Illaben Jayantkumar Doshi,appellant-assessee, filed her return for AY 2013-14 declaring income of ₹26,793. The case was selected for scrutiny, and a notice under section 143(2) was issued. The assessee was engaged in stone crushing, share and commodities trading, labour income, share of profit from two firms, and income from interest and dividends.

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During assessment, the AO sought details under section 14A and, after rejecting the explanation, disallowed ₹2,852 as proportionate interest. The Commissioner of Income Tax (Appeals)[CIT(A)] upheld the disallowance, noting that the claim was not made in the original return or through a revised return, and referred to the Supreme Court ruling in Goetze (India) Ltd. to dismiss the appeal.

The assessee then approached the tribunal.

The assessee counsel argued that a deduction could be claimed before appellate authorities even if it was not made in the original or revised return. It was submitted that ₹13,32,054 was wrongly added twice in the income computation, leading to an incorrect taxable income, and requested the AO to correct the mistake.

The Senior Departmental Counsel maintained the AO’s view.

A single member bench comprising Dr.A.L.Saini (Accountant Member) heard both parties, reviewed the submissions, documents, and case laws cited, and examined the facts, including the findings of the CIT(A).

It was noted that the assessee’s counsel argued that ₹13,32,054 had been wrongly added twice in the income computation, resulting in an incorrect taxable income, and had requested the AO to correct the error by taxing it only once, submitting a revised computation and a letter dated 16.07.2015.

The assessee sought relief on the ground that a fresh claim could be made during appellate proceedings, citing various judicial precedents, including Pruthvi Brokers & Shareholders Pvt. Ltd., Jute Corporation of India, and Goetze (India) Ltd., and stated that the omission was inadvertent.

The appellate tribunal observed that the CIT(A) had held that the Goetze (India) Ltd. decision was specific to assessment proceedings and did not apply to appellate proceedings, and thus dismissed the appeal. It held that the purpose of assessment under section 143(3) was to determine the correct income and taxes, and there was no bar on a taxpayer making a claim by letter in such cases.

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While the AO could not allow a deduction without a revised return, the appellate authorities could consider it. Accordingly, the tribunal directed the AO to correct the duplication of ₹13,32,054 and determine the taxable income afresh in accordance with law.

Accordingly the appeal of the assessee was allowed for statistical purposes.

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