The Commissioner Of Income Tax-18 v. Mr. Selwin Coutinho

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 5144 OF 2010 The Commissioner of Income Tax-18 ..Appellantversus Mr. Selwin Coutinho..Respondent -------- Ms. P.S. Cardozo for the Appellant. Ms. Vasanti B. Patel for the Respondent. ............. CORAM : S.J.VAZIFDAR &M.S.SANKLECHA, JJ. DATE: 30[th] July, 2012. (JUDGMENT PER M.S.SANKLECHA,J) 1This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act') challenges the order dated 01.12.2008 of the Income Tax Appellate Tribunal ('the Tribunal') relating to the Assessment year 2001-2002. 2 Being aggrieved, the appellant has formulated the following questions of law for the consideration of this Court : A)On the facts and in the circumstances of the case and in law, was the Tribunal right in upholding the order of the CIT(A) and admitting the revised computation of total income in violation of the provisions of Section 139(5) of the Income Tax Act, 1961 as enunciated by the Apex Court in the case of Goetz reported in 284 ITR 323. B)On the facts and in the circumstances of the case and in law, was the Tribunal right in upholding the order of CIT (A) and give relief of Rs.15,84,100/- from brokerage and other expenses totally ignoring the provisions of Section 36 and 37 of the Income Tax Act, 1961? 3The facts relevant for the present appeal are as under: a)For the assessment year 2001-2002, the respondent had filed a return of income showing a total income of Rs.2.65 lacs after claiming expenses of Rs.14.23 lacs and also expenditure on account of brokerage paid of Rs.7.52 lacs(being debited to its income and expenditure account). During the assessment proceedings under Section 143(3) of the Act before the Assessing Officer, when called upon to produce document/evidence in support of the expenses claimed, the respondent- assessee pointed out that due to an accident his office roof collapsed on 28.07.2001 resulting in the necessary documents, books of accounts and voucher files getting damaged and destroyed in water. In the circumstances, by an order dated 31.12.2003, the Assessing Order disallowed the general expenses of Rs.14.23 lacs and the brokerage expenses of Rs.7.52 lacs and added the same to the Respondent's income resulting in income being determined at Rs.24.41 lacs. b)In appeal before the Commissioner of Income Tax (Appeals) the respondent pointed out that the evidence in support of the expenditure incurred by him could not be produced before the Assessing Officer. This was for the reason that the roof of his office collapsed resulting in destruction of the evidence supporting the expenditure claimed by him. However, the respondent had been able to compile/reconstruct the evidence of expenses in support of his claim for expenses incurred and brokerage paid. The Respondent's Chartered Accountant also filed an affidavit before the Commissioner of Income Tax (Appeals) pointing out that the evidence of the expenditure could not be produced before the Assessing Officer, as records have been destroyed due to collapse of the b)In appeal before the Commissioner of Income Tax (Appeals) the respondent pointed out that the evidence in support of the expenditure incurred by him could not be produced before the Assessing Officer. This was for the reason that the roof of his office collapsed resulting in destruction of the evidence supporting the expenditure claimed by him. However, the respondent had been able to compile/reconstruct the evidence of expenses in support of his claim for expenses incurred and brokerage paid. The Respondent's Chartered Accountant also filed an affidavit before the Commissioner of Income Tax (Appeals) pointing out that the evidence of the expenditure could not be produced before the Assessing Officer, as records have been destroyed due to collapse of the roof of the respondent's office. In the circumstances, the respondent filed the necessary evidence as reconstructed to the extent possible in support of the expenditure incurred as shown in its Income and Expenditure account. The Commissioner of Income Tax (Appeals) called for a remand report from the Assessing Officer. The Assessing Officer in his remand report contested the revised computation of the income furnished by the respondent, as being barred under Section 139(5) of the Act. So far as, the admissibility of the expenses are concerned, the remand report pointed out that the same have been verified on the basis of test check basis and found to be in order. The Commissioner of Income Tax (Appeals) allowed the expenditure claimed by the respondent. In the circumstances, the respondent-assessee's total c)In appeal before the Tribunal, the order of the Commissioner of Income Tax (Appeals) was upheld. The Tribunal held that the respondent had originally declared his income of Rs.2.65 lacs and the same had been enhanced to Rs.8.30 lacs in the revised computation. The deduction claimed by the assessee in the revised computation were duly supported by necessary evidence. The Tribunal in its order dated 01.12.2008 records the finding of the Commissioner of Income Tax (Appeals) that the revised computation of income was filed so as to exclude certain expenses which were not admissible but had been claimed in the original return of income. Consequently, the deductions allowed were proper and in order. 4So far as, question no. (A) formulated by the Revenue is concerned, we are of the view that the same does not arise in the facts of the present case. In this case, the Respondent-assessee had filed its return of Income and claimed certain expenditure, as deductions to arrive at its taxable income. However, due to collapse of the roof of the respondent/assessee office the evidence in support was destroyed leading to the Assessing Officer disallowing the expenditure of Rs.14.23 lacs and Rs.7.52 lacs being general expenses and brokerage respectively. However, before the Appellate authority the respondent/assessee was able to reconstruct its books and submit evidence in support of the expenditure claimed by them. The evidence was found in the order by the Assessing Officer in his remand report. Consequently, this was not a case, where the claim was being made for the first time before the Appellate authority. This at the highest was the case of production of additional evidence before the Appellate Authority, which is permitted in terms of Section 250 of the Act and Rule 46A of the Income Tax Rules 1961. The revised computation was filed by the respondent-assessee for the purpose of excluding certain expenses which are not admissible but claimed in the original computation of Income. In the circumstances, question (A) as formulated by the Appellant-revenue does not arise and is dismissed. the original computation of Income. In the circumstances, question (A) as formulated by the Appellant-revenue does not arise and is dismissed. 5So far as, question (B) is concerned, we find that no submissions with regard thereto have been made either before the Tribunal or before the Commissioner of Income Tax (Appeals). In the circumstances, in view of the decision of this court in the matter of C.I.T. v. Tata Chemicals , reported in 256 ITR 395, no question of law arises for the consideration of this court. In view of the above question (B) as formulated is also dismissed. 6The appeal is dismissed. No order as to costs. (M.S. SANKLECHA, J.) (S.J.VAZIFDAR, J.)