Tribunal may hear a new legal ground based on existing facts when no fresh evidence is sought.

The Tribunal's appellate powers were broad enough to permit the assessee to advance a new legal ground for depreciation under section 12(3) of the Income-tax Act, 1922, where the claim rested on the same facts already on record. The assessee had consistently relied on the acquisition and lease-back of machinery, and no additional evidence was sought. The fact that the precise section 12(3) contention had not been expressly raised before the Appellate Assistant Commissioner did not, by itself, justify refusal to hear it. The Tribunal was therefore not justified in declining to entertain the contention, and the issue was answered in favour of the assessee.

---

---

Issues: Whether the Tribunal erred in law in declining to permit the assessee to argue its claim to depreciation allowance under section 12(3) of the Income-tax Act, 1922.

Analysis: The assessee's case throughout was that it had acquired the machinery and had leased it back to the user company. Before the lower authorities it had sought depreciation under sections 10(2)(vi) and 10(2)(via) on those facts. Before the Tribunal it invoked section 12(3) on the same factual foundation, without seeking to adduce additional evidence. The statutory and procedural scheme gave the Tribunal wide appellate powers and did not prohibit a new legal ground based on the existing record, so long as no new evidence was sought and the opposite party had an opportunity of hearing. The fact that the contention had not been expressly urged before the Appellate Assistant Commissioner did not, by itself, justify refusal to consider it.

Conclusion: The Tribunal was not justified in refusing to entertain the assessee's contention under section 12(3); the question was answered in the affirmative, in favour of the assessee.

Ratio Decidendi: A party may be permitted to urge before the Tribunal a new legal ground founded on the same facts already on record, even if the ground was not expressly raised before the lower appellate authority, provided no additional evidence is sought and the Tribunal's procedural requirements are satisfied.

---