ADDL.C.I.T. RG.10(2), MUMBAI V. CAPGEMINI CONSULTING INDIA PVT. LTD., MUMBAI

ITA 6881/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88637 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 05-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-10-2011
• Court: TRIBUNAL
• Assessee Lawyers: IN CIRCUMSTANCES OF CA SE
• Keywords: Question of law; Revised return
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI VK;DJ VIHYH; VF/KDJ.K] LH U;K;IHB EQACBZ BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER JH FOT; IKY JKO] U;KF;D LNL; ,OA JH JKTSUNZ] YS[KK LNL; DS LE{K ITA NO. 6881 /MUM/2011 ASSESSMENT YEAR: - 2007 - 08 THE ASST. COMMISSIONER OF INCOME TAX 10(2) ROOM NO. 432, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. VS.` CAPGEMINI CONSULTING INDIA PVT. LTD. (NOW KNOWN AS CAPGEMINI IN DIA PVT. LTD.) SEP 2, PIROJSHNAGAR, EASTERN EXPRESS HIGHWAY VIKHROLI (EAST) MUMBAI - 79. APPELLANT / VIHYKFKHZ RESPONDENT / IZR;FKHZ CO NO. 172 /MUM/201 2 ARISING OUT OF ITA NO. 6881/MUM/2011 ASSESSMENT YEAR: - 2007 - 08 CAPGEMINI CONSULTING INDIA PVT. LTD. (NOW KNOWN AS CAPGEMINI INDIA PVT. LTD.) C/O. KALYANIWALLA & MISTRY, CHARTERED ACCOUNTANTS, ARMY & NAVY BUILDING, 148, MAHATMA GANDHI ROAD, MUMBAI 400 001. VS.` THE ASST. COMMISSIONER OF INCOME TAX 10(2) ROOM NO. 432, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. APPELLANT / VIHYKFKHZ RESPONDENT / IZR;FKHZ ITA NO. 6477/MUM/2011 ASSESSMENT YEAR: - 2007 - 08 CAPGEMINI CONSULTING INDIA PVT. LTD. (NOW KNOWN AS CAPGEMINI INDIA PVT. LTD.) C/O. KALYANIWALLA & MISTRY, CHARTERED ACCOUNTANTS, ARMY & NAVY BUILDING, 148, MAHATMA GANDHI ROAD, MUMBAI 400 001. VS.` THE ASST. COMMISSIONER OF INCOME TAX 10(2) ROOM NO. 432, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. APPELLANT / VIHYKFKHZ RESPONDENT / IZR;FKHZ CAPGEMINI INDIA PVT. LTD 2 | P A G E ORDER PER VIJAY PAL RAO, JM THESE CROSS APPEALS AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST T HE ORDER DATED 5.7.2011 OF CIT(A) FOR THE A.Y. 2007 - 08. FIRST WE TAKE UP THE APPEAL OF REVENUE IN ITA NO. 6881/MUM/2011, WHEREIN THE REVENUE HAS RAISED FOLLOWING GROUNDS: - '1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND WELL AS IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE LOSS OF UNITS OF 10A TO BE ADJUSTED AGAINST THE PROFIT OF UNIT AGAINST 10A BUT AFTER ALLOWANCE OF DEDUCTION U/S 10A THEREBY INDICATING THAT THE LO SS OF UNIT U/S 10A SHALL NOT ADJUSTED AGAINST THE PROFITS NOT LIABLE FOR DEDUCTION U/S 10A WHICH IS CONTRARY TO THE PROVISION OF THE ACT AND THE LEGISLATIVE INTENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) ER RED IN DIRECTING NOT TO DEDUCT DATA LINE COST FROM EXPORT TURNOVER WHILE COMPUTING THE DEDUCTION U/S 10A ON THE PRESUMPTION THAT THESE ARE INCURRED IN BUSINESS OF SOFTWARE DEVELOPMENT IN INDIA AND COULD NOT BE CONSIDERED AS EXPENDITURE ATTRIBUTABLE TO DELI VERY OF COMPUTER SOFTWARE OUTSIDE INDIA IGNORING THE PRIMARY FACT THAT THE MAIN OBJECT OF THE ASSESSEE IS EXPORT OF SOFTWARE OUTSIDE INDIA BY INCURRING EXPENDITURE IN INDIA AND THEREFORE CONTRARY TO MAIN OBJECTS OF THE ASSESSEE'S BUSINESS.' 