TaxTMI 
TaxTMI 
2013 (7) TMI 13
X X X X Extracts X X X X
X X X X Extracts X X X X
....8 Revenue's CO : C.O. No.03/Hyd/2013 (in ITA No.98/Hyd/2012) 2. Facts of the case leading to the filing of the present appeal by the assessee and the Cross Objection by the Revenue are that the assessee engaged in the business of works contracts, has filed return of income for the assessment year 2007-08 on 24.10.2007 admitting a total income of Rs.20,21,95,340, and the same was processed under S.143(1) of the Act. Subsequently, in the scrutiny assessment that ensued, assessment was completed on a total income of Rs.20,45,15,769, vide order dated passed under S.143(3)of the Act, after making the following two disallowances- (a) Lump sum disallowance of expenditure under the heads of transport charges, repairs and maintenance, spreading and assortment expenses and other work expenses on the ground that they are self-made vouchers and non-verifiable due to lack of proper details of recipients and their addresses. - Rs.20,00,000 (b) Disallowance of provisions for defective liability period - Rs.1,45,409 Subsequent to the scrutiny assessment as above, a survey operation under S.133A was conducted in the premises of the assessee company and thereafter a notice was issued und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g at capital gains of Rs. 54,11,46,794/in the hands of the assessee company, by making allegations, assumptions and surmises on the basis of statements recorded in the back of company and letters obtained which are not furnished to the company in right time. 3. The learned C.I.T (Appeals) is not justified in upholding the action of the A.O in disallowing the claim of the assessee for exemption of capital gains of Rs. 7,25,53,044/- on sale of agriculture lands which are exempted capital asset uls 2(14) iii (a) and (b) of Income Tax Act. This exempted capital gains ofRs 7,25,53,044/- was already included in capital gains of Rs. 54,11,46,794/added by the A.O. 4. The learned C.LT (Appeals) is not justified in upholding the addition made by the assessing officer hypothetically calculating interest @ 14 % on business advances of Rs.l3,45,33,363/- given by the company to its sub-contractors, for the purpose execution of sub-contract works given to them for the purpose of the business of the company, which comes to Rs.1,88,34,6701- and thereby disallowing this amount from the head of expenditure " Interest and Finance" charges debited to the P&L Account, thus leading to addition ofRs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and we have perused the decisions on which reliance is placed from both the sides. The Tribunal while dealing with the subject-matter of the appeal in exercise of its power, it may allow the party to take up a new ground of appeal. In other words, the Tribunal has power to permit the assessee to raise a new ground of appeal, not set forth in the memorandum of appeal, even without formal amendment of the grounds set forth in the memorandum of appeal provided that a new ground does not involve a further investigation into the facts. This power of Tribunal is spelt out in Rule 11 of ITAT Rules, 1963. Hon'ble Punjab & Haryana High Court has held in the case of Vijay Kumar Jain v. CIT (99 ITR 349) that the Tribunal may allow a party to press a ground which he does not press before the first appellate authority although he has taken and included in the grounds of the first appeal. The proposition of law on the issue of admission of additional or new grounds by first appellate authority was laid down by the Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. v. CIT(187 ITR 668) and in the case of National Thermal Power Co. Ltd. v. CIT (229 ITR 383) wherein it was held tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the CIT(A) is too narrow a view to take off the powers of the Tribunal. Thus, the settled legal position, which emerges from the aforesaid judicial pronouncements, is that the purpose of assessment proceeding is to tax/assess the taxable liability/income of the assessee correctly in accordance with law and if the assessee is entitled to certain relief, deduction or benefit, the assessee should not be denied or deprived of it, even if the claim pertaining to the same is made for the first time before the Tribunal during pendency of appeal before it. In the present case, the issues raised in additional grounds are the legal issues which go to the root of the matter and for deciding these legal issues no new facts are required to be considered as all the facts are already recorded in the orders of the authorities below. In this view of the matter, respectfully following the decision of the Apex Court, we admit the additional grounds raised by the assessee. However, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee, in whose hands protective addition corresponding addition on substantive basis has been made in the case of M/s. K.N.R. Constructions, effective grounds fo the assessee read as follows- "The order of the learned CIT(A) is erroneous in law, contrary to facts and against the principles of equity and natural justice. 02. The lower authorities failed to appreciate the fact that the disallowance of depreciation Rs 18,01,855 aginst the claim of Rs. 35,88,530.80/represents depreciation on WDV at the beginning of the year and no excess depreciation was claimed on fixed assets as alleged by lower authorities. 03. Non consideration of unabsorbed depreciation loss of Rs. 22,02,058/- alleging it to be business loss is against facts which is available on record and therefore disallowance of carry forward depreciation as business loss is unjustified. 04. The addition of Rs 1,02,00,000/- invoking the provisions of Sec 68 even after showing that the amounts were received through account payee cheques from limited companies for the business purpose, evident from bank statements, apart from the fact that part of the loan were repaid and, therefore the very addition is unsustai....