BUILDING AT RS.5,90,093/ - AS BUSINESS INCOME AND ALLOWING EXCESS DEPRECIATION OF RS.1,96,878/ - . THE ASSESSEE ACCEPTED BEFORE THE CIT(A) THAT 3 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) SHORT TERM GAINS, TH E CLAIM OF SET OFF OF LOSS ALLOWABLE U/S 70(2) OF THE INCOME TAX ACT WAS NOT MADE IN THE RETURN NOR RAISED DURING THE ASSESSMENT PROCEEDINGS BUT WERE RAISED BEFORE THE CIT(A) FOR THE FIRST TIME. SIMILARLY, THE CLAIM OF NON - CHARGING OF GAIN ON SALE OF THE FACTORY BUILDING AS PER PROVISIONS OF SEC. 50 OF THE INCOME TAX ACT WAS NEITHER MADE IN THE RETURN OF INCOME FILED NOR RAISED DURING THE ASSESSMENT PROCEEDINGS BUT CLAIMED BEFORE THE CIT(A) FOR THE FIRST TIME. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER : 8.2 I HAVE GONE THROUGH THE SUBMISSION OF THE APPELLANT AND DOCUMENTS SUBMITTED. ON THE BASIS OF THE ABOVE, I FIND THE CLAIM OF THE APPELLANT TO BE CORRECT. THE A.O. IS DIRECTED TO VERIFY THE SHORT TERM CAPITAL LOSS ON SALE OF SHARES AND MUTUAL FUNDS AMOUNTING TO RS.1,23,14,376/ - AND THEN ALLOW SET - OFF OF AN AMOUNT OF RS.52,14,543/ - FROM THAT. THIS CLAIM OF APPELLANT IS ALLOWED ACCORDINGLY. SIMILARLY, IN RESPECT OF SHORT TERM CAPITAL GAINS OF RS.5,90,093/ - , CIT(A) ALLOWED THE GROUN D OF THE ASSESSEE BY OBSERVING AS UNDER : 9.2 THE SUBMISSION OF THE APPELLANT IS SELF EXPLANATORY. THE A.O. IS DIRECTED TO TAKE INTO ACCOUNT THE SUBMISSION OF THE APPELLANT AND RECOMPUTED THE INCOME ACCORDINGLY. THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED. IN RESPECT OF GAIN ON SALE OF FACTORY BUILDING AMOUNTING TO RS.13,78,690/ - CIT(A) ALLOWED THE GROUND OF THE ASSESSEE BY HOLDING AS UNDER : 11 . ON THE BASIS OF ABOVE SUBMISSION, THE APPELLANT HAS WORKED OUT ITS TAXABLE INCOME AS UNDER : COM BINED EFFECT OF THE RECTIFICATIONS MENTIONED ABOVE IS AS UNDER : PARTICULARS TAXABLE INCOME SHORT TERM CAPITAL LOSS CARRIED FORWARD TAXABLE INCOME AND SHORT TERM CAPITAL LOSS CARRIED FORWARD AS PER ORDER U/S. 143(3) 70,80,040 1,23,14,376 AS PER PARA (4)(1) ( - )52,14,543 ( - )52,14,543 AS PER PARA (4)(2) ( - )5,31,084 ------ AS PER PARA (4)(3) (+)1,37,869 (+)13,78,690 REVISED & CORRECT INCOME & SHORT TERM CAPITAL LOSS C/F 14,72,282 84,78,523 4 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) 12 . THE A.O. IS DIRECTED TO VERIFY THE ARITHMETICAL ACCURACY OF THE ABOVE AND GIVE APPEAL EFFECT ACCORDINGLY. 3. THE FIRST GROUND IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 4. GROUND NO S . 2 TO 5 RELATES TO ADMISSION OF GROUND OF ADDITIONAL CLAIM MADE BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS EVEN THOUGH CLAIM WAS NOT MADE BEFORE THE AO BY FILING ANY REVISED RETURN OR OTHERWISE DURING THE ASSESSMENT PROCEEDINGS . 