Law:

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Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Orders of - Assessment year 1995-96 - Whether where Tribunal had decided an issue on merits one way or other in detail by assigning reasons in some earlier case, then it is not required again to repeat exercise of deciding same issue on merits in subsequent year's cases involving same point, but, certainly Tribunal is under a legal obligation to formulate in short, question involved and then quote its reasoning already arrived at in its main/leading order in extensio in case Tribunal does not wish to add any more reasoning in its earlier order - Held, yes FACTS The assessee was a partnership firm. As per partnership deed, the working partners were authorized to draw salary in accordance with the profit sharing ratio. For the relevant assessment year, the revenue disallowed the salary paid to the partners. On appeal, the Commissioner (Appeals) held that the payment of salary to the partners was allowable. On the revenue's appeal, the Tribunal upheld the findings of the Commissioner (Appeals) and further held that the said issue had also been decided by the Bench in favour of the assessee in the assessee's own case in ITA No. 436 (Ind.) of 1999 for the assessment year 1994-95. On appeal : HELD From the order of the Tribunal, it could not be known as to what the Tribunal actually decided in the instant case. The High Court could only know the submission of parties and conclusion of the decision 'against the revenue' but not the reasons for coming to such conclusion at least in its real judicial sense. Reasons were not there because they were somewhere else and probably in the order passed by the Tribunal in earlier year case. In such a situation, the Court could not know those reasons for examining them on merits as an appellate Court as to whether those 'so-called reasons' existed or not and secondly, whether they were legally sustainable or not and whether those reasons influenced the Tribunal to dismiss the appeal. [Para 4] If the Tribunal feels that it had already decided the issue on merits one way or other in detail by assigning reasons in some earlier case, then certainly, it is not required to…

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