Fresh deduction claims cannot be entertained at appellate stage without any prior claim or supporting material on record.

An appellate tax authority cannot entertain a fresh deduction claim not raised before the Income-tax Officer where the claim was unsupported by any material on record. The commentary distinguishes Kedarnath Jute Mfg. Co. Ltd. from Addl. CIT v. Gurjargravures P. Ltd., treating the latter as governing cases where no claim was made at the assessment stage and no factual basis existed in the record. On that reasoning, the Appellate Assistant Commissioner lacked jurisdiction to admit the additional ground, and a reference under section 256(2) was not warranted.

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Issues: Whether the Appellate Assistant Commissioner could entertain an additional ground of appeal not raised before the Income-tax Officer, and whether a reference under section 256(2) of the Income-tax Act, 1961 could be directed on that question.

Analysis: The assessment year was 1974-75. The assessee had not claimed the deduction before the Income-tax Officer, but the Appellate Assistant Commissioner allowed it on the basis of the material and the Supreme Court decision in Kedarnath Jute Mfg. Co. Ltd. v. CIT. The later Supreme Court decision in Addl. CIT v. Gurjargravures P. Ltd. was treated as governing the precise situation where no claim had been made before the assessing officer and no supporting material was on record. In that view, the appellate authority was not competent to entertain the fresh claim.

Conclusion: The Tribunal was right in holding that the Appellate Assistant Commissioner had no jurisdiction to entertain the additional ground, and no reference was directed.

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