4.1 THE LD. DR, IN THIS REGARD, VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS RETURNED SUM OF RS. 52, 14,543/ - UNDER THE HEAD INCOME FROM BUSINESS AND THE AO HAS ACCEPTED THE SAME. THE SAID INCOME WAS CREDITED IN THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE BUT SUBSEQUENTLY THE ASSESSEE MOVED AN APPLICATION U/S 154 BEFORE THE AO THAT THERE HAS BEEN AN ERRO R. THAT THE SAID INCOME IS SHORT TERM CAPITAL GAINS AND IT CANNOT BE THE BUSINESS INCOME AND IT REQUIRES SET OFF AGAINST CAPITAL LOSS FROM THE EARLIER YEARS. SINCE THE MISTAKE WAS NOT APPARENT, SAME WAS REJECTED. CIT(A) ALSO CONFIRMED THE ORDER PASSED U /S 154 BUT IN AN APPEAL AGAINST THE ASSESSMENT ORDER U/S 143(3), THE ASSESSEE HAS TAKEN THE FACTS CLAIMED BEFORE THE CIT(A) ASKING THAT THE SAID SUM BE TREATED AS SHORT TERM CAPITAL GAINS. IT IS A CASE WHERE THE FACTS ARE TO BE INVESTIGATED . IT IS NOT AP PARENT FROM THE RETURN THAT THE SAID SUM WHICH THE ASSESSEE RECEIVED ON SALE OF DEBT FUNDS WAS SHORT TERM CAPITAL GAINS. THIS CLAIM COULD HAVE BEEN MADE BY THE ASSESSEE ONLY BY FILING A REVISED RETURN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. CIT(A) E XCEEDED HIS JURISDICTION BY ACCEPTING THE CLAIM. RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZ E (INDIA) LTD. VS. CIT, 284 ITR 323. 5 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) 4.2 THE LD. AR , ON THE OTHER HAND, VEHEMENTLY CONTENDED THAT THE ASSESSEE CAN MAKE A FRESH CLAIM BEFORE THE APPELLATE AUTHORITY. THE DECISION OF GOETZE (INDIA) LTD. VS. CIT, 284 ITR 323 ( SUPRA ) IS NOT APPLICABLE TO AN APPELLATE AUTHORITY. IN THIS REGARD, RELIANCE WAS PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD., 349 ITR 336 . THUS, IT WAS CONTENDED THAT THE CIT(A) HAS CORRECTLY ENTERTAINED THE CLAIM OF THE ASSESSEE. 4.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT IN THIS CASE THE ASSESSEE HAS SUBMITTED THE RETURN AND IN THE RETURN FILED, THE ASSESSEE HAS NOT SHOWN SHORT TERM CAPITAL GAINS ON SALE OF DEBT FUNDS AMOUNTING TO RS.52,1 4,543/ - SEPARATELY UNDER THE HEAD SHORT TERM CAPITAL GAINS. SIMILARLY, THE SUM OF RS.5,90,093/ - CLAIMED BY THE ASSESSEE AS SHORT TERM CAPITAL GAINS IN VIEW OF SEC. 50 WAS NOT SHOWN SEPARATELY. THE ASSESSEE HAS CREDITED THE PROFIT RECEIVED ON THE SALE OF DEBT FUNDS IN THE PROFIT & LOSS ACCOUNT AND THEREFORE THIS INCOME HAS BEEN SHOWN UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE HAS CLAIMED SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS. 64,18,170/ - BUT THE AO SINCE NOTED AS PER THE ASSESSMENT ORDER PASSED U/S 143(3) FOR THE A.Y 2008 - 09 DT. 12.12.2011 THAT THE CARRY FORWARD BUSINESS LOSS IS NIL, THEREFORE, HE DID NOT ALLOW ANY SET OFF AND THE INCOME OF THE ASSESSEE WAS COMPUTED AS UNDER : INCOME RETURNED NIL ADD : 1. DISALLOWANCE U/S 14A 1,58,229 2. DISALLOWANCE ON ACCOUNT OF NOTIONAL LOSS CLAIMED ON A/C OF MARKED TO MARKET LOSSES 5,03,645 3. DISALLOWANCE OF SET OFF OF B/F BUSINESS LOSS 64,18,170 70,80,040 TOTAL ASSESSED INCOME 70,80,040 TAX ON TOTAL ASSESSED INCOME 21,24,012 ADD : EDUCATION CESS @ 3% 63,720 GROSS TAS 21,87,732 ADD : INTEREST U/S 234B 4,14,942 6 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) SUBSEQUENTLY, THE ASSESSEE MOVED AN APPLICATION U/S 154 VIDE LETTER DT. 21.1.2012 STATING THAT IN THE ASSESSMENT ORDER PASSED