By K. B. Bhujle, Advocate
New Page 1
22 Appellate Tribunal : Power of : A.Y.
1990-91 : The Tribunal has power to allow claim for deduction which was not made
in the return of income : Assessee claimed 1/5th revenue expenditure on deferred
basis: Tribunal can allow full revenue expenditure on accrual basis.
[CIT v. Jai Parabolic Springs Ltd., 172 Taxman 258
(Del.)]
For the A.Y. 1990-91, the assessee had written off in the
books certain revenue expenditure over a period of 5 years from the relevant
assessment year and, accordingly, the assessee claimed deduction of 1/5th of the
expenses in the relevant year on deferred basis. The claim was allowed by the
AO. In appeal, the CIT(A) allowed the claim for deduction of the entire revenue
expenditure in the relevant year. The Tribunal restored the matter to the AO to
consider the issue afresh. The AO again disallowed the claim holding that the
same was not claimed in the return of income. The CIT(A) allowed the claim. The
Tribunal upheld the order of the CIT(A).
In appeal before the High Court, the Revenue contended that
the Tribunal was not right, in law, in allowing the deduction when no such claim
was made in the return of income. The Delhi High Court dismissed the appeal
filed by the Revenue and held as under :
“(i) The revenue expenditure, which is incurred wholly and
exclusively for the purpose of business, must be allowed in its entirety in
the year in which it is incurred. It cannot be spread over a number of years
even if the assessee has written it off in his books over a period of a number
of years.
(ii) There is no prohibition on the powers of the Tribunal
to entertain an additional ground which according to the Tribunal arises in
the matter for the just decision of the case. Therefore, there was no
infirmity in the order of the Tribunal.”
