EURO SHOES COMPONENTS LTD,VELLORE vs. ACIT , VELLORE

On the contrary, Ms. Anita, the Ld. Departmental Representative, submitted that unless the claim is made in the return of income, in view of the judgment of Apex Court in Goetze (India) Ltd. (supra), the Assessing Officer is not expected to consider the same. Admittedly, according to the Ld. D.R., the assessee has not made any claim in the return of income and it was made by way of a letter during the course of assessment proceeding, therefore, the Assessing Officer has rightly rejected the claim of the assessee.

We have considered the rival submissions on either side and perused the relevant material available on record. In respect of reversal of excess depreciation and disallowance under Section 40(a)(ia) of the Act, the assessee admittedly has not made any claim and it was claimed by way of a letter dated 23.02.2016. The Assessing Officer by applying the judgment of Apex Court in Goetze (India) Ltd. (supra), disallowed the claim of the assessee. The question arises for consideration is whether this Tribunal can entertain the claim of the assessee even though it has not claimed in the return of income? This issue was examined by the Madras High Court in Abhinitha Foundation Pvt. Ltd. (supra). the Madras High Court found that failure to advert to the claim in the original return or in the revised return cannot denude the appellate authorities of their power to consider the claim if the relevant material is available on record and is otherwise tenable in law. In view of this judgment of Madras High Court, this Tribunal is of the considered opinion that this Tribunal can entertain the claim of the assessee even though it was not made in the return of income. Moreover, the Apex Court itself in the case of CIT v. Shelly Products and Another (2003) 261 ITR 367 found that the assessee can make claim during the course of assessment proceeding which is omitted to be made in the return of income.

In view of the above, this Tribunal is unable to uphold the orders of both the authorities below. Therefore, orders of both the authorities below are set aside and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer shall consider the issue with regard to reduction of reversal of excess depreciation and reduction of disallowance under Section 40(a)(ia) of the Act as claimed by the assessee in the letter dated 23.02.2016 and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

The next issue arises for consideration is additional depreciation.

Shri A. Mahesh, the Ld. representative for the assessee, submitted that the assessee admittedly purchased a new machinery and eligible for additional depreciation of 20%. During the year under consideration, according to the Ld. representative, the Assessing Officer allowed 10%. The balance amount was to be carried forward and to be allowed for assessment year 2014-15. The Ld. representative further submitted that the appeal of the assessee for assessment year 2014-15 is also before the Tribunal in . Referring to the Explanatory Note to proviso to Section 32(1)(iia) of the Act, the Ld. representative submitted that this proviso was held to be prospective in nature by CIT(Appeals). Accordingly, he rejected the claim of the assessee.

We heard Ms. Anita, the Ld. Departmental Representative also. Admittedly, Section 32(1)(iia) of the Act was amended for granting additional depreciation in the subsequent year in case it cannot be allowed in the year in which machinery was installed. The assessee admittedly installed a new machinery and used the same for less than 180 days. Therefore, the Assessing Officer granted 10% of additional depreciation during the year under consideration and the balance was disallowed on the ground that the amendment will be operative in prospective. The Madras High Court found that the amendment is retrospective in operation. Therefore, both the authorities below are not justified in disallowing the claim of the assessee. Accordingly, the orders of both the authorities below are set aside and the Assessing Officer is directed to allow remaining 50% depreciation during the assessment year 2014-15.

The next issue arises for consideration is grant of interest of ₹2,46,024/- as against the correct interest of ₹4,73,782/-. This issue is raised by the assessee for assessment year 2013-14.

We heard Shri A. Mahesh, the Ld. representative for the assessee and Ms. Anita, the Ld. Departmental Representative. The CIT(Appeals) directed the Assessing Officer to verify the claim made by the assessee. This Tribunal is of the considered opinion that the grant of interest has to be verified on the facts available on record by the Assessing Officer. Therefore, the Assessing Officer is directed to verify the claim of the assessee with regard to grant of interest and pass an order afresh after giving a reasonable opportunity to the assessee.

The next issue arises for consideration for assessment year 2013-14 is credit of ₹8,27,348/- under Section 115-O of the Act in respect of distribution tax as against the actual tax paid ₹20,92,703/-.

Shri A. Mahesh, the Ld. representative for the assessee, submitted that while making payment with regard to distribution tax, the assessee has wrongly uploaded the assessment year. The Assessing Officer claims that he has no power to rectify the mistake committed by the assessee.

We heard Ms. Anita, the Ld. Departmental Representative also. This Tribunal is of the considered opinion that even though the payment was made wrongly through online, the Assessing Officer being the assessing authority has the jurisdiction and power to verify the claim of the assessee whether the assessee has wrongly paid the tax for other assessment year or for this assessment year. After verification, if the Assessing Officer finds that there is anything wrong in uploading the payment in respect of the assessment year, necessary correction should be made. Wrong uploading of assessment year through online cannot be taken advantage by the Department. The proceeding before the Assessing Officer being a judicial proceeding under Section 136 of the Act, the Assessing Officer has to Act judiciously and rectify the mistake if any committed by the assessee in making payment of taxes. Therefore, this Tribunal is of the considered opinion that the matter needs to be verified by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the matter is remitted back to the file of the Assessing Officer. The Assessing Officer shall verify the distribution tax paid by the assessee under Section 115-O of the Act and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

The next issue arises for consideration for assessment year 2013-14 is levy of interest under Section 115P of the Act.

We heard Shri A. Mahesh, the Ld. representative for the assessee and Ms. Anita, the Ld. Departmental Representative. Levy of interest is a factual aspect which needs to be verified on the basis of the material. The assessing authority is a right person to verify the claim of interest under Section 115P of the Act. Accordingly, this issue is remitted back to the file of the Assessing Officer.

Now coming to assessment year 2014-15, Shri A. Mahesh, the Ld. representative for the assessee, submitted that a revised return was filed within the time limit provided under the Act.

We heard Ms. Anita, the Ld. Departmental Representative also. The Ld. D.R. submitted that it is not known whether the revised return was filed within the time limit or not.

Having heard the Ld. representative for the assessee and the Ld. Departmental Representative, this Tribunal is of the considered opinion that when the assessee has filed the revised return within the time limit provided under the provisions of Income-tax Act, the same has to be considered by the Assessing Officer. However, it is not known whether the revised return was filed within the time provided under the Act or not? Hence, orders of both the authorities below are set aside and the Assessing Officer is directed to re- examine the matter and find out whether the assessee filed the revised return within the time limit provided under the Act and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.