Additional income tax ground can be admitted on appeal when needed for proper adjudication and justice.

The Tribunal's power to admit an additional ground was recognised where the ground was relevant to proper adjudication and necessary to do justice. The appellate authorities could entertain a claim for weighted deduction under section 35(1)(ii)/35(2A) even though it had not been raised before the Assessing Officer, and section 254 was treated as conferring wide authority to pass such orders as the Tribunal considered fit after hearing both sides. The direction to admit and decide the additional ground on merits was upheld in favour of the assessee and against the Revenue.

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Issues: Whether the Tribunal was justified in directing the Commissioner of Income-tax (Appeals) to admit and decide on merits the assessee's additional ground relating to weighted deduction under section 35(1)(ii)/35(2A) of the Income-tax Act, 1961, though the claim had not been raised before the Assessing Officer.

Analysis: The additional ground was treated as relevant to the proper adjudication of the dispute. The appellate authorities were held to have ample power to entertain such a ground where its consideration was necessary to do justice, and section 254 of the Income-tax Act, 1961 was relied upon as conferring wide power on the Tribunal to pass orders as it thinks fit after hearing both parties.

Conclusion: The direction to admit the additional ground was upheld and the question was answered in the affirmative, in favour of the assessee and against the Revenue.

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