The Income Tax Appellate Tribunal (ITAT), Bangalore court held that the taxpayer in concern to the entitled for availing a deduction of reward paid prior to the appellate authorities.
The taxpayer is the owner of FNF India Private Ltd asked the issue with respect to non-grant of the deduction for gratuity amounting to Rs.17,87,315. AO has refused to cut down the furnished gratuity. The taxpayer has provided to the Commissioner of Income Tax (CIT) that it has generated the procurement for the gratuity of Rs .1,4769,903 and that Rs.44,22,139 was truly furnished to the employees.
The taxpayer has on returning of the income availed deduction of Rs 26,34,825 only along with the net plan of Rs 1,21,35,078 was not allowed in the calculation. In the left assessment proceedings, this was brought upon AOs notice, but AO is not been provided with the deduction with respect to the amount furnished of Rs 17,87,315 as well as prayed that similar might be permitted.
CIT appeals see that without any revocation the avail was not furnished by the taxpayer in its return of the income or through the method of the revised income return. n Goetze (India) Ltd. v. CIT the Court ruled that the AO has no authority to welcome the claim of new deduction if the similar is not through the method of the revised return.
As per the CIT(A) after seeing the limitation of the powers of AO the powers of the first appellate authority indeed get restricted as in the absence of the revised return. Thus CIT(A) eliminated the avail of the taxpayers.
The court included George George K and Chandra Poojari ruled that the taxpayer in principle is liable to avail the deduction of the reward furnished prior to the amount of the deduction with respect to the reward and is been chosen accordingly.
