Law: Income Tax Act, 1961

Section: 254

Income-tax---Appeal to Appellate Tribunal---Powers of Tribunal---Tribunal has power to admit additional ground of appeal---Tribunal has power to remand matter to ITO ---Indian Income Tax Act, 1961, S.254. Held, that the Tribunal admitted the additional ground since allowing the entertainment expenditure was part of adjustment of tax liabilities of the assessee. Therefore, it could not be said that the Tribunal was incorrect in admitting the additional ground. However, without any orders by the authorities below on this aspect, it would not be possible for the Tribunal to render any decision on this aspect. Under such circumstances, this matter was remitted back to the Income-tax Officer for the purpose of disposing of the same afresh in accordance with law. There was no infirmity in the order of remand. CIT v. Patel Brothers & Co. Ltd. (1995) 215 ITR 165 (SC) and Oil and Natural Gas Commission v. Collector of Central Excise (1992) 104 CTR 31 (SC) ref. JUDGMENT K.A. THANIKKACHALAM, J.---In compliance with the direction given by this Court in T.C. No.120 of 1980, the Tribunal referred the following two questions for the opinion of this Court under section 256(1) of the Income Tax Act, 1961: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal had jurisdiction to allow the assessee to raise the additional ground and directing the Income-tax Officer to go into the assessee's claim for deduction towards entertainment expenses and allow the same on the basis of the decision of the Appellate Tribunal in I.T.A. No.172/MDS of 1968-69, dated October 19, 1971? (2) Whether, on the facts and in the circumstances of the case, that part of the entertainment expenditure which are admissible as a deduction under section 20 should not be taken into consideration for allowance of entertainment expenditure while applying the provisions of section 37(2B) for the assessment year 1970-71?" The assessee is one of the fourteen nationalised banks. The only question, which is the subject-matter of this reference, is the question of jurisdiction of the Tribunal to admit an additional ground relating to the claim for deduction of entertainment…

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