DT. 12.12.2011 FOLLOWING MISTAKES WERE NOTI CED : (1) AN AMOUNT OF ` 52,14,543/ - OF SHORT TERM CAPITAL GAIN ON SALE OF DEBT FUNDS WAS INADVERTENTLY CONSIDERED AS BUSINESS INCOME AND NOT UNDER CAPITAL GAINS WHILE FILING OUR RETURN OF INCOME, ALTHOUGH IT WAS CORRECTLY REFLECTED IN PROFIT & LOSS ACCOUNT. AS A RESULT, THE POSITION OF BUSINESS INCOME, CAPITAL GAINS AND CARRY FORWARD LOSSES WAS INCORRECTLY REFLECTED IN THE RETURN. WE REQUEST YOU TO CONSIDER THIS AS AN ERROR APPARENT FROM RECORDS AND TAKE INTO ACCOUNT THE CHANGED POSITION. (2) AN A MOUNT OF ` 5,90,093/ - WHICH WAS EARLIER ADDED TO BUSINESS INCOME IN THE RETURN OF INCOME AS BALANCING CHARGE ON SALE OF FACTORY BUILDING, IS IN FACT SHORT TERM CAPITAL GAIN ON SALE OF FACTORY BUILDING AS BALANCING CHARGE IS ONLY APPLICABLE TO POWER SECTOR U NITS. AS A RESULT, THE POSITION OF BUSINESS INCOME, CAPITAL GAINS AND CARRY FORWARD LOSSES WAS INCORRECTLY REFLECTED IN THE RETURN. WE REQUEST YOU TO CONSIDER THIS AS AN ERROR APPARENT FROM RECORDS AND TAKE INTO ACCOUNT THE CHANGED POSITION. AND ASSESS EE ENCLOSED THEREWITH THE CHANGED POSITION OF THE CARRY FORWARD LOSSES. THE AO, WE NOTED, VIDE ORDER DT. 29.3.2012 REJECTED THE RECTIFICATION APPLICATION OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL AGAINST THE ORDER PASSED U/S 154 DT. 29.3.2012 AND ALSO AGAINST THE ORDER PASSED U/S 143(3). CIT(A) DISPOSED OFF BOTH THE APPEALS BY A COMBINED ORDER DT. 26.9.2013. THERE WAS DELAY OF 3 MONTHS SO FAR AS APPEAL FILED AGAINST THE ORDER U/S 143(3) WHICH WAS CONDONED BY CIT(A). CIT(A) DISMISSED THE APPEAL AGAIN ST ORDER PASSED U/S 154 AGAINST WHICH THE ASSESSEE HAS NOT COME IN APPEAL BEFORE US. THUS, THE ORDER OF CIT(A) AGAINST ORDER U/S 154 BECAME FINAL. THE ASSESSEE, WE NOTED , HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL BEFORE THE CIT(A) : 1. ON THE FACTS AND IN LAW THE A.O. HAS ERRED IN ASSESSING THE INCOME AT RS.70,80,040/ - INSTEAD OF RS.14,72,282/ - BY TREATING THE SHORT TERM CAPITAL GAIN ON 7 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) SALE OF DEBT FUNDS RS.52,14,543/ - AND FACTORY BUILDING TO THE EXTENT OF RS.5,90,093/ - AS BUSINESS INC OME AND ALLOWING EXCESS DEPRECIATION OF RS.1,96,878/ - . WITHOUT PREJUDICE TO THE ABOVE GROUNDS, 2. CLAIM OF SET OFF OF LOSS ALLOWABLE U/S. 70(2) OF THE INCOME TAX ACT THOUGH NEITHER MADE IN THE RETURN OF INCOME FILED NOR RAISED DURING THE ASSESSMENT PROC EEDINGS CAN BE CLAIMED FOR THE FIRST TIME BEFORE THE CIT(A). 3. CLAIM OF NON - CHARGING OF GAIN ON SALE OF FACTORY BUILDING AS PER PROVISIONS OF SECTION 50 OF THE INCOME TAX ACT THROUGH NEITHER MADE IN THE RETURN OF INCOME FILED NOR RAISED DURING THE ASSESS MENT PROCEEDINGS CAN BE CLAIMED FOR THE FIRST TIME BEFORE THE CIT(A). YOUR APPELLANT CRAVES LEAVE TO ADD ALTER, DELETE OF ABOVE OR ANY OTHER GROUND/S OF APPEAL. FROM THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE WE NOTED THAT NONE OF THE GROUNDS TAKEN BY THE ASSESSEE RELATES TO THE ISSUE BEFORE THE AO AS NO GROUND HAS BEEN