INCOME TAX ACT, 1961

Rule 46A

Appeal [CIT(A)] - Making of fresh claim before CIT(A) without filing fresh evidences - AO alleged contravention of rule 46A -

Assessee preferred appeal before CIT(A) and claimed that it has incurred an expense of Rs. 3,47,32,310 under the head 'Product Development Expenses' but omitted to claim deduction under section 37(1). Accordingly, assessee first time made a fresh claim for deduction of product development expenditure. CIT(A) directed AO to allow the Product Development Expenses, after verification. As per AO, CIT(A) erred in directing to allow deduction in violation of rule 46A. Held: Assessee, indeed made a fresh claim before CIT(A) but did not file any fresh documents. Moreover, CIT(A) after admitting fresh claim directed AO to allow deduction of the same after verification and quantification of expenses. Therefore, AO was still empowered to reject claim of assessee if such expenses represented the capital expenditure within provisions of law. As such, there were no fresh evidences as alleged by revenue, which were entertained by CIT(A). Accordingly, there was no violation of rule 46A.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 & 2014-15

INCOME TAX ACT, 1961

Section 37(1)

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