2. GROUND NO. 1 IS REGARDING THE DIRECTIONS GIVEN BY THE CIT(A)_ FOR ADJUSTING THE LOSS OF 10A UNIT AGAINST THE PROFIT OF ANOTHER 10A UNIT AFTER ALLOWING DEDUCTION U/S 10A. REVENUE BY / JKTLP DH VKSJ LS SHRI PREMANAND J. ASSESSEE BY / FU/KKZFJRH FD VKSJ LS MR. M.M. GOLVALA AND MR. TAHER KHOKHAWALA DATE OF HEARING 05.03.2015 DATE OF PRONOUNCEMENT 18 .03.2015 CAPGEMINI INDIA PVT. LTD 3 | P A G E 3. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. A T THE OUTSET, WE NOTE THAT THIS ISSUE IS RECURRING IN NATURE AS FOR THE A.Y. 2006 - 07, AN IDENTICAL ISSUE WAS CONSIDERED AND DECIDED BY THE TRIBUNAL IN FOVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE VIDE ORDER DATED 25.05.2011 IN ITA NO. 7729/MUM/2010 . THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THIS TRIBUNAL FOR A. Y. 2007 - 08 WAS DISMISSED BY THE HON'BLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 30.4.2014 IN PARA 3 AND 4 AS UNDER: - 3. WE FIND THAT AT PARA 5 OF THE PRESENT APPEAL MEMO THE GROUN DS HAVE BEEN SUMMARIZED. THEY HAVE BEEN OVERLAPPING TO SOME EXTENT AND UNHAPPILY WORDED BUT WHAT WE COULD CULL OUT THEREFROM IS THAT THE FIRST GROUND RELATES TO THE ADJUSTMENT CONTEMPLATED BY SECTION 10A OF THE INCOME TAX ACT, 1961. THE TRIBUNAL HAS DIRECT ED THAT THE LOSS OF ONE UNIT CAN BE ADJUSTED AGAINST THE PROFIT OF ANOTHER UNIT BUT AFTER ALLOWANCE OF DEDUCTION UNDER SECTION 10A OF SUCH PROFITABLE UNITS. THE LOSS OF ONE UNIT UNDER SECTION 10A OF THE ACT SHALL BE ADJUSTED AGAINST THE INCOME LIABLE FOR DEDUCTION UNDER THE SAME SECTION BUT IN RELATION TO THE INCOME FROM OTHER UNIT. AS FAR AS THAT ASPECT IS CONCERNED, THE COUNSEL AGREE THAT THE SAME IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THIS CONTROVERSY HAS BEEN DEALT WITH BY A DI VISION BENCH OF THIS COURT IN THE CASE OF HINDUSTAN UNILLIVER LTD V.S. DEPUTY COMMISSIONER OF INCOME TAX & ANR., REPORTED IN (2010) 325 ITR 102. THE PARTIES AGREE THAT THE DISCUSSION OF THE DIVISION BENCH AND PARTICULARLY IN PARAGRAPH 17 OF THE JUDGMENT CO VERS THE POINT. 4 WE ARE OF THE OPINION THAT THE DIVISION BENCH DEALT WITH THE CONTROVERSY RAISED BEFORE US DIRECTLY. THE FINDING OF THE DIVISION BENCH, THEREFORE, WOULD CONCLUDE THIS ISSUE. THE FIRST QUESTION, THEREFORE, CANNOT BE TERMED AS A SUBSTANTIAL QUESTION OF LAW. 4. THUS THE ISSUE IS NOW COVERED BY THE DECISION OF HON'BLE HIGH COURT IN ASSESSEES OWN CASE. WE FURTHER NOTE THAT FOR THE A.Y. 2005 - 06, T HE ISSUE WAS AGAIN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL AND AGAIN CONFIRMED BY HON'BLE HIGH COURT. SIMILARLY FOR THE A.Y. 2009 - 10, THIS ISSUE WAS AGAIN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL. ACCORDINGLY, IN VIEW OF THE DECISION OF THIS TRIBUNAL AS WELL AS HON'BLE JURISDICTIONAL HIGH CAPGEMINI INDIA PVT. LTD 4 | P A G E COURT IN ASSESSEES OWN CASE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) QUA THIS ISSUE. 