TAKEN BY THE ASSESSEE IN RESPECT OF ANY DISALLOWANCE OR ADDITION MADE BY THE AO EXCEPT CHALLENGING THE QUANTUM OF THE INCOME DETERMINED BY THE AO BY TREATING, AS PER THE ASSESSEE, THE SH ORT TERM CAPITAL GAINS ON SALE OF DEBT FUNDS OF RS.52,14,543/ - AND FACTORY BUILDING TO THE EXTENT OF RS.5,90,093/ - AS BUSINESS INCOME AND ALLOWING EXCESS DEPRECIATION OF RS. 1,96,878/ - . WE NOTED THAT THE AO HAS NOT TREATED THE GAIN ON SALE OF DEBT FUNDS A ND FACTORY BUILDING TO BE THE BUSINESS INCOME REJECTING THE CLAIM OF THE ASSESSEE BUT THE ASSESSEE HIMSELF HAS RETURNED THE SAME INCOME UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE DID NOT MAKE ANY SUCH CLAIM EVEN DURING THE COURSE OF ASSESSMENT PROC EEDINGS. NOW, THE QUESTION ARISES WHETHER THE GROUNDS TAKEN BY THE ASSESSEE IN ITS APPEAL BEFORE THE CIT(A) ARE MAINTAINABLE OR NOT. THE LD. AR HAS VEHEMENTLY CONTENDED THAT THE ASSESSEE CAN MAKE ADDITIONAL/FRESH CLAIM BEFORE THE APPELLATE AUTHORITY AND IN THIS REGARD, RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD., 349 ITR 336 ( SUPRA ). WE HAVE GONE 8 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) THROUGH THE SAID DECISION. WE NOTED THAT BEFORE THE HON'BLE BOMBAY HIGH COURT THERE WERE THREE QUESTIONS WHICH READ AS UNDER : (A) WHETHER AN ASSESSEE CAN AMEND A RETURN FILED BY HIM FOR MAKING ADDITIONAL CLAIM FOR DEDUCTION OTHER THAN FILING A REVISED RETURN ? (B) WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE INCOME - TAX APPELLATE TRIBUNAL, IN LAW, WAS RIGHT IN HOLDING THAT A CLAIM OF DEDUCTION NOT MADE IN THE ORIGINAL RETURN AND NOT SUPPORTED BY A REVISED RETURN, IS ADMISSIBLE ? (C) WHETHER, ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE TRIBUNAL, IN LAW, WAS RIGHT IN NOT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAS NO POWER TO ENTERTAIN A CLAIM MADE BY AN ASSESSEE AFTER FILING A ORIGINAL RETURN OTHERWISE THAN BY FILING A R EVISED RETURN ? WE FOUND THAT IN THAT CASE THE HON'BLE HIGH COURT NOTED TWO THINGS; FIRSTLY THAT THE RESPONDENT IS ENTITLED TO DEDUCTION CLAIMED AND SECONDLY, THE RESPONDENT MADE THE CLAIM NOT ONLY BEFORE THE AO BUT ALSO INDEPENDENTLY BEFORE THE CIT(A) A ND TRIBUNAL. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN FOR THE A.Y 2004 - 05 ON 18.10.2004. DURING THE ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 43B IN RESPECT OF PAYMENT OF SEBI FEES OF RS. 10 LAC S EACH PAID ON 16.7.2004 AND 29.4.2004 DURING THE F.Y. 2004 - 05 RELEVANT TO A.Y. 2005 - 06. THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION IN RESPECT OF THE SAID PAYMENT DURING THE A.Y 2004 - 05. THE ASSESSEE IN THE COURSE OF PROCEEDINGS BEFORE THE AO, HOWEVER MA DE CLAIM OF RS. 40 LACS U/S 43B ALSO BEING PAYMENT OF SEBI FEES BUT MADE ON 9.5.2003, I.E., IN THE ASSESSMENT YEAR IN QUESTION AND SUBMITTED EVIDENCE BY WAY OF PROOF OF PAYMENT OF SEBI FEES OF RS. 40 LACS. AO REJECTED THE CLAIM ON THE GROUND THAT HE DOES NOT HAVE ANY AUTHORITY TO ALLOW ANY RELIEF OR DEDUCTION WHICH HAS NOT BEEN CLAIMED IN THE RETURN. THE