Law: Income Tax Act, 1961

Section: 84

(a) Income tax--Deduction Claim for deduction Enhanced claim for deduction before Tribunal than one claimed before assessing authority Tribunal has power to deal with a new or additional claim Tribunal can remand the case for consideration of enhanced claim. A I R 1968 S C 101 fol. 1978 Tax LR 122 (S C) distinguished. (b) Income tax Deduction Loss incidental to trade Assessee Company carrying (Al business of running buses under route permit Assessee entering into contract for sale of its bus-Repudiation of contract Damages by way of interest required to be paid by assessee by Court decree is loss incidental to assessee's trade allowable to deduction. JUDGMENT BALASUBRAHMANYAN, J. Both these tax cases arise on the same appellate order of the Income tax Appellate Tribunal Two questions of law arise for our consideration. The question we would like to dispose of first concerns the extent of the power of remand exercisable by Appellate Tribunal. This question has been formulated in the present case in the following terms: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was entertaining fresh grounds of appeal put forth by the assessee in directing the Appellate Assistant Commissioner to admit the fresh grounds and decide the case on merits notwithstanding the fact that the claim for deduction sought to be raised in the fresh grounds was not a point of dispute either before the Income tax Officer or before the Appellate Assistant Commissioner at the times of the original appeal proceedings?" The controversy relates to the quantum of deduction claimed by the assessee in respect of interest in a particular transaction. At the state of assessment, the assessee claimed an allowance of interest in the sum of Rs.37,132. The Income tax Officer disallowed the entire claim. The assessee appealed. The Appellate Assistant Commissioner allowed the appeal in part, and restricted the deduction to one fourth of the amount claimed, namely Rs.9,285. On further appeal by the assessee, the Tribunal remanded the matter to the Appellate Assistant Commissioner to go into the question once again. On remand, the Appellate Assistant Commissioner gave a…

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