5. GROUND NO. 2 IS REGARDING THE DIRECTION GIVEN BY THE CIT(A) NOT TO DEDUCT DATA LINE COST FROM EXPORT TURNOVER WHILE COMPUTING THE DEDUCTION U/S 10A. 6. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS ISSUE IS AGAIN COVERED BY THE DECISION OF THIS TRIBUNAL AS WELL AS BY THE DECISION OF HON'BLE HIGH COURT IN ASSESSEES OWN CASE FOR A.Y. 2006 - 07. THE TRIBUNAL DECIDED THIS ISSUE IN FA VOUR OF THE ASSESSEE AND ON APPEAL BY THE REVENUE, THE HON'BLE HIGH COURT HAS CONFIRMED THE ORDER OF TRIBUNAL IN PARA 7 AS UNDER: - 7. UPON PERUSAL OF PARAGRAPHS 3 AND 4 OF THE ORDER UNDER CHALLENGE, WE FIND MUCH SUBSTANCE IN THE ARGUMENT OF MR. JASANI. THE DISPUTE WAS REGARDING DEDUCTION OF DATA LINE COSTS FROM EXPORT TURNOVERS. THE ASSESSEE INCURRED THE DATA LINE COSTS AND WHICH HAVE BEEN WORKED OUT BEFORE THE ASSESSING OFFICER. THE FIGURES ARE MENTIONED IN PARAGRAPH 3 OF THE ORDER OF TRIBUNAL. THE ASSE SSING OFFICER ASKED THE ASSESSEE TO EXPLAIN WHY ITS EXPENDITURE SHOULD NOT BE DEDUCTED FROM THE EXPORT TURNOVER IN VIEW OF THE ABOVE EXPLANATION OF SECTION 10A. THE ASSESSEE EXPLAINED THAT IT WAS INCURRED IN THE BUSINESS OF DEVELOPMENT AND EXPORT OF COMPUT ER SOFTWARE.' THE SOFTWARE DEVELOPMENT WORK WAS CARRIED OUT IN INDIA AT ITS DEVELOPMENT CENTERS IN INDIA AND ALSO IN SOME CASES ON SITES. THE ASSESSEE WAS NOT ENGAGED IN ANY TECHNICAL SERVICES OUTSIDE INDIA. IT DID NOT INCUR ANY FREIGHT EXPENSES. IT EXPLA INED THAT THE TELECOMMUNICATION CHARGES WERE INCURRED IN THE BUSINESS SOFTWARE DEVELOPMENT AT THE SOFTWARE UNDERTAKING OF THE ASSESSEE IN INDIA. THE ALTERNATE ARGUMENT WAS THAT THE EXERCISE THAT THE ASSESSEE HAD UNDERTAKEN WAS JUSTIFIED IN THE LIGHT OF THE LAW LAID DOWN BY THE TRIBUNAL AND PARTICULARLY THE SPECIAL BENCH IN THE CASE OF INCOME TAX OFFICER VS. SAK SOFT LTD., REPORTED IN 313 ITR (AT) 353. RELIANCE WAS ALSO PLACED UPON A JUDGMENT OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GEM PL US JEWELLERY INDIA LTD., REPORTED IN (2011) 330 ITR 175) (BOM.). THE TRIBUNAL MAY HAVE DISCUSSED THE ALTERNATE CONTENTION BUT WHAT IT HAS EXPRESSED ON PRIMARY CONTENTION, ACCORDING TO US, DOES NOT ARISE ANY SUBSTANTIAL QUESTION OF LAW. THE PRIMARY CONTENTION WAS THAT THE WAS THAT THE EXPENSES WHICH THE ASSESSING OFFICER DESIRED TO PICK WERE NOT INCURRED IN RELATION TO EXPORT AND, THEREFORE, CANNOT BE TERMED AS DEDUCTIONS PERMISSIBLE CAPGEMINI INDIA PVT. LTD 5 | P A G E FROM EXPORT TURNOVER. THESE EXPENSES HAVE BEEN INCURRED FOR THE PUR