HON'BLE HIGH COURT DID NOT CONSIDER THE PLEA RELATING TO QUESTION NO. 1. CIT(A) ALLOWED DEDUCTION TO THE ASSESSEE U/S 43B AS THE AMOUNT WAS ALLOWABLE U/ S 43B. NO CONTENTION WAS RAISED IN THE APPEAL FILED BY THE REVENUE BEFORE THE TRIBUNAL THAT THE APPELLATE AUTHORITY HAD NO JURISDICTION 9 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) TO ENTERTAIN THE CLAIM. THE TRIBUNAL DECIDED IN FAVOUR OF THE ASSESSEE GRANTING THE SAID DEDUCTION. THE HON'BLE HIGH COURT IN THIS CASE NOTED FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA LTD., 187 ITR 688 THAT IN THE CASE OF JUTE CORPORATION OF INDIA LTD. THE ASSESSEE DID NOT CLAIM ANY DEDUCTION IN RESPECT OF THE PURCHASE TAX BE FORE THE AO. SUBSEQUENTLY, THE ASSESSEE WAS ASSESSED TO PURCHASE TAX AND THE ORDER OF THE ASSESSMENT WAS RECEIVED ON NOVEMBER, 23, 1973. W HEN THE APPEAL OF THE ASSESSEE WAS PENDING BEFORE THE APPELLATE AUTHORITY , T HE LIABILITY TO PURCHASE TAX HAS OCCURRE D IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT DURING THE ASSESSMENT YEAR I N THE CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. VS. CIT, 82 ITR 363 (SC). THE ASSESSEE, THEREFORE RAISED THE CLAIM BY TAKING ADDITIONAL GROUND BEFORE THE CIT(A) WHICH W AS ALLOWED BY CIT(A). THE TRIBUNAL AND THE HON'BLE HIGH COURT DECIDED AGAINST THE ASSESSEE. WHEN THE MATTER WENT BEFORE THE HON'BLE SUPREME COURT, HON'BLE SUPREME COURT DISCUSSING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KANPUR COAL SYNDICATE, 53 ITR 225 TOOK THE VIEW THAT THE POWER OF THE ASSISTANT COMMISSIONER IS CO - TERMINUS WITH THAT OF THE ITO AND THERE IS NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND, EVEN IF NOT RAISE D BEFORE THE ITO. THE HON'BLE HIGH COURT NOTED THAT THE HON'BLE SUPREME COURT IN THAT CASE REFERRED TO THE OBSERVATION OF THE HON'BLE SUPREME COURT IN THE CASE OF ADDL. CIT VS. GURJARGRAVURES P. LTD., 111 ITR 1 (SC) IN WHICH IT WAS HELD AS UNDER : THE A BOVE OBSERVATIONS DO NOT RULE OUT A CASE FOR RAISING AN ADDITIONAL GROUND BEFORE THE APPELLATE ASSISTANT COMMISSIONER 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 MAD E, OR THAT THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW. THERE MAY BE SEVERAL FACTORS JUSTIFYING RAISING OF SUCH NEW PLEA IN APPEAL, AND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. IF THE APPELLATE ASSISTANT COMMISSIONER IS SATISFIED HE WOULD BE ACTING WITHIN HIS JURISDICTION IN CONSIDERING THE QUESTION SO RAISED IN ALL ITS ASPECTS. OF COURSE, WHILE PERMITTING THE ASSESSEE TO RAISE AN ADDITIONAL GROUND, THE APPELLATE ASSISTANT 10 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) COMMISSIONER SHOULD EXERCISE HIS DISCRETION IN A CCORDANCE WITH LAW AND REASON. HE MUST BE SATISFIED THAT THE GROUND RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. THE SATISFACTION OF THE APPELLATE ASSISTANT COMMISSIONER DEPENDS UPON THE FACTS AND CIRCUMSTANCE S OF EACH CASE AND NO RIGID PRINCIPLES OR ANY HARD AND FAST RULE CAN BE LAID DOWN FOR THIS PURPOSE. [EMPHASIS