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Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI B.R. BASKARAN
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
Both the appeals filed by the assessee are directed against the orders passed by Ld. CIT(A)-5, Bengaluru and it relates to the assessment years 2013-14 & 2014-15.
In both assessment years i.e. 2013-14 & 2014-15, the assessee has raised following issues:- a) Disallowance made u/s 40(a)(ia) of the Income-tax Act,1961 ['the Act' for short]. b) Rejection of claim for deduction u/s 10AA of the Act. & 1046/Bang/2018 M/s. Opto Cardiac Care Ltd., Bangalore
The Ld. A.R. submitted that the assessee is engaged in the business of manufacture and sale of various types of non-invasive medical devices. The A.O. completed the assessment by making various additions. In both the years, the assessee did not claim deduction u/s 10AA of the Act in the return of income since it declared loss in both the years. When the A.O. made huge disallowances in both the years, the loss turned into profit and hence the assessee claimed deduction u/s 10AA of the Act before the A.O in both the years. However, the A.O. rejected the claim holding that the assessee can make fresh claim only by filing return of income. In this regard, he placed reliance on the decision rendered by Hon’ble Supreme Court in the case of Goetz India Ltd (284 ITR 323). The A.O. also observed that the assessee has not filed Form No.56F before him in both the years. The Ld. CIT(A) confirmed the rejection of claim for deduction u/s 10AA of the Act in both the years.
The Ld. A.R. submitted that the assessee did not file Form No.56F in these two years since it did not claim deduction u/s 10AA of the Act in view of the huge loss declared in the return of income. He submitted that deduction u/s 10AA of the Act will be available only if there is profit from the eligible undertakings. However, after the disallowance made by the A.O., the income turned into positive figure and hence the assessee made the claim for deduction u/s 10AA of the Act. However, the A.O. rejected the same.
The Ld. A.R. submitted that the assessee will not be contesting other grounds, if deduction u/s 10AA of the Act is given. He also submitted that the disallowances made by the A.O. would & 1046/Bang/2018 M/s. Opto Cardiac Care Ltd., Bangalore
Page 3 of 5 go to increase the profit of the business of the assessee, which is eligible for deduction u/s 10AA of the Act. Accordingly, he prayed that the matter may be restored to the file of A.O. with the direction to allow deduction u/s 10AA of the Act on the profit computed after including all the disallowances made by the A.O.
The Ld A.R submitted that the assessee had obtained Form No.56F for AY 2013-14 and it was uploaded on 29-03-2014 prior to the completion of the assessment. The copy of the same is placed at pages 33 to 35 of the paper book. However, the AO failed to consider the same, since he was of the view that the fresh claim could be made by the assessee by filing revised return of income. He submitted that the Hon’ble Supreme Court in the case of Goetz India Ltd (supra) has specifically observed that the order so passed by the Hon’ble Supreme Court does not impinge the power of the Tribunal to admit additional claims. Accordingly he prayed that the AO may be directed to allow the claim for deduction u/s 10AA of the Act in both the years.
When it was pointed out that the assessee has not obtained Form No.56F for AY 2014-15, the Ld A.R submitted that the assessee has suffered huge losses due to damages caused to its plant located in Visakhapatnam due to HudHud Cyclone and hence all its assets have been attached under SAFAESI Act. Hence the assessee could not immediately lay its hands on the books of accounts. Accordingly he prayed that the issue of deduction u/s 10AA of the Act may be restored to the file of AO for AY 2014-15 also and the assessee shall make all endeavor to file Form No.56F before the AO in the set aside proceedings. & 1046/Bang/2018 M/s. Opto Cardiac Care Ltd., Bangalore
Page 4 of 5 8. We heard Ld D.R and perused the record. From the assessment orders of both the years, we notice that the assessee has put forth its claim for deduction u/s 10AA of the Act by filing revised computation of income. The AO rejected the claim on the reasoning that the said claim should be made by filing revised return of income and further the Form No.56F was not filed. However, we notice that the assessee has uploaded Form No.56F electronically to the AO for AY 2013-14. The Ld A.R admits that Form No.56F is not available for AY 2014-15 and the assessee could not lay its hands on its books of accounts due to difficulties faced by it, which was explained by Ld A.R. The Hon’ble Supreme Court, in the case of Goetz India Ltd (supra), has specifically observed that the order so passed by the Hon’ble Supreme Court does not impinge the power of the Tribunal to admit additional claims. Considering the facts and circumstances of the case and in the interest of substantial justice, we are of the view that the claim for deduction u/s 10AA of the Act should be admitted in both the years. Accordingly, we admit the same in both the years and restore the same to the file of AO for examining the claim in accordance with the law. The assessee is also directed to furnish all necessary documents in support of its claim for deduction u/s 10AA of the Act in both the years. After affording adequate opportunity to the assessee, the AO may take appropriate decision in accordance with law in both the years.
Since the prayer of the assessee for examining the claim for deduction u/s 10AA of the Act is admitted, other grounds urged by the assessee relating to other disallowances are rejected in both the years. & 1046/Bang/2018 M/s. Opto Cardiac Care Ltd., Bangalore
Page 5 of 5 10. In the result, both the appeals of the assessee are treated as partly allowed.
Order pronounced in the open court on 19th Apr, 2022.