POSES OF THE BUSINESS OF SOFTWARE DEVELOPMENT AT THE SOFTWARE UNITS IN INDIA. IT IS THAT FINDING WHICH THE ASSESSING OFFICER WAS UNABLE TO CONTROVERT OR UNABLE TO BRING ANY CONTRARY MATERIAL TO DISPROVE THE SAME. IT IS IN THAT LIGHT THAT THE TRIBUNAL FOUND THAT THE ASSESSING OFFICER COULD NOT HAVE INSISTED ON THE DEDUCTION. IT IS THAT EXERCISE UNDERTAKEN BY THE ASSESSING OFFICER WHICH HAS NOT BEEN UPHELD BUT RATHER DISAPPROVED BY THE TRIBUNAL. THIS IS A FINDING PURELY ON THE FACTS AND PERTAINING TO THE BUS INESS OF THE ASSESSEE. THE FACTS PERTAINING TO THE ASSESSEES BUSINESS OF SOFTWARE DEVELOPMENT, THE CHARGES AND WHICH ARE CLAIMED TO HAVE INCURRED, ARE IN RELATION TO THE BUSINESS OF SOFTWARE DEVELOPMENT WITHIN INDIA. THEY COULD NOT BE SAID TO BE COSTS DED UCTIBLE FROM EXPORT TURNOVER FOR THE PURPOSE OF SECTION 10A OF THE ACT. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT ANY WIDER CONTROVERSY OR LARGER QUESTION DOES NOT REQUIRE ANY ANSWER. WE CAN LEAVE THAT ASPECT OPEN FOR THE DECISION IN AN APPROPRIATE CASE. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND IN RELATION TO THE BUSINESS OF THE ASSESSEE BEFORE US, IT IS NOT NECESSARY TO GO INTO THE OTHER CONTENTIONS RAISED BEFORE US BY THE REVENUE. 7. FOLLOWING THE DECISION OF HON'BLE HIGH COURT I N ASSESSEES OWN CASE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) QUA THIS ISSUE. CO NO. 172/MUM/2012 8. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1) IN THE EVENT OF GROUND NO.1 OF THE DEPARTMENTAL APPEAL BEING ALLOWED, THE CROSS OBJECTOR SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO REDUCE THE LOSS OF KOLKATA UNIT FROM THE PROFITS OF MUMBAI UNIT I (NON - 1OA UNIT) AND ITS THREE PROFIT MAKING UNIT S ELIGIBLE FOR DEDUCTION UNDER SECTION LOA ON A PRO - RATA BASIS. 2) IN THE EVENT OF GROUND NO.2, OF THE DEPARTMENTAL APPEAL BEING ALLOWED, THE CROSS OBJECTOR SUBMITS THAT THE DATA LINE COSTS OF THE UNITS FOLLOWING ELIGIBLE FOR DEDUCTION UNDER SECTION 10A BE REDUCED FROM TOTAL TURNOVER OF THE SAID UNITS AS WELL, AS UNDER : MUMBAI II RS.1,20,21 ,920/ - MUMBAI III RS.4,65,32,816/ - BANGALORE UNIT RS.1,62,45,497/ - CAPGEMINI INDIA PVT. LTD 6 | P A G E 9. BOTH THE GROUNDS RAISED BY IN CROSS OBJECTION ARE ALTERNATIVE PLEA OF THE ASSESSEE . SINCE THE ISSUE INVOLVED IN THE REVENUES APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE, THEREFORE, THE GROUNDS RAISED IN THE CROSS OBJECTION BECOMES INFRUCTUOUS AND ACCORDINGLY DISMISSED. 10. NOW WE TAKE UP THE APPEAL OF THE ASSESSEES IN ITA NO. 6477/MUM/2011, WHEREIN, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT GROUND NOS. 9, 10 AND 11 RAISED BEFORE HIM WERE NOT MAINTAINABLE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT SUCH GROUNDS OF APPEAL WERE NOT MAINTAINABLE FO R THE SOLE REASON THAT THERE WAS NO CLAIM EITHER IN THE RETURN OF INCOME OR BEFORE THE ASSESSING OFFICER. 