IN INCOME TAX APPELLATE TRIBUNAL, BENCH D KOLKATA [Before Hon ble Shri S.S.Viswanethra Ravi, JM & Dr.Arjun Lal Saini, AM] ITA No.1021/Kol/2016 Assessment Year : 2010-11 M/s. Dream Development Company -versus- I.T.O., Ward-27(1), Purba Medinipur Haldia [PAN: AAFFT 2851 B] (Appellant) (Respondent) For Appellant : Shri Subash Agarwal, Advocate For Respondent : Md.Ghayas Uddin, JCIT Date of Hearing : 29.09.2016 Date of Pronouncement : 30.09.2016 ORDER Per Dr.Arjun Lal Saini, AM captioned appeal filed by assessee pertaining to A.Y.2010-11, is directed against order passed by Commissioner of Income Tax (Appeals) -7, Kolkata, in Appeal No.414/CIT(A)-7/Wd-27(1)/14-15/Kol, dated 22.02.2016, which in turn arises out of order passed by Ld. Assessing Officer u/s 143(3) of Income Tax Act, 1961 (in short, Act ), dated 07.02.2013. 2. facts of case are stated in brief. assessee filed its return of income electronically on 25.02.2011 declaring total income of Rs.10,71,630/-. return of income of assessee was processed u/s 143(1) of Act. Subsequently assessee s case was selected for scrutiny u/s 143(3) of Act and AO has completed assessment by making various additions. Aggrieved from order of ld. AO, assessee filed appeal before ld. CIT(A), who has also confirmed addition made by AO by observing followings :- 3.0. I have considered submissions made by appellant and I do not find force in submissions made by appellant. appellant has filed return of income disclosing total income of Rs.10,71,630/- and Assessing Officer assessed income at Rs.10,71,630/-. No other additions were made by Assessing Officer in assessment order. case was selected for scrutiny and notice under section 143(2) was issued by Assessing Officer to verify whether income has been understated or not. Assessing Officer has no power under section 143(3) to reduce income 2 ITA No.1021/Kol/2016 M/s. Dream Development Company A..Y.2010-11 returned. appellant claimed deduction of PF amounting to Rs.5,66,271/- and ESI amounting to Rs.1,45,257/- during assessment proceedings by way of statement of computation of income. Now it is settled law that assessee cannot claim any reduction of income by statement of computation of income. This view is supported by Hon ble Supreme Court judgment in case of Goetz India ltd. Vs CIT reported in [2006] 157 Taxman 1 (SC). alternative remedy for assessee to claim deductions or reduction of income is by way of filing revised return of income or making revision petition before Ld. Pr. Commissioner of Income tax. appellant did not appear before me and made any argument to controvert above legal position. Though Hon ble Calcutta High Court in decision relied upon by authorized representative of appellant held that deduction of PF and ESI is allowable before filing return of income, since there was no claim in return of income of appellant, decision of Hon ble High Court of Calcutta is not applicable in case of appellant. Therefore, I do not find any infirmity in order of Assessing Officer and accordingly, assessment order is upheld. appeal is therefore dismissed. 3. Not being satisfied with order of ld. CIT(A), assessee is in further appeal before us and has taken following grounds of appeal :- 1. For that Ld. CIT (Appeals) as well as Ld. Assessing Officer should not have added amount of Employees Contribution to Provident Fund and ESI deposited after due date specified in relevant statues. 2. For that claim made during course of assessment with regards to Employees Contribution to P.F. and ESI was just and proper and was legal claim supported by jurisdictional High Court and rejection of same by Ld. Assessing Officer as well as CIT (Appeals) is highly arbitrary, unjustified and unwarranted to facts of case. 3. For that drawings of reference of Goetz India Ltd's case for disallowing claim made is not proper and appellant be allowed relief allowable as per law. 4. ld. AR for assessee has submitted that assessee made claim with respect to employees contribution to PF and ESI. However, assessee did not make this claim in original return and he did not file revised return also. Therefore, AO has disallowed claim by following decision of Goetz India Ltd. Vs. CIT [2006] 157 Taxmann 1 (SC). As per this judgment, no doubt, AO can entertain only those claims which have been claimed by assessee by filing return of income/revised return. If any deduction or any exemption has not been claimed by assessee in return of income filed by him, then normally AO does not allow claim because he is not authorized to entertain fresh deduction or exemption which was not claimed by assessee while filing return of income/revised return. Therefore AO may be right to that extent that he is not supposed to entertain fresh claim which is not claimed by assessee in return 3 ITA No.1021/Kol/2016 M/s. Dream Development Company A..Y.2010-11 of income or revised return of income filed by assessee. ld. AR for assessee further argued that Tribunal has enough power to admit claim and admit new grounds of appeal. ld. AR submitted that it is object of Inocme tax Act to assess true income of assessee and to collect true tax from assessee. In assessee`s case under consideration assessee has paid PF contribution and ESI contribution before filing of return of income, therefore he is entitled to claim deduction. ld. AR for assessee drew our attention towards judgment of Hon ble ITAT, Kolkata wherein Tribunal has observed followings :- 5. It was submission that Assessing Officer had held that assessee had not made claim of deduction u/s. 80GGB of Act in original return filed by assessee. It was submissions that learned Commissioner of Income-tax (Appeals) had upheld order of Assessing Officer by following decision of Hon'ble Supreme Court in case of Goetze (India) Ltd Vs.CIT reported in 284 ITR 323(SC). It was submission that factum of donation having been given was not disputed. It was submitted that only because assessee had not made claim in original return, benefit of deduction had not been granted to assessee. In view of decision of Hon'ble Supreme Court in case of Goetze (India) Ltd (refer to supra), Tribunal was empowered to grant deduction to assessee. 7. We have considered rival submissions. It is noticed that Hon'ble Supreme Court in case of Goetze (India) Ltd (refer to supra) has held that appellate authority being tribunal did have powers to direct Assessing Officer to accept claim of assessee, though same has not been made in original return nor has been claimed in revised return. In circumstances, respectfully following ratio laid down by Hon'ble Supreme Court in case of Goetze (India) Ltd (refer to supra), Assessing Officer is directed to grant assessee's claim of deduction u/s. 80GGB of donations made by assessee to political parties in respect of Rs.45 lakhs given to Congress party and Rs. 80 lakhs given to BJP. ld. AR for assessee has also explained that disallowance u/s 36(1)(va) could not be made even if payments of employees contribution to PF and ESI was after due date under relevant statutes, but before due date for filing return under Income tax Act, 1961. 5. On other hand, ld. Departmental Representative for revenue has explained that claim of assessee is not covered u/s 43B of Act. ld. DR has also submitted before us CBDT Circular No.22/2015 dated 17.12.2015. ld. DR for revenue has also primarily relied on stand taken by ld. AO. 4 ITA No.1021/Kol/2016 M/s. Dream Development Company A..Y.2010-11 6. Having heard rival submissions, perused material available on record, we are of view that there is merit in submissions of ld. AR for assessee , as propositions canvassed by ld. AR for assessee are supported by judgment of Hon ble ITAT, Kolkata in ITA No.1410/Kol/.2011 and CIT vs AIMIL Ltd. (2010) 321 ITR 508 (Del). Therefore we are of view that Hon ble Supreme Court in case of Goetze India Ltd. (referred to supra) has held that appellate authority being Tribunal have power to direct AO to accept claim of assessee though same has not been made in original return nor has been done in revised return. In this circumstances, respectfully following, ratio laid down by Hon ble Supreme Court in case of Goetz India Ltd., AO is directed to grant assessee s claim of deduction on account of contribution to PF and ESI. 8. In result, appeal filed by assessee is allowed Order pronounced in court on 30.09.2016. Sd/- Sd/- [S.S.Viswanethra Ravi] [Dr.Arjun Lal Saini] Judicial Member Accountant Member Date: 30.09.2016. R.G.(.P.S.) Copy of order forwarded to: 1. M/s. Dream Development Company, Plot No.A/72, Rani Chowk, Hatiberia, P.O.Haldia, Dist. Purba Medinipur-721657. 2 I.T.O., Ward-27(1), Kolkata. 3. C.I.T.(A)- 7, Kolkata 4. C.I.T., 9, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata. True Copy, By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches 5 ITA No.1021/Kol/2016 M/s. Dream Development Company A..Y.2010-11 M/s. Dream Development Company v. I.T.O., Ward-27(1), Haldia