THE JCIT (OSD) RG 3(3), MUMBAI v. M/S. RELIANCE INFOCOMM LTD, NAVI MUMBAI

ITA 3600/MUM/2008 | 2004-2005
Pronouncement Date: 12-03-2010 | Result: Dismissed

Appeal Details

RSA Number 360019914 RSA 2008
Assessee PAN AAACR4472J
Bench Mumbai
Appeal Number ITA 3600/MUM/2008
Duration Of Justice 1 year(s) 9 month(s) 19 day(s)
Appellant THE JCIT (OSD) RG 3(3), MUMBAI
Respondent M/S. RELIANCE INFOCOMM LTD, NAVI MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 12-03-2010
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year 2004-2005
Appeal Filed On 23-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI A.L. GEHLOT A.M. AND SMT. P. MADHAVI DEVI J.M. ITA NO. 3600/M/2008 ASSESSMENT YEAR: 2004-05 DY. COMMISSIONER OF INCOME-TAX APPELLANT CIRCLE 3(3) MUMBAI VS. M/S RELIANCE INFOCOM LTD. RESPONDENT (NOW MERGED WITH M/S RELIANCE COMMUNICATION LTD.) C BLOCK DHIRUBHAI AMBANI KNOWLEDGE CITY KOPAR KHAIRANE THANE BLEAPUR ROAD NAVI MUMBAI 400 710. (PAN AAACR4472J) APPELLANT BY : MR. R.N. JHA RESPONDENT BY : ARVIND SONDE ORDER PER A.L. GEHLOT A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- III MUMBAI PASSED ON 24.03.2008 FOR THE A SSESSMENT YEAR 2004- 05. WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE REVENUE SHARE PAYMENT OF RS. 1 85 20 48 475/- AS REVENUE EXPENDITURE EVEN THOUGH THIS AMOUNT WAS NOT CLAIMED IN THE RETURN OF INCOME FILED BY TH E ASSESSEE. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING TELECOMMUNICAT ION SERVICES VIZ. BASIC TELEPHONE SERVICES NATIONAL LONG DISTANCE SE RVICES (NLD) AND INTERNATIONAL LONG DISTANCE SERVICES (ILD). ON SCRU TINY OF THE RETURN OF INCOME FILED BY THE ASSESSEE IT WAS OBSERVED BY TH E AO THAT THE ASSESSEE COMPANY HAD DISALLOWED LICENCE FEES AS AMORTIZED OF RS. 65 45 67 069/- ITA NO. 3600/M/08 RELIANCE INFOCOM 2 AND REVENUE SHARE PAYMENTS OF RS. 1 85 20 48 475/- DEBITED TO THE PROFIT & LOSS ACCOUNT AND HAD CORRESPONDINGLY CLAIMED RS. 1 35 73 16 518/- U/S 35ABB OF THE INCOME-TAX ACT 1961. HOWEVER THE ASSESSEE COMPANY VIDE LETTER DATED 8/12/06 HAD STATED THAT BY MISTA KE REVENUE SHARE PAYMENT OF RS. 1 85 20 48 475/- HAD BEEN DISALLOWED AND CLAIMED U/S 35ABB IN THE COMPUTATION OF INCOME ALTHOUGH THE REV ENUE SHARE PAYMENT AS IN THE NATURE OF REVENUE EXPENDITURE INC URRED FOR THE PURPOSE OF THE BUSINESS AND AS SUCH IS ENTITLED TO DEDUCTION IN THE YEAR OF PAYMENT AND IS NOT SUBJECT TO DEDUCTION U/S 35AB B OF THE ACT. THE AO HAS NOT ACCEPTED THE ASSESSEES CLAIM BY OBSERVI NG AS UNDER:- 4. I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE AS SESSEE AND FIND THAT ARGUMENT OF THE ASSESSEE IS NOT VALID IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (IN DIA) LTD. VS. CIT (284 ITR 323)(2006). IN THAT CASE ALSO THE ASSESSEE HAD SOUGHT TO CLAIM A DEDUCTION BY WAY OF A LETTER ADDRESSED TO T HE AO WHICH WAS DISALLOWED BY THE AO ON THE GROUND THAT THERE WAS N O PROVISION IN THE INCOME TAX ACT 1961 ALLOWING AN AMENDMENT IN T HE RETURN WITHOUT A REVISED RETURN. THE TRIBUNAL AND THE HIGH COURT CONFIRMED THE ACTION OF THE AO AND EVEN THE SUPREME COURT DIS MISSED THE APPEAL OF THE ASSESSEE. HENCE THE CLAIM OF THE ASS ESSEE IS REJECTED. 