SUPPLIED] ULTIMATELY, THE HON'BLE HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD., 349 ITR 336 ( SUPRA ) REFERRING TO THE DECISION OF THE FULL BENCH IN THE CASE OF AHMEDABAD ELECTRICITY CO. LTD. VS. CIT, 199 ITR 351 (BOM) RELIED ON BY THE LD. AR AND AFTER CONSIDERING ALL THESE DECISIONS HELD AS UNDER : IN THE CASE BEFORE US, THE CIT(A) AND THE TRIBUNAL HAV E HELD THE OMISSION TO CLAIM THE DEDUCTION OF RS.40 LAKHS TO BE INADVERTENT. BOTH THE APPELLATE AUTHORITIES HELD, AFTER CONSIDERING ALL THE FACTS, THAT THE ASSESSEE HAD INADVERTENTLY CLAIMED A DEDUCTION OF RS.20 LAKHS PAID AFTER THE END OF THE YEAR IN QUESTION. WE SEE NO REASON TO INTERFERE WITH THIS FINDING. WE SEE LESS REASON TO INTERFERE WITH THE EXERCISE OF DISCRETION BY THE APPELLATE AUTHORITIES IN PERMITTING THE RESPONDENT TO RAISE THIS CLAIM. THAT THE RESPONDENT IS ENTITLED TO THE DEDUCTION IN LA W IS ADMITTED AND, IN ANY EVENT, CLEARLY ESTABLISHED. IN THE CIRCUMSTANCES, THE RESPONDENT OUGHT NOT BE PREJUDICED. THE ORDERS OF THE COMMISSIONER OF I NCOME - TAX (A PPEALS ) AND THE TRIBUNAL CLEARLY INDICATE THAT BOTH THE APPELLATE AUTHORITIES HAD EXERCISED THEIR JURISDICTION TO CONSIDER THE ADDITIONAL CLAIM AS THEY WERE ENTITLED TO IN VIEW OF THE VARIOUS JUDGMENTS ON THE ISSUE, INCLUDING THE JUDGMENT OF THE SUPREME COURT IN NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC) . THIS IS CLEAR FROM TH E FACT THAT THESE JUDGMENTS HAVE BEEN EXPRESSLY REFERRED TO IN DETAIL BY THE COMMISSIONER OF I NCOME - TAX (A PPEALS ) AND BY THE TRIBUNAL. WE WISH TO CLARIFY THAT BOTH THE APPELLATE AUTHORITIES HAVE THEMSELVES CONSIDERED THE ADDITIONAL CLAIM AND ALLOWED IT. T HEY HAVE NOT REMANDED THE MATTER TO THE ASSESSING OFFICER TO CONSIDER THE SAME. BOTH THE ORDERS EXPRESSLY DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF RS.40 LAKHS UNDER SECTION 43B OF THE ACT. THE ASSESSING OFFICER IS, THEREFORE, NOW ONLY TO COMPUTE THE RESPONDENT'S TAX LIABILITY WHICH HE MUST DO IN ACCORDANCE WITH THE ORDERS ALLOWING THE RESPONDENT A DEDUCTION OF RS.40 LAKHS UNDER SECTION 43B OF THE ACT. THE CONCLUSION THAT THE ERROR IN NOT CLAIMING THE DEDUCTION IN THE RETURN OF INCOME WAS INADVERTENT CANNOT BE FAULTED FOR MORE THAN ONE REASON. IT IS A FINDING OF 11 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) FACT WHICH CANNOT BE TERMED PERVERSE. THERE IS NOTHING ON RECORD THAT MILITATES AGAINST THE FINDING. THE APPELLANT HAS NOT SUGGESTED, MUCH LESS ESTABLISHED THAT THE OMISSION WAS DEL IBERATE, MALA FIDE OR EVEN OTHERWISE. THE INFERENCE THAT THE OMISSION WAS INADVERTENT IS, THEREFORE, IRRESISTIBLE. FROM THE READING OF THE DECISION OF THE HON'BLE HIGH COURT , AS RELIED ON BY THE LD. AR, WE ARE OF THE VIEW THAT THE SAID DECISION IS NOT AP PLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. IN THAT CASE, IT IS A FACT THAT THE ASSESSEE HAD CLAIMED DEDUCTION IN RESPECT OF SEBI FEES U/S 43B DURING THE COURSE OF THE PROCEEDINGS BEFORE THE AO. THIS FAC T WAS APPARENT BEFORE THE ASSESSMENT ORDER . THE ASSESSEE