TaxTMI 
TaxTMI 
1983 (5) TMI 47
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....e left for the said studies, he was already a partner in the assessee-firm for two years. A sum of Rs. 60,678 was spent which was disallowed by the ITO on the ground that it had nothing to do with the business carried on by the assessee. On appeal, the Commissioner (Appeals) had confirmed the same. On further appeal, the Tribunal by their order dated 25-11-1980 in IT Appeal No. 2550 (Bom.) of 1979 considered the claim of the assessee and came to hold that the expense under consideration was for the purpose of the business carried on by the assessee-firm, and that it was neither personal nor capital in nature. Hence, they allowed the sum of Rs. 60,678 as revenue expense in the assessment year 1978-79. In the subsequent assessment year 1979-80, which is now under consideration, the assessee claimed a sum of Rs. 36,786 as expense for the same purpose, namely, the education and training of one of the partners in Business Management in the United States. The ITO disallowed the claim of the assessee on the ground that the department had not accepted the decision of the Tribunal. 4. The assessee appealed to the Commissioner (Appeals) and contended that its claim should have been accept....
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....f the Supreme Court. Shri V.H. Patil urged before us that by the same analogy, the Commissioner (Appeals) erred in not following the earlier order of the Tribunal, insofar as judicial propriety is concerned. He then referred us to the decision in the case of CIT v. L.G. Ramamurthi [1977] 110 ITR 453 (Mad.), in which it has been held that a Tribunal should not come to a conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the same facts. He urged that the facts and circumstances during the year under consideration remained exactly the same as in the preceding year, which were considered by the Tribunal in their order dated 25-11-1980. Next, he pointed out that it was incorrect to say that the Tribunal did not consider the decision in the case of Travancore Titanium Product Ltd. because the same has been referred to in para 2 of the order dated 25-11-1980 of the Tribunal. Besides, in paragraph 4 of the order of the Tribunal, it has been observed : " It is not necessary, in our opinion, to deal with the various decisions cited at the Bar as the decision of the Gujarat High Court in CIT v. Natwarlal Tribhovandas [1973] 87 ITR 703 would help us to ....
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....ommissioner (Appeals) did not mean any disrespect to the earlier order of the Tribunal, he urged before us that the earlier decision requires reconsideration in the light of the decision in the case of Travancore Titanium Product Ltd.. In the alternative, he urged that the expense has to be considered as a capital expenditure. He placed his contention before us on the authority of rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963. Further he referred to the decision in the case of B.R. Bamasi v. CIT [1972] 83 ITR 223 (Bom.) wherein it has been held that the assessee is entitled to raise a new ground of law which does not necessitate any other evidence to be recorded even though he is not in appeal. He urged that the principle of res judicata is not applicable to the proceedings before the Tribunal, and so, the earlier decision of the Tribunal required reconsideration in the light of the new pleadings now raised before us. 7. Shri V.H. Patil replied that the department was precluded from raising a new ground at this stage to the effect that the expenditure should be regarded as capital, particularly when the Tribunal has already recorded a finding in the earlier year tha....
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....s beneficial to any business does not, in any way, obliterate the fact that it is beneficial to the particular business carried on by the assessee-firm. In our considered opinion, the expenditure under consideration incurred for the training of one of the young partners in the techniques of modern Business Management has been definitely incurred wholly and exclusively for the purpose of the assessee's business. The mere fact that it has incidentally benefited the partner himself is immaterial vide the decision in the case of Sassoon J. David. We, therefore, on a reconsideration of the facts of the case and the pleadings before the Tribunal when they passed the order for the earlier year, as well as the pleadings before us, come to the conclusion that according to the principles laid down in the case of Travancore Titanium Product Ltd. as well as Sassoon J. David's case, the expenditure under consideration has been incurred for the purposes of the assessee's business. Admittedly, it is not personal. We find force in the argument that rule 27 of the Appellate Tribunal Rules does not authorise to raise a new ground at this stage because that rule says that the appellant can support th....