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2010 (3) TMI 1141 - AT - Income TaxAppeal filed u/s 253(2) - seek a correction of a mistake - HELD THAT:- In view of the facts and circumstances of the case and the legal position , We find that the CIT(A) has rightly held that the additions in respect of unaccounted expenses claimed by the assessee could not be made u/s 69C. In an appeal filed u/s 253(2) the department could not travel beyond the order of the CIT (A) and say that AO had erroneously invoked section 69C and that he should have made the addition u/s 37(1). The scheme of section 253(2) does not permit such a stand on the part of the department. In the case of Indian Steel & Wire Products Ltd. v. CIT [1993 (6) TMI 20 - CALCUTTA HIGH COURT], the Court held that a fresh plea which altogether changes the complexion of the case as originally brought before the CIT(A), cannot be raised at the stage of hearing before the Tribunal. The Tribunal is supposed to decide only the issues which were the subject-matter of the first appeal. In the result, all the three appeals filed by the department are dismissed. Per Vijay Pal Rao, Judicial Member - HELD THAT:- Following the decisions case of the Tarajan Tea Co. (P.) Ltd. [1993 (7) TMI 67 - GAUHATI HIGH COURT], Thanthi Trust [1998 (2) TMI 62 - MADRAS HIGH COURT], Assam Tribune [2006 (4) TMI 85 - GAUHATI HIGH COURT]. It is clear that the Tribunal has the jurisdiction and power to entertain a fresh plea on the subject-matter of the appeal before it and to pass necessary directions for ascertainment of relevant facts and deciding the issue by applying the correct provisions of law. In the case in hand the subject-matter is same for which the learned Departmental Representative has raised a plea that the claim of unaccounted expenditure is required to be decided u/s 37(1) and not u/s 69C as wrongly applied by the AO. Since the claim of the expenditure was disallowed by the AO, therefore in any case by entertaining this plea and remanded the matter to the AO for correcting the application of law shall not amount to enhancement of assessment. In view of the above discussion and decisions of the Hon’ble Supreme Court and the Hon’ble High Courts, the contentions raised by the learned Departmental Representative are accepted. The orders of the lower authorities are set aside and the matter is remanded to the record of the AO for reconsidering the claim of the assessee for unaccounted expenditure u/s 37(1). THIRD MEMBER ORDER Per Pradeep Parikh, Vice-President - Whether, on the facts and circumstances of the case, the Tribunal had jurisdiction to accept the fresh plea of the learned DR and direct the AO to examine the assessee’s claim u/s 37(1) - HELD THAT:- In the light of the discussion and cases, I agree with the view taken by the ld. J.M. to hold that the plea raised by the ld. D.R. is to be accepted and the matter is to be remanded to the AO for considering the claim of the assessee for claiming deduction of unaccounted expenditure u/s 37(1). The matter may now be placed before the Division Bench to give effect to the majority view. Per Abraham P. George, Accountant Member. - In all these three appeals there arose difference of opinion between Members of the Division Bench hearing the appeal. Therefore the matter was referred to the Third Member. Hon’ble Vice-President acting as Third Member has agreed with the view of the Learned Judicial Member. Therefore in view of the majority decision the orders of the lower authorities are set aside and matter is remanded to the record of the AO for reconsidering the allowability or otherwise of the claim of unaccounted expenditure, u/s 37(1). In the result, the appeal filed by the revenue is allowed for statistical purposes.
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