ALSO FILED EVIDENCE FOR MAKING THE PAYMENT ON 9.5.2003 FOR SEBI FEES BEFORE AO . THE ASSESSEE DULY EXPLAINED THE REASON FOR MAKING CLAIM. IT WAS CLEARLY ESTABLISHED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 43B. FACTS ARE NOT TO BE I NVESTIGATED. THE APPELLATE AUTHORITY AS WELL AS THE HON'BLE HIGH COURT HAS OBSERVED THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION CLAIMED AS THE AMOUNT WAS APPARENTLY ALLOWABLE U/S 43B. EVEN THE REVENUE HA D NOT TAKEN ANY CONTENTION IN THE APPEAL FILED BY I T BEFORE THE TRIBUNAL THAT THE APPELLATE AUTHORITY HAD NO JURISDICTION TO ENTERTAIN THE CLAIM. IN THE CASE OF THE ASSESSEE, WE NOTED, THE ASSESSEE HAS NOT MADE ANY CLAIM DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THAT THE INCOME RETURNED BY HIM UNDER THE HEAD BUSINESS INCOME ON THE SALE OF DEBT FUNDS IS NOT BUSINESS INCOME BUT STCG. SIMILARLY, NO CLAIM WAS MADE IN RESPECT OF STCG FOR THE SUM OF RS. 5,90,093/ - . IT CANNOT BE SAID APPARENTLY THAT THE AMOUNT EARNED BY THE ASSESSEE WAS STCG AS NO SUCH EVIDENCE BY WAY OF FINAL ACCOUNTS OR AUDIT REPORT WAS BROUGHT TO OUR KNOWLEDGE . IT IS HIGHLY DEBATABLE WHETHER INCOME WAS ASSESSABLE UNDER HEAD CAPITAL GAINS OR UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE HIMSELF HAS RETURNED INCOME UNDER THE HEAD BUSINESS INCOME AND THE SAME WAS ASSESSED AS SUCH. EVEN IN THE GROUNDS OF APPEAL TAKEN BEFORE THE CIT(A), THERE IS NO WHISPER THAT THE CLAIM WAS MADE BEFORE THE AO IF WE LOOK INTO THE GROUND NO. 1 TAKEN BEFORE THE CIT(A). ON THE BASIS OF THE FACTS, IT CANNOT BE SAID THAT INCOME WAS APPARENTLY ASSESSABLE UNDER THE HEAD INCOME FROM CAPITAL GAINS. 12 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) IT IS A CASE WHERE THE FACTS ARE TO BE INVESTIGATED. NOT ONLY THIS, EVEN IN THE CASE OF JUTE CORPORATION OF INDIA LTD., 187 ITR 688 ( SUPRA ) WHICH WAS REFERRE D TO BY THE HON'BLE HIGH COURT, IT WAS APPARENT THAT THE CLAIM IN RESPECT OF PURCHASE TAX WAS ALLOWABLE TO THE ASSESSEE IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. VS. CIT, 82 ITR 363 (SC) ( SUPR A ). EVEN WE NOTED THAT THE HON'BLE HIGH COURT REFERRED TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ADDL. CIT VS. GURJARGRAVURES P. LTD., 111 ITR 1 (SC) ( SUPRA ) WHEREIN THE HON'BLE SUPREME COURT HAS CATEGORICALLY TAKEN THE VIEW THAT ADDITIO NAL GROUND CAN BE RAISED BEFORE THE APPELLATE AUTHORITY IF IT COULD HAVE BEEN RAISED WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT ORDER WAS MADE PROVIDED THAT THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW. THE ONUS, IN OUR O PINION, IS ON THE ASSESSEE TO PROVE THAT THERE HAS BEEN CHANGE OF CIRCUMSTANCES OR LAW. EVEN THE HON'BLE SUPREME COURT IN THIS CASE EXPLICITLY LAID DOWN THAT THE CIT MUST BE SATISFIED THAT THE GROUND RAISED WAS BONA FIDE AND SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. NO WHISPER WHATSOEVER IS MADE BY THE ASSESSEE. EVEN NO SUCH PLEA HAS BEEN RAISED BY THE COUNSEL OF THE ASSESSEE BEFORE US. THE CIT(A) HAS ALSO NOT GIVEN ANY