3. THE LEARNED COMMISSIONER OFINCOME TAX (APPEALS) FAILED TO CONSIDER THAT HIS POWERS WERE CO - TERMINUS WITH THOSE OF THE ASSESSING OFFICER. 4. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO REDUCE THE REALIZED FOREIGN EXCHANGE LOSS OF RS.L ,06,53,043/ - FROM THE TOTAL TURNOVER OF THE MUMBAI - II UNIT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. LOA. 5. THE APPELLANT SUBMITS THAT THE A SSESSING OFFICER BE DIRECTED TO REDUCE THE REALIZED FOREIGN EXCHANGE LOSS OFRS.7,35,88,543/ - FROM THE TOTAL TURNOVER OF THE MUMBAI - III UNIT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. LOA. 6. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED T O REDUCE THE REALIZED FOREIGN EXCHANGE LOSS OF RS.48,66,489/ - FROM THE TOTAL TURNOVER OF THE MUMBAI - III UNIT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. LOA. 11. THE ONLY ISSUE ARISES IN THE APPEAL OF THE ASSESSEE IS REGARDING THE REJECTION OF CLAIM OF FO REIGN EXCHANGE LOSS TO BE REDUCED FROM THE TOTAL CAPGEMINI INDIA PVT. LTD 7 | P A G E TURNOVER. THE ASSESSEE HAS RAISED THIS GROUND BEFORE THE CIT(A) AND SUBMITTED THAT THE FOREIGN EXCHANGE LOSS REALIZED DURING THE YEAR WAS REDUCED FROM THE EXPORT TURNOVER WHILE COMPUTING DEDUCTION U/S 10A I N RESPECT OF THREE PROFIT MAKING 10A UNITS. HOWEVER, THE SAME WAS INADVERTENTLY NOT REDUCED FROM THE TOTAL TURNOVER. THE CIT(A) HAD REFUSED TO ENTERTAIN THE PLEA RAISED BY THE ASSESSEE ON THE GROUND THAT THIS ISSUE DOES NOT EMANATE FROM THE ASSESSMENT ORD ER. 12. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE CIT(A)HAS POWER AND JURISDICTION TO ENTERTAIN A FRESH PLEA WHEN THE ASSESSEE HAS INADVERTENTLY NOT REDUCED THE FOREIGN EXCHANGE LOSS FROM TOTAL TURNOVER BUT HAS AL READY REDUCED FROM THE EXPORT TURNOVER. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHARE HOLDERS 349 ITR 336. 13. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS NOT RAISED THIS ISSUE BEFORE THE ASSESSING OFFICER THEN THE CIT(A)HAS RIGHTLY REJECTED THE CLAIM OF ASSESSEE. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD . THERE IS NO DISPUTE THAT THE ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE ASSESSING OFFICER AND RAISED FIRST TIME BEFORE THE CIT(A). THE CIT(A) HAS DISMISSED THE GROUND RAISED BY THE ASSESSEE IN PARA 5.2 AS UNDER: - I HAVE CONSIDERED THE FACTS OF THE C ASE. THERE IS NO DISCUSSION ON THIS ISSUE IN THE ASSESSMENT ORDER. IN FACT THESE ISSUES ARE NOT EMANATING FROM THE ASSESSMENT ORDER. MOREOVER THERE WAS NO CLAIM OF THE APPELLANT EITHER IN RETURN OF INCOME OR BEFORE A.O. DURING ASSESSMENT PROCEEDINGS. IN TH E FACTS CAPGEMINI INDIA PVT. LTD 8 | P A G E AND CIRCUMSTANCES OF THESE GROUNDS OF APPEAL ARE NOT MAINTAINABLE. THERE GROUNDS OF APPEAL ARE, THEREFORE, DISMISSED. 