TaxTMI 
TaxTMI 
2024 (9) TMI 654
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....IT(A) is partly allowed. The Assessment Year in question 2000-01. The revenue in assailing the orders passed by the Tribunal has raised the following three questions of law: "4.1 Whether on the facts and in the circumstances of the case, the Hon'ble ITAT can decide the issue for which the respondent is not aggrieved by any order of Assessing Officer or CIT(A) and also the issue for which the respondent has not appealed against? 4.2 Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in holding that interest income earned on compulsory deposits of share application money or subscription money is a capital receipt even when the Respondent never made any such claim either in the course....
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....cordingly, such objection as urged on behalf of the revenue was rejected. It is against such finding of the tribunal, question of law no. 4.1 and 4.2 have been raised. 3. We may observe that in National Thermal Power Company Ltd., the Supreme Court considering the provisions of Section 254 of the Act has observed that the object of proceedings before the Taxing Authorities is to assess correctly the tax liabilities of an assessee in accordance with law. Illustratively, it was observed that as a result of a judicial decision being rendered while the Appeal was pending before the Tribunal, if it was found that a non-taxable item is taxed or a permissible deduction is denied, there was no reason why the assessee should be prevented from rai....
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....red on its own facts. However, the Appellate Authority was required to be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. In these circumstances, it was observed that what was expected was that the Appellant Authority exercises its discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reasons. The law as laid down in Jute Corporation of India Ltd.(supra) was held to be applicable even in such situations arising before the Tribunal. The Supreme Court held that it would not be appropriate for the Tribunal to take narrow view of the matter. In considering the aforesaid clear position in law, certainly we are quite su....
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....proached CIT(A) being aggrieved with the Assessing Officer in not allowing set off qua the interest income against the public issue expenses in accordance with the directions of the Tribunal, which rejecting the claim for deduction of interest income from public issue expenses. 5. The Appellate Authority partly allowed the claim of the assessee but affirmed the decision of the Assessing Officer in not allowing the set off of interest income from "Share Application Money". The proceeding thereafter reached the Tribunal, wherein the Tribunal allowed the claim of the assessee with deduction on account of the interest income and remanded the matter to the Assessing Officer on other issues. It is in these circumstances, the proceeding reached....
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....itional income then the income is not liable to be assessed and is eligible to be claimed as deduction. Putting the above rationale in terms of the present case, if the share application money that is received is deposited in the bank in light of the statutory mandatory requirement then the accrued interest is not liable to be taxed and is eligible for deduction against the public issue expenses. The issue of share relates to-capital structure of the company and hence expenses incurred in connection with the issue of shares are to be capitalized because the purpose of such deposit is not to make some additional income but to comply with the statutory requirement, and interest accrued on such deposit is merely incidental. In the pre....