FINDING IN THIS REGARD. THE ISSU E WHETHER INCOME WAS ASSESSABLE AS STCG OR BUSINESS INCOME IS NOT AN ISSUE WHICH CAN BE DECIDED WITHOUT BRINGING THE FACTS ON RECORD. THE ISSUE IS HIGHLY DEBATABLE. WE NOTED FROM THE ORDER OF THE CIT(A) THAT THE CIT(A) DID NOT DECIDE THE ISSUE WHETHER TH E INCOME IS ASSESSABLE UNDER THE HEAD STCG OR UNDER THE HEAD BUSINESS INCOME BUT SIMPLY OBSERVED THAT I HAVE GONE THROUGH THE SUBMISSION OF THE ASSESSEE AND DOCUMENTS SUBMITTED. ON THE BASIS OF THE ABOVE, I FIND THAT THE CLAIM OF THE ASSESSEE TO BE CORRE CT. IN VIEW OF THIS FACT, WE ARE OF THE VIEW THAT THE DECISION OF THE HON'BLE HIGH COURT WILL NOT ASSIST THE ASSESSEE. IT IS A SETTLED LAW THAT A DECISION HAS TO BE READ AND INTERPRETED IN THE CONTEXT IN WHICH IT HAS BEEN DELIVERED. IT CANNOT BE APPLIE D UNIVERSALLY. THE APPLICABILITY OF THE DECISION DEPENDS ON THE FACTS INVOLVED THEREIN. THE HON'BLE 13 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) SUPREME COURT IN THIS REGARD IN THE CASE OF CIT VS. SUN ENGINEERING WORKS P. LTD. (SC), 198 ITR 297 (HEAD NOTE) AT PG. 299 HAS LAID DOWN AS UNDER : IT I S NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A WORD OR A SENTENCE FROM THE JUDGEMENT OF THE SUPREME COURT DIVORCED FROM THE CONTEXT OF THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY THE COURT. THE JUDGEMENT MUST BE REA D AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGEMENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THE COURT. A DECISION OF THE SUPREME COURT TAKES ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN WHICH IT IS RENDERED AND, WHI LE APPLYING THE DECISION TO A LATER CASE, COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION. WE ALSO NOTED THAT IN THE CASE OF THE ASSESSEE, THE ASSESSMENT HAS BEEN MADE ON THE SAME INCOME AS HAS BEEN RETURNED BY THE ASS ESSEE AND ASSESSEE HAS NOT TAKEN ANY GROUND BEFORE THE APPELLATE AUTHORITY WHICH MAY ARISE OUT OF THE ASSESSMENT ORDER SO THAT THE GROUND TAKEN BY THE ASSESSEE RELATING TO STCG OR BUSINESS INCOME BE RELATED TO THE ADDITIONAL GROUND OR FRESH GROUND. IF THE ASSESSMENT HAS BEEN MADE ON THE SAME INCOME AS RETURNED BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE IS AGGRIEVED FROM ASSESSMENT . IN VIEW OF THIS, WE ALLOW GROUND NOS. 2 & 3 TAKEN BY THE REVENUE. IN VIEW OF THE AFORESAID DISCUSSION, IN OUR OPINION, CIT(A) COULD HAVE NOT ENTERTAINED THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE. WE, THEREFORE, ALLOW THE GROUNDS OF THE REVENUE. 5. SO FAR AS THE OTHER GROUNDS ARE CONCERNED, SINCE IN OUR OPINION CIT(A) COULD HAVE NOT ENTERTAINED THE GROUNDS TAKEN BY THE ASSESSEE, THE OTHER GROUNDS HAVE BECOME INFRUCTUOUS AND DO NOT REQUIRE ANY ADJUDICATION ON MERIT. 6 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED. 7 . ORDER PRONOUNCED IN THE OPEN COU RT ON 11 .04.2014. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 11 .04. 201 4 *SSL* 14 ITA NO. 424/PNJ/2013 (ASST. YEAR : 2009 - 10) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER