COMMISSIONER OF INCOME-TAX VS BHARAT CURIO STORES, 2000 PTD-ALLAHABAD-HIGH-COURT-INDIA 2106 (1997)

Income-tax---

---Appeal to AAC---Power of AAC---Export markets development allowance---Weighted deduction claimed in respect of some items before Income-tax Officer ---AAC can consider claim in respect of other items-- Indian Income Tax Act, 1961.

Held, that since the assessee had already claimed weighted deduction under section 35B of the Income Tax Act, 1961, in respect of some of the items and claimed the same benefit before the, Appellate Assistant Commissioner on some more items, it cannot be said that the assessee set up altogether a new claim. The assessee having already set up the claim for weighted deduction before the Income-tax Officer, the Appellate Tribunal was right in directing the Appellate Assistant Commissioner to entertain the claim of the assessee on additional items, particularly when there was no finding by any authority that the material facts in regard to the additional items were not available on record.

Madhu Jayanti (P.) Ltd. v. CIT (1985) 154ITR 277 (Cal.) fol.

Bharat Ji Agarwal for the Commissioner.

JUDGMENT

Pursuant to the directions of the High Court made under section 256(2) of the Income Tax Act. 1961 (briefly, "the Act"), the Income-tax Appellate Tribunal referred the following question relating to the assessment years 1976-77 and 1977-78 for the opinion of this Court:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the Appellate Commissioner to entertain the claim of the assessee for weighted deduction on additional items on which the claim was not made in the return before the Income-tax Officer?"

The Appellate Tribunal found that whereas for the assessment year 1976-77, the assessee claimed weighted deduction on the new items: (i) stationary; (ii) postage; and (iii) export promotion, for the assessment year 1977-78, weighted deduction under section 35B was claimed only on one addition item, namely, salaries, before the Appellate Assistant Commissioner.

The Appellate Assistant Commissioner did not entertain the additional claims of the assessee under section 35B for both the assessment years.

On further appeal, the Appellate Tribunal directed the Appellate Assistant Commissioner to entertain the claim of the assessee for weighted deduction on additional items for both the assessment years and then decide the claim of the assessee for weighted deduction afresh.

The only question is whether the Appellate Tribunal was right in giving the aforesaid direction to the Appellate Assistant Commissioner.

Sri Bharat Ji Agarwal, learned standing counsel, submits before us that the assessee failed to raise any claim in regard to the additional items before the Income-tax Officer for both the assessment years and also no material in support of the additional items was filed before the Income-tax Officer and, therefore, the Appellate Tribunal was not right in directing the Appellate Assistant Commissioner to entertain the additional items. It is not disputed that for both the assessment years, the claim for weighted deduction was set up by the assessee under section 35B of the Act in respect of some of the items.

In Madhu Jayanti (P.) Ltd. v. CIT (1985) 154 ITR 277, the Calcutta High Court while considering almost the same question, held that by claiming weighted deduction on more items before the Appellate Assistant Commissioner, the assessee simply sought only to enhance or expand its original claim by including therein other items, and that no new claim can be said to have been set up in regard to weighted deduction under section 35B.

In Madhu Jayanti (P.) Ltd v. CIT (1985) 154 ITR 277 (Cal.), the facts, in brief, were that before the Assessing Officer, weighted deduction was claimed only in respect of four items. In appeal before the Appellate Assistant Commissioner, the assessee sought weighted deduction under section 35B on six additional items and in that factual background, the Calcutta High Court took the view that the assessee, simply enhanced or expanded its original claim and the assessee's case was not of setting up altogether a new claim. We quite agree with the view taken by the Calcutta High Court. Since the assessee had already claimed weighted deduction under section 35B in respect of the items and claimed the same benefit before the Appellate Assistant Commissioner, on some more items, it cannot be said that the assessee set up altogether a new claim. The assessee having already set up the claim for weighted deduction before the Income-tax Officer, the Appellate Tribunal was right in directing the Appellate Tribunal Assistant Commissioner to entertain the claim of the assessee on additional items, particularly when there was no finding by any authority that the material facts in regard to the additional items were not available on record.

In view of the aforesaid discussion, we answer the aforementioned question in the affirmative, that is, in favour of the assessee and against the Revenue.

M.B.A./4099/FCReference answered.