15. THUS IT IS CLEAR THAT THE CIT(A) HAS DISMISSED THE GROUND RAISED BY THE ASSESSEE IN LIMINE AS NOT MAINTAINABLE ON THE GROUND THAT THE SAME DOES NOT EMANATE FROM THE ASSESSMENT ORDER. IT IS PERTINENT TO NOTE THAT THERE IS NO RESTRICTION ON THE POWER OF APPELLATE AUTHORITY IN ENTERTAINING THE FRESH CLAIM AS HELD BY HON'BLE JURISDICTIONAL HIGH COU RT IN THE CASE OF PRUTHVI BROKERS AND SHAREHOLDERS (SUPRA) . W HILE CONSIDERING THE ISSUE OF JURISDICTION OF THE APPELLATE AUTHORITY IN ENTERTAINING THE FRESH CLAIM THE HON'BLE HIGH COURT HAS HELD IN PARA 18 TO 24 AS UNDER: - 18. IN THE CASE BEFORE US, TH E CIT(A) AND THE TRIBUNAL HAVE HELD THE OMISSION TO CLAIM THE DEDUCTION OF RS.40,00,000/ - TO BE INADVERTENT. BOTH THE APPELLATE AUTHORITIES HELD, AFTER CONSIDERING ALL THE FACTS, THAT THE ASSESSEE HAD INADVERTENTLY CLAIMED A DEDUCTION OF RS.20,00,000/ - 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 E NTITLED TO THE DEDUCTION IN LAW IS ADMITTED AND, IN ANY EVENT, CLEARLY ESTABLISHED. IN THE CIRCUMSTANCES, THE RESPONDENT OUGHT NOT BE PREJUDICED. 19. THE ORDERS OF THE CIT(A) AND THE TRIBUNAL CLEARLY INDICATE THAT BOTH THE APPELLATE AUTHORITIES HAD EXERCIS ED 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 CORPN. LTD. (SUPRA) . THIS IS CLEAR FROM THE FACT THAT THESE JUDGMENTS HAVE BEEN EXPRESSLY REFERRED TO IN DETAIL BY THE CIT(A) AND BY THE TRIBUNAL. 20. WE WISH TO CLARIFY THAT BOTH THE APPELLATE AUTHORITIES HAVE THEMSELVES CONSIDERED THE ADDITIONAL CLAIM AND ALLOWED IT. THEY 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. 40,00,000/ - 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. 40,00,000/ - UNDER SECTION 43B OF THE ACT. 21. THE CONCLUSION THAT THE ERROR IN NOT CLAIMING THE DEDUCTION IN THE RETURN OF INCOME WAS INADVERTENT CANNOT BE FAULTED FO R MORE THAN ONE REASON. IT IS A FINDING OF FACT WHICH CANNOT BE TERMED PERVERSE. THERE IS NOTHING ON RECORD THAT MILITATES AGAINST THE FINDING. THE APPELLANT HAS NOT SUGGESTED, MUCH LESS CAPGEMINI INDIA PVT. LTD 9 | P A G E ESTABLISHED THAT THE OMISSION WAS DELIBERATE, MALA - FIDE OR EVEN OTHER WISE. THE INFERENCE THAT THE OMISSION WAS INADVERTENT IS, THEREFORE, IRRESISTIBLE. 22. IT WAS THEN SUBMITTED BY MR. GUPTA THAT THE SUPREME COURT HAD TAKEN A DIFFERENT VIEW IN GOETZE (INDIA) LTD ( SUPRA). WE ARE UNABLE TO AGREE. THE DECISION WAS RENDERED BY A BENCH OF TWO LEARNED JUDGES AND EXPRESSLY REFERS TO THE JUDGMENT OF THE BENCH OF THREE LEARNED JUDGES IN NATIONAL THERMAL POWER COMP. LTD. ( SUPRA). THE QUESTION BEFORE THE COURT WAS WHETHER THE APPELLANT - ASSESSEE COULD MAKE A CLAIM FOR DEDUCTION, OTHER THAN BY FILING A REVISED RETURN. AFTER THE RETURN WAS FILED, THE APPELLANT SOUGHT TO CLAIM A DEDUCTION BY WAY OF A LETTER BEFORE THE ASSESSING OFFICER. THE CLAIM, THEREFORE, WAS NOT BEFORE THE APPELLATE AUTHORITIES. THE DEDUCTION WAS DISALLOWED