TaxTMI 
TaxTMI 
2017 (6) TMI 546
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....ssessee. 2. The Ld. Commissioner of Income Tax(Appeals) erred in confirming the disallowance of interest to the extent of Rs. 17 ,52,000/- 3. The Ld. Commissioner of Income Tax(Appeals), while confirming the disallowance of Rs. 17,52,000/-, ought to have appreciated that the impugned investment had been made out of the appellant's own funds. 4. The Ld. Commissioner of Income Tax(Appeals) erred in confirming the disallowance of Rs. 1,62,300/- 5. The Ld. Commissioner of Income Tax(Appeals), while confirming the disallowance of Rs. 1,62,300/- ought to have appreciated that out of the total payment of insurance of Rs. 30,76,827/-, Rs. 28,88,890/- pertains to the year of account and the balance amount rela....
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....g balance. 10. The AO ought to have appreciated the fact that the provisions of section 43B cannot be invoked for disallowance of gratuity and which is an opening balance. 11. The AO ought to have appreciated the fact that the assessee has maintained its books of account as per Accounting Standards issued by ICAI and method of accounting followed by assessee could not be discarded and expenditure entitled cannot be denied. 12. The AO ought to have appreciated the fact that gratuity is scientifically derived and is allowable irrespective of paid or payable". 3. Brief facts of the case leading to the above appeal are that the assessee company, which is engaged in the business of running of hotels, filed its return of inco....
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....d the assessee is in second appeal before us raising grounds of appeal 1 to 5 against the additions confirmed by the CIT (A) and also grounds 6 & 7 against the disallowance made u/s 43B(b) of the Act. 5. As regards the disallowance u/s 43B(b) of the Act, the assessee has raised the additional grounds of appeal. It is submitted that the amount disallowed by the AO is the opening balance of provision for gratuity and has not accrued during the relevant previous year and therefore, no disallowance can be made in this A.Y. He filed before us a copy of the ledger account to demonstrate that the opening balance of the gratuity payment was Rs. 23,29,548 and the closing balance was Rs. 21,75,031.73 and thus, there is no claim of deduction for gr....
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....parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see an....
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....raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 7. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Cellulose Products of India Ltd. . Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only r....
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....needed as the assessee's books of account would clearly reflect whether there is any claim of deduction for the relevant previous year. In view of the same, we are inclined to admit the additional grounds of appeal filed by the assessee and remit the issue to the file of the AO with a direction to verify the claim of the assessee and to adjudicate the same in accordance with law. 8. As regards grounds 2 and 3 are concerned, it is seen that M/s. Mayuri India Cusine Inc. is a foreign company and the dividend income earned from such a nonresident company is not exempt from tax but is taxable under the category 'Income from other sources'. Therefore, the provisions of section 14A would not come into play. The AO has clearly erred in observin....