TaxTMI 
TaxTMI 
2005 (5) TMI 257
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....he AD had made assessment in this case under s. 143(3) vide order dt. 22nd Dec., 1994. A sum of Rs. 2,53,23,741 on account of additional sugarcane purchase price was disallowed by the AD for the reasons recorded in para 2 of the assessment order. The basis on which the disallowance was made by the AD is summarized in last para of pp. 4 and 5 of the assessment order which is reproduced hereunder: "From the foregoing discussions, it is very clear that the main purpose of the assessee is to divert the taxable profits by making the abovesaid theoretical book entries so that its tax liability of the current year can be reduced. Even, if the assessee had made proper entries in the share capital account (which is not so in the assessee's case) ....
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....y could enforce any extra liability on the assessee as far as the price of cane is concerned. The bye-laws also require that final payment has to be made after the crushing season and this crushing season having been ended in April, 1993 and not before 31st March, 1993 it could safely be said that the liability also accrued in April, 1993 and not before 31st March, 1993. The appellant's claim that this should be allowed in the following year may be considered by the Dy CIT. The appellant, in fact, appears to have acted in a unilateral manner to enhance the share capital and not making any payment of this amount to the cane growers but this is only a mode of payment debited by it though it should have been ratified in the general body meetin....
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....epartmental Representative that the Tribunal has vast powers to decide the appeal "as it thinks fit" and so long as the Tribunal decides the subject-matter of the appeal in accordance with law, there are no limitations on the powers of the Tribunal for deciding the issue. 6. We have given our careful consideration to the rival contentions. It is not disputed even by the learned counsel for the assessee before us that under s. 254(2) the power of the Tribunal is limited to the rectification of mistakes which are apparent from record. It is also not disputed that the Tribunal does not have the powers to review its decision. Though the law on this issue is well-settled, following decisions may be quoted for the sake of ready reference: (....
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....ent of sugarcane price had become final and the Tribunal had no power to adjudicate upon that issue. It has further been pleaded that the Tribunal has recorded a finding that the deduction on account of liability of additional sugarcane price could be allowed as a deduction notwithstanding the quantification of the price having been done in the subsequent year. According to the learned counsel, the mode and manner of payment of additional sugarcane price or proper procedure as prescribed, not having been followed or no additional sugarcane price having been paid after the asst. yr. 1996-97, were not the relevant issue to be adjudicated since this issue does not arise from the order of the CIT(A). According to the learned counsel, the Tribun....
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....ble Supreme Court in the case of CIT vs. Mahalakshmi Textile Mills Ltd. (1967) 66 ITR 710 (SC), explained the powers of the Tribunal: "Under s. 33(4) the Tribunal is competent to pass such orders oh appeal 'as it thinks fit'. There is nothing in the IT Act which restricts the Tribunal to the determination of questions raised before the Departmental authorities. All questions, whether of law or of facts, which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the Departmental authorities in respect of a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the Departmental authorities and the Tribunal, and indeed they would be unde....
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....fined only to issues arising out of the appeal before the CIT(A) as too narrow a view to take of the powers of the Tribunal." 11. This principle has been reiterated by the jurisdictional High Court of Punjab & Haryana in the case of Atlas Cycle Industries Ltd. vs. CIT (1981) 21 CTR (P&H) 109 : (1982) 133 ITR 231 (P&H) and in the case of Patiala Biscuit Manufacturers (P) Ltd. vs. CIT (1976) 103 ITR 208 (P&H). There are several other decisions of various High Courts on this issue. But in the light of the decision of the Hon'ble Supreme Court and the decisions of the jurisdictional High Court referred to above, it is not necessary to refer to all these decisions. 12. Reference may also be relevant to r. 27 of the Tribunal Rules which rea....