3. ON APPEAL BY THE ASSESSEE THE CIT(A) HELD AS UN DER:- 4. I HAVE PERUSED THE FACTS OF THE CASE. THERE IS N O DISPUTE THAT LICENCE FEE UNDER CONSIDERATION IN THE FORM OF REVE NUE SHARE PAYMENT IS ALLOWABLE REVENUE EXPENDITURE. THE ONLY ISSUE IS WHETHER DESPITE THERE BEING NO CLAIM OF REVENUE EXPENDITURE IN THE FORM OF A REVISED RETURN THERE BEING NO REVISED RETURN THE CLAIM MA DE BY APPELLANT IN ASSESSMENT PROCEEDINGS BY WAY OF A LETTER HAS TO BE TAKEN INTO ACCOUNT FOR COMPUTING TAXABLE INCOME OF APPELLANT O R NOT. THE HONBLE SUPREME COURT HAVE CLEARLY HELD THAT A VALI D CLAIM CAN BE PUT UP EITHER IN THE RETURN OF INCOME OR IN THE REV ISED RETURN. CONSEQUENTLY A CLAIM MADE THROUGH A SIMPLE LETTER B EFORE AO CAN BE SAID TO BE NOT A VALID CLAIM CAN BE PUT UP EITHER I N THE RETURN OF INCOME OR IN THE REVISED RETURN. CONSEQUENTLY A CLA IM MADE THROUGH A SIMPLE LETTER BEFORE AO CAN BE SAID TO BE NOT A V ALID CLAIM. THAT IS EXACTLY THE STAND OF AO. THIS DECISION WAS CONSIDER ED BY HONBLE MUMBAI ITAT IN THE CASE OF CHICAGO INEMATIC INDIA L TD. AND HONBLE TRIBUNAL HELD THAT DESPITE BEING SO THAT A CLAIM P UT UP THROUGH A LETTER IS NOT A VALID CLAIM AO IS DUTY BOUND TO CO MPUTE THE CORRECT TAXABLE INCOME OF APPELLANT. IN COMING TO THIS CONC LUSION THEY HAVE DRAWN SUPPORT FROM THE CBDP CIRCULARS WHICH HAVE B EEN ANALYSED IN DETAILS BY ITAT IN THE SAID ORDER. THE ITAT HAS CONSIDERED TWO CIRCULARS BEARING NUMBERS 14 (XL 35) DATED 11.04. 1955 AND F.81/27/65-IT(B) DATED 18.05.1965 AND HAVE OBSERVED AS FOLLOWS:- ITA NO. 3600/M/08 RELIANCE INFOCOM 3 THESE CIRCULARS ISSUED BY THE CBDT ALMOST 4-5 DECA DES BEFORE CAST A DUTY ON THE AO TO COLLECT ONLY THE LEGITIMATE TAX . IT IS A SETTLED POSITION THAT THE CIRCULARS ISSUED BY THE BOARD ARE BINDING ON THE SUBORDINATE INCOME TAX AUTHORITIES AND IF THE CBDT ISSUES DIRECTIONS WHICH ARE BENEFICIAL TO THE ASSESSEE ALTHOUGH THE SAME MAY NOT BE DIRECTLY IN CONSONANCE WITH THE PROVISIONS OF LAW EVEN THEN THESE INSTRUCTIONS HAVE TO BE GIVEN EFFECT TO AND ADHERED TO BY THE CONCERNED AUTHORITIES WHILE COMPLETING ASSESSMENTS AND TO AVOID ADMINISTRATIVE HARDSHIP TO THE ASSESSEE. THE CBDT I S THE APEX BODY FOR TAX ADMINISTRATION AND IT CAN ALSO ISSUE DIRECT ION WHICH ARE FOR THE BENEFIT OF THE ASSESSEES TOUGH SUCH DIRECTION S MAY NOT BE IN CONSONANCE WITH THE PROVISIONS OF LAW HENCE IF A CIRCULAR IS ISSUE DIRECTING THE ASSESSING AUTHORITIES TO GRANT RELIEF S/REFUNDS WHILE COMPLETING THE ASSESSMENT PROCEEDINGS EVEN THOUGH SUCH CIRCULAR MAY BE AT VARIANCE WITH THE LAW AS PRONOUNCED BY T HE SUPREME COURT YET THE SAME WOULD BE BINDING ON THE SUBORDI NATE INCOME-TAX AUTHORITIES. THEREFORE CIRCULARS OF SAME NATURE WH ICH HAVE BEEN ALREADY ISSUED WOULD NOT BECOME IRRELEVANT OR CAN B E IGNORED. ADMITTEDLY