BY THE ASS ESSING OFFICER ON THE GROUND THAT THERE WAS NO PROVISION UNDER THE ACT TO MAKE AN AMENDMENT IN THE RETURN OF INCOME BY MODIFYING AN APPLICATION AT THE ASSESSMENT STAGE WITHOUT REVISING THE RETURN. THE COMMISSIONER OF INCOME - TAX (APPEALS) ALLOWED THE ASSESS EE'S APPEAL. THE TRIBUNAL, HOWEVER, ALLOWED THE DEPARTMENT'S APPEAL. IN THE SUPREME COURT, THE ASSESSEE RELIED UPON THE JUDGMENT IN NATIONAL THERMAL POWER CO. LTD. (SUPRA) CONTENDING THAT IT WAS OPEN TO THE ASSESSEE TO RAISE THE POINTS OF LAW EVEN BEFORE T HE TRIBUNAL. THE SUPREME COURT HELD : - '4. THE DECISION IN QUESTION IS THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254 OF THE INCOME - TAX 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. HO WEVER, 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. THERE SHALL BE NO ORDER AS TO COSTS .' [EMPHASIS SUPPLIED] 23. IT IS CLEAR TO US THAT THE SUPREME COURT DID NOT HOLD ANYTHING CONTRARY TO WHAT WAS HELD IN THE PREVIOUS JUDGMENTS TO THE EFFECT THAT EVEN IF A CLAIM IS NOT MADE BEFORE THE ASSESSING OFFICER, IT CAN BE MADE BEFORE THE APPELLATE A UTHORITIES. THE JURISDICTION OF THE APPELLATE AUTHORITIES TO ENTERTAIN SUCH A CLAIM HAS NOT BEEN NEGATED BY THE SUPREME COURT IN THIS JUDGMENT. IN FACT, THE SUPREME COURT MADE IT CLEAR THAT THE ISSUE IN THE CASE WAS LIMITED TO THE POWER OF THE ASSESSING AU THORITY AND THAT THE JUDGMENT DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL UNDER SECTION 254. 24. A DIVISION BENCH OF THE DELHI HIGH COURT DEALT WITH A SIMILAR SUBMISSION IN CIT V. JAI PARABOLIC SPRINGS LTD. [2008] 306 ITR 42 / 172 TAXMAN 258 . THE DIVISION BENCH, IN PARAGRAPH 17 OF THE JUDGMENT HELD THAT THE SUPREME COURT DISMISSED THE APPEAL MAKING IT CLEAR THAT THE DECISION WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY A REVISED RETURN AND DID NOT IMPINGE ON THE POWERS OF THE TRIBUNAL. IN PARAGRAPH 19, THE DIVISION BENCH HELD T HAT THERE WAS NO PROHIBITION ON THE POWERS OF THE TRIBUNAL TO ENTERTAIN AN ADDITIONAL GROUND WHICH, ACCORDING TO THE TRIBUNAL, ARISES IN THE MATTER AND FOR THE JUST DECISION OF THE CASE. CAPGEMINI INDIA PVT. LTD 10 | P A G E 16. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE RECORD OF ASSESSING OFFICER FOR CONSIDERING AND DECIDING THE CLAIM OF THE ASSESSEE AS PER LAW AFTER GIVING A PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 17 . IN THE RESULT, APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED AND THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUCNED IN THE OPEN COURT ON THIS 18 TH DAY OF MARCH 2015 VKNS'K DH ?KKS'K.KK [KQYS U;K;KY; ES FNUKAD 18 EKPZ 2015 DKS DH XBZA SD/ - SD/ - ( RAJENDRA ) (VIJAY PAL RAO) ( ACCOUNTANT MEMBER / YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; ) MUMBAI DATED 18 .03.2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI