The weight of the evidence and the interpretation of Section 35 of the Income Tax Act influenced the court's decision in upholding the deduction claimed by the respondent.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (Oral)

1. This appeal concerns Assessment Year (AY) 2010-11.

2. Via this appeal, the appellant/revenue seeks to assail the order dated 05.09.2016 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].

3. Mr Sunil Agarwal, learned senior standing counsel, who appears on behalf of the appellant/revenue, says that the only issue which arises for consideration is: whether the respondent/assessee had claimed, in point of fact, deduction for capital expenditure incurred on the scientific equipment, during the relevant period?

3.1. This aspect is set out, in the form of proposed questions, in paragraphs 2.1 to 2.3 of the appeal. For the sake of convenience, the same are extracted hereafter:

"2.1, Whether Ld. ITAT erred in law in failing to appreciate that once the Assessee had omitted to claim deduction of Rs.3,46,32,282/- under Section 35 of the Act, in the return of income, the deduction could only be claimed by filing revised return before the Ld. AO?

2.2, Whether the Ld. ITAT erred in law, qua disallowance of Rs. 3,46,32,282/- under Section 35 of the Act, by holding that the Assessee even after omitting to claim deduction in the return of income, can claim such deduction before the Ld. AO even without filing revised return?

2.3, Whether the Ld. ITAT erred in law in holding that the claim of the Assessee under Section 35 of the Act was allowable in law, as no argument was raised by the Revenue qua non fulfillment of the conditions contained under sub-section (2) thereof [sic] when as a matter of fact no deduction was claimed by the Assessee under Section 35 of the Act in the return of income?"

4. The Assessing Officer (AO), via assessment order dated 25.02.2013, has disallowed the claim made by the petitioner under Section 35 of the Income Tax Act, 1961 [in short, "Act"], as according to him, this was not part of the Return of Income [in short, "ROI"] filed by the petitioner.

5. The deduction claimed by the petitioner on this account, under Section 35 of the Act, was Rs. 3,46,32,280/-.

6. The record shows that the Commissioner of Income Tax (Appeals), [in short, "CIT(A)"] via order dated 14.08.2013, reversed the view of the AO and allowed the deduction under Section 35 of the Act.

7. This view has been sustained by the Tribunal.

8. Mr Agarwal has drawn our attention to the order dated 09.10.2018 issued by the Coordinate Bench of this Court, wherein the following had been recorded:

"Learned counsel for Revenue submits that nnexure-II is the original Income-Tax Return filed by Minda Stoneridge Instruments Ltd. ('respondent-assessee' for short). A perusal/reading of Annexure-II shows that the total income declared was Rs.7,97,34,064/-. This was the exact amount mentioned in order dated 07.07.2011 under Section 143 (1) of the Income Tax Act, 1961 (for short `Act'). As per this order under Section 143(1) of the Act, the respondent-assessee was a tax defaulter as it had not paid the entire self assessment tax and interest. Counsel for respondent-assessee has filed before us a copy of the Income-Tax Return for the Assessment Year 2010-11, copy of which has been furnished to the counsel for Revenue. As per this return the total income declared was Rs. 4,18,70,038/- on which entire tax was paid. In this return deduction of Rs. 3,46,32,280/- was claimed under Section 35 of the Act. The dispute and issue whether Annexure-II is the true and correct Return of Income is factual. Normally, the Income-Tax Returns do not get uploaded to the official website unless the entire amount of tax and interest has been paid. Prima facie, it appears that Annexure-II relied upon by the Revenue is a computation made by the Central Processing Centre at Bengaluru. We are not aware whether Annexure-II filed with this appeal was filed by the Revenue before the Income-Tax Appellate Tribunal. Principal Commissioner of Income Tax will personally examine the matter, if requ