THE CIRCULAR ISSUED IN THE YEAR 1955 HA S NOT BEEN WITHDRAWN; HENCE IT HAS GOT BINDING FORCE ON THE S UBORDINATE AUTHORITIES EVEN AS ON DATE. ACCORDINGLY THE AO IS BOUND TO ASSESS THE CORRECT INCOME AND FOR THIS PURPOSE THE AO MAY GRANT RELIEFS/REFUNDS SUO MOTO OR CAN DO SO ON BEING POIN TED OUT ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR WHICH T HE ASSESSEE HAS NOT FILED REVISED RETURN. THIS ORDER FROM HONBLE MUMBAI ITAT BEING JURISDIC TIONAL ITAT BEING BINDING AND THIS DECISION HAVING BEEN DELIVE RED AFTER TAKING INTO ACCOUNT THE DECISION OF HONBLE SUPREME COURT IN GOETZ INDIA LTD. HAS TO BE GIVEN EFFECT TO IN APPELLATE PROCEE DINGS. IN THE REFERRED ORDER OF HONBLE ITAT THEY HAVE OBSERVED AS FOLLOWS:- THEREFORE THE COMMISSIONERS (APPEALS) HAVING COT ERMINUS POWERS WITH THE POWERS OF THE AO AND THE FACT THAT APPELLA TE PROCEEDINGS ARE THE CONTINUATION OF ORIGINAL PROCEEDINGS SHOUL D HAVE ENTERTAINED THE CLAIM OF THE ASSESSEE AND ALLOWED IF OTHER CON DITIONS OF THE PROVISIONS OF LAW WRITER SATISFIED. THEREFORE THE COMMISSIONER (APPEALS) WAS TO BE DIRECTED TO CONSIDER THE CLAIM OF THE ASSESSEE OF THE REVISED FIGURES ON MERITS AND DECIDE THE SAME A CCORDING TO THE PROVISIONS OF SECTIONS 80 HH AND 80I (PARA 49). 5. THEREFORE RESPECTFULLY FOLLOWING THE ITATS DEC ISION AND KEEPING IN MIND THAT THE CIRCULARS CONSIDERED BY IT AT ARE STILL IN FORCE IT IS HELD THAT AO WAS DUTY BOUND TO COMPUTE THE CORRECT TAXABLE INCOME OF APPELLANT AFTER TAKING INTO ACCOU NT THE CLAIM MADE THROUGH A LETTER OF TREATING REVENUE SHARE PAYMENT AS REVENUE EXPENDITURE ALLOWABLE TO APPELLANT. CONSEQUENTLY A O IS DIRECTED TO ALLOW THE REVENUE SHARE PAYMENT OF RS. 1 85 20 48 4 75/- AS REVENUE EXPENDITURE TO APPELLANT. THE DEDUCTION GRANTED BY AO U/S 35ABB/32(1) ON THIS AMOUNT SHALL BE WITHDRAWN. ITA NO. 3600/M/08 RELIANCE INFOCOM 4 4. THE LEARNED DR HAS RELIED UPON THE ORDER OF AO A ND SUBMITTED THAT IN THE LIGHT OF JUDGMENT OF HONBLE SUPREME COURT I N THE CASE OF GOETZ INDIA LTD. VS. CIT [2006]284 ITR 323(SC). THE ASSES SEE CAN CLAIM A DEDUCTION ONLY BY A REVISED RETURN. SINCE THE CLAIM OF THE ASSESSEE WAS NOT A REVISED RETURN THEREFORE THE CIT(A) WRONGLY ALLOWED THE CLAIM OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ORDER O F CIT(A) IS CONTRARY TO LAW. THE CIT(A) HAS NO POWER TO ADMIT THE ASSESSEE S CLAIM WITHOUT A REVISED RETURN OF INCOME. 5. THE LEARNED AR ON THE OTHER HAND RELIED UPON T HE ORDER OF CIT(A) AND SUBMITTED THAT THE ORDER OF CIT(A) IS IN ACCORD ANCE WITH LAW AS THE CIT(A) HAS FOLLOWED AN ORDER OF ITAT IN CASE OF CHI CAGO PNEUMATIC INDIA LTD. VS. DCIT 15 SOT 252(MUM). HE FURTHER SUBMITT ED THAT THE ORDER OF CIT(A) IS ALSO IN ACCORDANCE WITH THE JUDGMENT OF H ONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT [2006]28 4 ITR 323 (SC). THE APPELLATE AUTHORITY HAS POWER TO ADMIT SUCH CLAIM E VEN WITHOUT REVISED RETURN OF INCOME. