Professional Update

(Income Tax Case laws)

Civil Appeal 6274 of 2013 (Supreme Court).

                        Shriram Investments

vs

Commissioner of Income tax III, Chennai.

Ratio.

Hon’ble Supreme Court held Ld. AO has no jurisdiction to allow the claim of expense, made in the income tax return. The Hon’ble Tribunal under section 254 has the power to grant the deduction of the expenditure, which is not claimed in the return.

Facts.

The appellant has filed an appeal against the high court order of Madras. The appellant has file the income tax return for the assessment year 1989-90. The appellant filed a revised return for the assessment year 1989-90 u/s 139(5) of the income tax act, for which the deduction is being claimed. The CIT(A) dismissed the appeal of the appellant on the ground that revised return was barred by limitation. The ITAT allowed the appeal and remanded the matter back to the Ld. AO for analysing the deduction to be claimed. The Revenue filed the appeal, wherein the High court set aside the tribunal order and restored the order of the CIT(A), since the revised return was barred by limitations.

Issue.

Whether the deduction could be claimed by the appellant based on the facts and circumstance of the case.

Held.

The Supreme Court held that the Hon’ble Tribunal by using the power provided under section 254 of the income tax act, can provide the deduction of the appellant, which the appellant didn’t claim in the return. But the Ld. AO has no jurisdiction to allow the deduction, which is not claimed in the return of income.

Therefore, the Impugned order of the High Court is sustained.

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CA Manoj Garg

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