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.

The High Court, Punjab and Haryana, allowed an appeal challenging the Income-tax Appellate Tribunal's order denying the appellant to raise an additional ... Allowing additional ground of appeal before Tribunal - question of law arising from facts on record - discretion of Tribunal to admit new ground - computation of depreciation and brought forward W.D.V.Allowing additional ground of appeal before Tribunal - question of law arising from facts on record - computation of depreciation and brought forward W.D.V. - Permissibility of raising an additional ground before the Tribunal concerning computation of depreciation and carried-forward written down value (W.D.V.). - HELD THAT: - The Court held that where the question raised is one of law arising from facts already on the record of the assessment proceedings, the Tribunal has the jurisdiction and may in its discretion allow a new ground to be raised in appeal. Reliance was placed on the Supreme Court's principle that the Tribunal may permit a new ground when it is necessary to consider that question to correctly assess the tax liability. Applying that principle, the High Court found that all facts relevant to the additional ground about depreciation and the brought-forward W.D.V. were on record, and therefore the Tribunal should have entertained the additional ground under the Appellate Tribunal Rules. Consequently, the Tribunal's order denying permission to raise the additional ground was set aside.Tribunal's order refusing the additional ground is set aside and the Tribunal is directed to consider and decide the additional ground regarding depreciation and carried-forward W.D.V. in accordance with law.Final Conclusion: The Tribunal's order dated October 29, 2004 is set aside and the matter is remitted to the Tribunal to adjudicate the additional ground concerning computation of depreciation and brought-forward W.D.V. in accordance with law; the appeal is disposed of on these terms. 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.