1985 (3) TMI 54 - HC - Income Tax

Court upholds Tribunal's decision on additional claim grounds, ruling in favor of assessee

The High Court upheld the Tribunal's decision to admit additional grounds for claims under s. 35B, ruling in favor of the assessee. The court found the ... Additional Grounds, Assessee's Appeal, Export Market Development Allowance, Tribunal Issues: Assessment of income tax, claim for export markets development allowance under s. 35B, admissibility of additional grounds for claims under section 35B raised before the Tribunal.Analysis:The case involved the assessment of income tax for the assessee, a registered firm, for the assessment year 1971-72. The assessee claimed weighted deduction for export markets development allowance under s. 35B of the Income Tax Act, 1961. Initially, the claim was rejected by the Income Tax Officer (ITO) due to lack of evidence provided by the assessee. Subsequently, the assessee appealed to the Appellate Assistant Commissioner (AAC) and produced evidence of incurring traveling expenses in connection with exporting jute and tea to foreign countries. The AAC accepted the evidence and directed the ITO to allow the deduction under s. 35B as claimed.The assessee further appealed to the Income-tax Appellate Tribunal, seeking to raise additional grounds for claiming further weighted deduction under s. 35B for other expenditures related to the export business. The Tribunal allowed the petition of the assessee to introduce additional items of expenditure, even though specific claims for those amounts were not made before the ITO or the AAC. The Tribunal remanded the matter to the ITO for examination and necessary orders in accordance with the law.The main issue in the judgment was whether the Tribunal was justified in admitting the additional grounds raised before it for claims under section 35B, which were not presented before the ITO or the AAC. The High Court reframed the question to determine if the Tribunal's decision to allow the introduction of additional items of claims under s. 35B was appropriate. The court noted that the assessee had initially claimed relief under s. 35B, and the additional items of expenditure were introduced to enhance the existing claim, not to make an entirely new claim.The court considered relevant legal precedents, including decisions of the Supreme Court and various High Courts, to analyze the admissibility of additional grounds for claims under s. 35B. Referring to a judgment delivered by the Bench in a similar case, the court concluded that the Tribunal's decision to admit the additional grounds for claims under s. 35B was justified in favor of the assessee. The court also refused the Revenue's oral application for a certificate for leave to appeal to the Supreme Court, as the matter was already concluded by a decision of the Supreme Court.In conclusion, the High Court upheld the Tribunal's decision to admit the additional grounds for claims under s. 35B and remand the matter to the ITO for examination, ruling in favor of the assessee.