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES RECORD PERUSED AND GONE THROUGH THE DECISIONS CITED. IN T HIS APPEAL THE QUESTION THAT FALLS FOR CONSIDERATION RELATES TO SC OPE OF POWERS OF CIT(A) WHETHER THE CIT(A) WAS HAVING POWER TO ADMIT ASSESS EES CLAIM WITHOUT FILING REVISED RETURN OF INCOME. TO PROPERLY APPREC IATE THE ISSUE WE WOULD LIKE TO REPRODUCE THE FINDING GIVEN BY HONBL E SUPREME COURT IN CASE OF GOETZ INDIA LTD. CITED SUPRA READS AS UNDE R:- THE DECISION IN QUESTION IS THAT THE POWER OF THE T RIBUNAL UNDER SECTION 254 OF THE INCOME-TAX ACT 1961 IS TO ENTE RTAIN FOR THE FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHICH THE ISSUE OF LAW CAN BE RAISED BEFORE THE TRIBUNAL. THE DECIS ION DOES NOT IN ANY WAY RELATE TO THE POWER OF THE AO TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A REVISED RETURN . IN THE CIRCUMSTANCES OF THE CASE WE DISMISS THE CIVIL APP EAL. HOWEVER WE MAKE IT CLEAR THAT THE ISSUE IN THIS CASE IS LIMITE D TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POW ER OF THE INCOME-TAX APPELLATE TRIBUNAL UNDER SECTION 254 OF THE INCOME-TAX ACT 1961. THERE SHALL BE NO ORDER AS TO COSTS. 7. FROM THE ABOVE FINDING OF THE APEX COURT WE FIN D THAT THE APEX COURT HAS DECIDED THE ISSUE FOR A LIMITED PURPOSE I N RESPECT OF POWER OF THE ASSESSING AUTHORITY. THE APEX COURT CLARIFIED I N ITS JUDGMENT ITSELF ITA NO. 3600/M/08 RELIANCE INFOCOM 5 THAT THEIR FINDING DOES NOT IMPINGE ON THE POWER OF THE INCOME TAX APPELLATE TRIBUNAL UNDER SECTION 254 OF THE ACT. WE FIND THAT THE CIT(A) HAS ALSO SIMILAR POWER U/S 251(1)(C). THE SAID SECT ION READS AS UNDER:- SECTION 251 (1 ): IN DISPOSING OF AN APPEAL THE COMMISSIONER (A) SHALL HAVE THE FOLLOWING POWERS- (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT HE MAY CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT (AA) IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT I N RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSI ON ABATES UNDER SECTION 245HA HE MAY AFTER TAKING INTO CONS IDERATION ALL THE MATERIAL AND OTHER INFORMATION PRODUCED BY THE ASSESSEE BEFORE OR THE RESULTS OF THE INQUIRY HELD OR EVIDE NCE RECORDED BY THE SETTLEMENT COMMISSION IN THE COURSE OF THE PRO CEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT. B) IN ANY APPEAL AGAINST AN ORDER IMPOSING A PENALT Y HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHE R TO ENHANCE OR TO REDUCE THE PENALTY; C) IN ANY OTHER CASE HE MAY PASS SUCH ORDERS IN TH E APPEAL AS HE THINKS FIT.: 8. THE ISSUE RELATED POWER OF FIRST APPELLATE AUTHO RITY HAS BEEN EXAMINED BY THE HONBLE SUPREME COURT IN THE CASE O F COMMISSIONER OF INCOME-TAX V. NIRBHERAM DELURAM 224 ITR 610(SC). TH E BRIEF FACTS OF THAT CASE WERE THAT DURING REASSESSMENT PROCEEDIN GS THE ITO MADE ADDITION TO THE ASSESSEE'S INCOME TO THE EXTENT OF RS. 2 45 000 ON ACCOUNT OF OSTENSIBLE TRANSACTIONS IN HUNDI LOANS S HOWN BY THE ASSESSEE. ON APPEAL THE AAC WHILE SUSTAINING THE AFORESAID ADDITION ALSO TOOK NOTICE OF 10 OTHER ITEMS OF OSTENSIBLE