2007 (1) TMI 150 - HC - Income Tax

High Court allows appeal to raise additional ground on depreciation & taxable income, directs Tribunal to consider under rule 11.

Avery Cycle Industries Limited Versus Commissioner Of Income-Tax.

The High Court, Punjab and Haryana, allowed an appeal challenging the Income-tax Appellate Tribunal's order denying the appellant to raise an additional ... - Issues involved: Appeal filed u/s 260A of the Income-tax Act, 1961 challenging order of the Income-tax Appellate Tribunal regarding computation of correct depreciation and consequential taxable income.Summary:The High Court, Punjab and Haryana, heard an appeal challenging the Income-tax Appellate Tribunal's order denying the appellant to raise an additional ground of appeal related to depreciation calculation and taxable income. The court noted that an additional ground can be raised u/s 254 of the Income-tax Act before the Tribunal if it involves a question of law arising from facts on record in the assessment proceedings. Citing the Supreme Court's judgment in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383, the court emphasized that the Tribunal has the discretion to allow a new ground to be raised, especially when it is necessary to correctly assess the tax liability of an assessee. In this case, the additional ground regarding depreciation allowance was found to have all relevant facts on record, and thus, the Tribunal was directed to consider this ground under rule 11 of the Appellate Tribunal Rules, 1963. The impugned order of the Tribunal was set aside, and the Tribunal was instructed to address the additional ground in accordance with the law. The appeal was disposed of accordingly.