Additional grounds in second appeal require an existing factual foundation; a new capital-versus-revenue plea was rightly rejected.

Additional grounds in second appeal cannot be entertained where they rest on a new factual case not raised before the lower authorities and the record lacks the factual foundation needed for determination. The assessee had itself treated the amount as a revenue receipt in its return, and the Tribunal was not required to permit a fresh capital-versus-revenue plea that would need further investigation of facts merely because another assessee's case was cited. The Tribunal was therefore correct in refusing to allow the additional grounds, and the question was answered against the assessee.

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Issues: Whether the Appellate Tribunal erred in refusing to permit the assessee to raise additional grounds of appeal on the question whether the sum of Rs. 7,93,837 was a capital receipt instead of a revenue receipt.

Analysis: The additional grounds were not founded on any plea or material placed before the Income-tax Officer or the Appellate Assistant Commissioner. The assessee itself had shown the amount as a revenue receipt in its return, and the factual basis necessary to support the new contention was absent from the record. The Tribunal could not be required to entertain a new plea that would need fresh investigation of facts at the second appellate stage merely because reference was made to another assessee's case.

Conclusion: The Tribunal acted correctly in declining to allow the additional grounds, and the question was answered against the assessee.

Ratio Decidendi: Additional grounds of appeal that depend on facts or pleas not raised before the lower authorities cannot be entertained in second appeal unless the existing record contains the factual foundation necessary for their determination.

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