HUNDI LOANS AMOUNTING TO RS. 2 30 000 AND DIRECTED THAT THE TOTAL INCOME BE ENHA NCED BY THE SUM OF RS. 2 30 000. THE TRIBUNAL HOWEVER DELETED THE SA ID ADDITION HOLDING THAT THE AAO HAD EXCEEDED HIS JURISDICTION. THE HIG H COURT PLACING RELIANCE ON THE DECISION OF THE SUPREME COURT IN AD DL. CIT V. GURJARGRAVURES (P.) LTD. [1978] 111 ITR 1 HELD THAT THE AAC HAD NO JURISDICTION TO CONSIDER THE NEW ENTRIES WHICH WERE NOT CONSIDERED AT ALL BY THE ITO AND TO ADD THE AMOUNT OF RS. 2 30 000 TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO THE HIGH COURT THE ITEM S REPRESENTING THE SAID AMOUNT CONSTITUTED NEW SOURCES OF INCOME WHICH WERE NOT THE ITA NO. 3600/M/08 RELIANCE INFOCOM 6 SUBJECT-MATTER OF ASSESSMENT BEFORE THE ASSESSING O FFICER AND THEREFORE IT WAS NOT OPEN TO THE AAC IN APPEAL TO CONSIDER TH E NEW SOURCES AND TO ASSESS THEM. 9. ON APPEAL TO THE SUPREME COURT THE SUPREME COUR T HAS HELD AS UNDER:- (PAGES 612 TO 614) IN JUTE CORPN. OF INDIA LTD.' S CASE (SUPRA) THIS COURT HAS REFERRED TO THE EARLIER DECISION OF THIS COURT IN CIT V. KANPUR COAL SYNDICATE [1964] 53 ITR 225 WHICH WAS ALSO A DECISION OF A THREE JUDGE BENCH WHEREIN THE SCOPE OF SECTION 31(3)(A) O F THE INDIAN INCOME- TAX ACT 1922 [WHICH WAS ALMOST IDENTICAL TO SECTIO N 251(1)(A) OF THE 1961 ACT] WAS CONSIDERED AND IT WAS HELD: ' 'IF AN APPEAL LIES SECTION 31 OF THE ACT DESCRIB ES THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER IN SUCH AN APPEAL. UNDER SECTION 31(3)(A) IN DISPOSING OF SUCH AN APPEAL THE APPEL LATE ASSISTANT COMMISSIONER MAY IN THE CASE OF AN ORDER OF ASSESS MENT CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT; UNDER CLAU SE (B) THEREOF HE MAY SET ASIDE THE ASSESSMENT AND DIRECT THE INCOME- TAX OFFICER TO MAKE A FRESH ASSESSMENT. THE APPELLATE ASSISTANT COMMISS IONER HAS THEREFORE PLENARY POWERS IN DISPOSING OF AN APPEAL . THE SCOPE OF HIS POWER IS COTERMINOUS WITH THAT OF THE INCOME-TAX OF FICER. HE CAN DO WHAT THE INCOME-TAX OFFICER CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO'.' (P. 693) AFTER REFERRING TO THESE OBSERVATIONS THIS COURT I N JUTE CORPN. OF INDIA LTD.'S CASE (SUPRA) HAS STATED : 'THE ABOVE OBSERVATIONS ARE SQUARELY APPLICABLE IN THE INTERPRETATION OF SECTION 251(1)(A) OF THE ACT. THE DECLARATION OF LA W IS CLEAR THAT THE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IS CO -TERMINOUS WITH THAT OF THE INCOME-TAX OFFICER AND IF THAT IS SO THERE APPEARS TO BE NO REASON AS TO WHY THE APPELLATE AUTHORITY CANNOT MOD IFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND EVEN IF NOT RAISED BE FORE THE INCOME-TAX OFFICER. NO EXCEPTION COULD BE TAKEN TO THIS VIEW A S THE ACT DOES NOT PLACE ANY RESTRICTION OR LIMITATION ON THE EXERCISE OF APPELLATE POWER. EVEN OTHERWISE AN APPELLATE AUTHORITY WHILE HEARIN G THE APPEAL AGAINST THE ORDER OF A SUBORDINATE AUTHORITY HAS A LL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUE STION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATION