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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER :
The assessee filed this appeal against the order of Commissioner of Income Tax (Appeals)-13, Chennai in dated 10.11.2017 for assessment year 2005-06.
The AR submitted that M/s. Iljin Automotive Pvt. Ltd., the assessee, is engaged in the manufacture of automobile components, admitted total income of Rs. 8,24,20,664/- for assessment year 2005-
In the computation made, the assessee failed to claim certain revenue expenditure which were treated as capital expenditure in the books of accounts. At the time of scrutiny assessment by a letter dated 11.12.2008, the assessee submitted that it has capitalized expenses at Rs. 35,97,477/- comprising repairs and maintenance, erection of water line, factory improvement, painting of shop floor.
Since, they were of revenue expenditure, it requested to allow such expenditure after withdrawing the depreciation claimed by the assessee on them. However, in the assessment order, the AO has not dealt this aspect at all. Hence, it filed an appeal before the Ld. CIT(A).
The Ld. CIT(A) dismissed the appeal, as this aspect was not mentioned in the assessment order.
Aggrieved against that order, the assessee filed this appeal pleading, inter alia, that the Ld. CIT(A) did not consider the merit of the contention of the assessee that the appellate authority has power to consider the matter ignored and not considered by the AO and also the legal position that the appellate authority has power to consider on :-3-: merit new grounds of appeal. In spite of the facts that the assessee has brought to the notice of the Ld. CIT(A), the decisions of various Hon’ble courts and ITATs etc., the Ld. CIT(A) erred in not appreciating the facts & law and hence the appeal may be allowed. Per contra, the Ld. DR supported the orders of the lower authorities.
We heard the rival submissions. Though, it is a fact that the assessee has not claimed the impugned expenditure as revenue expenditure in the computation of income, however, during the course of assessment it has brought such facts to the notice of the Assessing Officer and pleaded to allow the claim after withdrawing the proportionate depreciation on such capitalised expenditure. It is settled that the purpose of assessment proceedings before the taxing authorities is to assessee correctly the tax liability of an assessee in accordance with law. Courts have held that to achieve this objective, there is no reason why a new grounds of appeal should not be allowed to be raised before the appellate authorities etc. Since, the facts on the basis of which the issues raised are on record at the assessment proceedings itself, following the decision of the Supreme Court in the case of Goetze (India) Ltd. vs CIT (2006) 284 ITR 323 (SC), we deem it fit to remit this issue to the AO for a fresh examination. The AO is :-4-: at full liberty to examine the claim and decide the issues in accordance with law. To this extent, the appeal is treated as partly allowed for statistical purposes.
In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.
Order pronounced in the open court on 23rd October, 2018 at Chennai.