TaxTMI 
TaxTMI 
1986 (4) TMI 140
X X X X Extracts X X X X
X X X X Extracts X X X X
....hmikant Jain (Individual) which was disallowed by the ITO by applying the provision of s. 40(b) of the IT Act." However, on 16th Jan., 1986, the ITO requested that the following grounds be incorporated in this appeal as desired by the Commissioner: 1. The ld. CIT(A) Raj. II. Jaipur has erred in holding that the ITO was not justified in rejecting the book version and in making the addition of Rs. 74 lakhs on account of under valuation of closing stock and Rs. 16 lacs on estimated basis on account of alleged under invoicing of sales. 2. The CIT(A), Raj II, Jaipur, has erred in deleting the addition of Rs. 90 lacs made by the ITO on account of under valuation of closing stock and under invoking of sales. Again on 27th Jan., 1986; the ITO further requested for incorporation of the following ground: The ld. CIT(A) Rajasthan II, Jaipur has erred in deleting the two aforesaid additions made to the declared trading results of the assessee inspite of ITO's finding that g.p. rate declared this year being much lower than the earlier year and the defective and unreliable position of the assessee's accounts." 2. We have heard the representative of the parties at length in this ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issioner had already filed the appeal. Now whether the Commissioner could be allowed to take them or not a matter for this Tribunal to decide and not for the Board and the facts of this case show that there is no sufficient ground for allowing the Commissioner to do so. As pointed out above, the grounds now taken are wholly different. No sufficient reason for not taking the grounds in the first instance has been mentioned in the two applications submitting for taking the additional grounds on behalf of the Commissioner by the ITO. In fact even the Board's instructions have not been referred to in these applications. At the time of hearing the simple argument of the ld. D/R was that the other grounds were not recommended by the ITO (Judicial) who had screened the order of the CIT(A) due to his having misread the earlier order of the Tribunal. She also pointed out that the Department had a very strong case in relation to the other grounds and the previous orders of the CIT were absolutely of no help to the assessee in the present case. Although we did not hear the additional ground at length, she appeared to have a quite good case on merits. However, what it comes to is that the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....und. No material had been produced before the Tribunal to show as to whether the CBDT Circular was seen or received by the ITO. The ld. D.R. stated that here also the additional ground is on the basis of a letter issued by the CBDT. But here the additional ground is arising from the order of the CIT(A) not because of the letter of the CBDT. If the Department was aggrieved over the huge deletion of Rs. 74 lacs or 90 lacs, it was for it to take the ground in the first instance. A litigant cannot file an appeal in piecemeal. The question (sic) the advice of the CBDT asking the commissioner to take up the desirability of filing an appeal on this ground has already been considered by the Commissioner. May be that he took a wrong decision, but then the Department has missed the bus so far as the applicability of s. 145(2) is concerned. Even regarding under valuation of the closing stock, admission of additional ground at this stage would disturb the subsequent year's results. After all there has to be a finality to litigation which cannot be reopened again, and again. The order under appeal was passed on 17th April, 1985. The appeal itself was filed on 14th June, 1985. A defect memo was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 654 and 137 ITR 593. In view of this controversy, the Legislature has now thought fit to introduce Explns. (2) and (3) to s. 40 (b) which read as under: Expl. 2: Where an individual is a partner in a firm on behalf of or for the benefit, of any other person (Such partner and the other person being hereinafter referred to as "Partner in a representative capacity" and "Person so represented respectively." (1) interest paid by the firm to such individual to the firm otherwise than as partner in a representative capacity shall not be taken into account for the purposes of this clause; (2) interest paid by the firm to such individual to the firm as partner in a representative capacity and interest paid by the firm to the person so represented or by the person so represented to the firm, shall be taken into account for the purposes of this clause. Expl. 3: where an individual is a partner in a firm otherwise than as partner in a representative capacity, interest paid by the firm to such individual shall not be taken into account for the purposes of this clause if such interest is received by him on behalf or for the benefit of any other person". Although technically this ....