IF ANY PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTO RY PROVISION THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. THERE APPEARS TO BE NO GOOD REASON AND NONE WAS PLACED BEFORE US TO JUSTIF Y CURTAILMENT OF THE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IN EN TERTAINING AN ADDITIONAL GROUND RAISED BY THE ASSESSEE IN SEEKING MODIFICATION OF THE ORDER OF ASSESSMENT PASSED BY THE INCOME-TAX OFFICE R.' (P. 693) TAKING NOTE OF THE DECISION IN GURJARGRAVURES (P. ) LTD.'S CASE (SUPRA) THE COURT HAS SAID : '... APPARENTLY THIS VIEW TAKEN BY THE TWO JUDGE B ENCH OF THIS COURT APPEARS TO BE IN CONFLICT WITH THE VIEW TAKEN BY TH E THREE JUDGE BENCH ITA NO. 3600/M/08 RELIANCE INFOCOM 7 OF THIS COURT IN KANPUR COAL SYNDICATE CASE [1964] 53 ITR 225 . IT APPEARS FROM THE REPORT OF THE DECISION IN THE GUJA RAT CASE THAT THE THREE JUDGE BENCH DECISION IN KANPUR COAL SYNDICATE CASE [1964] 53 ITR 225 (SC) WAS NOT BROUGHT TO THE NOTICE OF THE BENCH IN GURJARGRAVURES (P.) LTD. [1978] 111 ITR 1 (SC). IN THE CIRCUMSTANCES THE VIEW OF THE LARGER BENCH IN KANPUR COAL SYNDICATE C ASE [1964] 53 ITR 225 (SC) HOLDS THE FIELD....' (P. 694) HAVING REGARD TO THE DECISION IN JUTE CORPN. OF IND IA LTD.'S CASE (SUPRA) IT MUST BE HELD THAT THE HIGH COURT WAS IN ERROR IN HOLDING THAT THE APPELLATE POWER CONFERRED ON THE AAC UNDER SECT ION 251 WAS CONFINED TO THE MATTER WHICH HAD BEEN CONSIDERED BY THE ITO AND THE AAC EXCEEDED HIS JURISDICTION IN MAKING AN ADDITION OF RS. 2 30 000 ON THE BASIS OF THE OTHER 10 ITEMS OF HUNDIS WHICH HAD NOT BEEN EXPLAINED BY THE ASSESSEE. 10. IN THE LIGHT OF THE ABOVE DISCUSSION WE FIND T HAT THE AO HAS NO POWER TO ADMIT FRESH CLAIM OTHERWISE THAN REVISED R ETURN BUT APPELLATE AUTHORITIES INCLUDING CIT(A) & ITAT HAVE POWER TO A DMIT SUCH CLAIM. WITHOUT PREJUDICE TO THIS FINDING WE ADMIT THE ASS ESSEES CLAIM WHICH IS IN ACCORDANCE WITH THE JUDGMENT OF THE APEX COURT I N THE CASE OF GOETZ INDIA LTD. (SUPRA) AND ALLOW THE SAME ON THE BASIS OF CATEGORICAL FINDING OF CIT(A) THAT THERE IS NO DISPUTE THAT LICENCE FEE IS ALLOWABLE AS REVENUE EXPENDITURE. THIS FACT HAS ALSO NOT CONTROVERTED BY THE REVENUE BEFORE US. UNDER THE CIRCUMSTANCES WE FIND THAT THE CIT(A) HAS RIGHTLY ALLOWED THE REVENUE SHARE PAYMENT OF RS. 1 85 20 48 475/- AS REVENUE EXPENDITURE EVEN THOUGH THIS AMOUNT WAS NOT CLAIMED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. ACCORDINGLY WE UPHOL D THE ORDER OF CIT(A) ON THIS COUNT. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. PRONOUNCED ON THIS 12 TH DAY OF MARCH 2010 SD/- SD/- (P. MADHAVI DEVI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: MARCH 2010 ITA NO. 3600/M/08 RELIANCE INFOCOM 8 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE G BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 25.02.10 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 04.03.10 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER