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2016 (11) TMI 1718 - HC - Income TaxRectification of mistake u/s 254 - excess addition on account of ‘on–money’ - whether the Tribunal is duty–bound to grant relief to the assessee as claimed during the hearing on the basis of the case eventually found by it, even if there is no specific ground of appeal raised before it in support of such relief.? - HELD THAT:- When an appeal from an assessment is brought before the Tribunal under Section 254(1) of the Act, all questions arising there-from, including questions which are incidental or consequential to such assessment, are open to be agitated before the Tribunal. The Tribunal is empowered to “pass such orders thereon as it thinks fit”. It is one thing to say that the Tribunal must confine itself to the subject matter of the appeal and not go beyond it, but quite another to say that whilst deciding such subject matter it cannot consider questions which are incidental to, or would follow as a consequence of, its determination. If the Tribunal rejects the assessee's case on a particular ground, and if such ground affords a certain relief to the assessee without his having to ever any new facts, such relief cannot be denied on the footing that the assessee never claimed it. If the assessee did not claim it, the Tribunal must grant it suo motu, as a matter of law, if the relief does follow as a legal incident. Our Court held that the alternative submission did not amount to raising of an additional ground of appeal but the submission was a different facet of the same controversy; it was merely consequential to the finding of the tribunal against the assessee. The submission would not arise in case the tribunal accepts the assessee’s contention for deduction of the amount as revenue expenditure; but where the tribunal turns down the assessee’s claim and holds it to be capital expenditure, “it is the duty of the Tribunal, even without an alternative submission, to pass necessary consequential orders, suo motu, to give further directions in the matter as the situation may warrant”. We are of the view that the Tribunal was bound in law to consider the alternative plea raised by the assessee at the hearing of the appeals. The question now is, what relief should be granted on the applications before us. The miscellaneous application taken out before the Tribunal by the assessee clearly brings out an error apparent on record insofar as the original order passed by the Tribunal is concerned. It is particularly so since both the decisions in CIBA India [1993 (1) TMI 35 - BOMBAY HIGH COURT] and Mahalakshmi Textile Mills [1967 (5) TMI 4 - SUPREME COURT] were already available when the Tribunal considered the matter. We are, therefore, of the view that it would be more appropriate to allow the miscellaneous application and direct the Tribunal to consider the alternative plea of the assessee in the light of what we have stated above. Since the final order of the Tribunal on the appeal can only be crystallized after the plea is so considered by the Tribunal, the Reference may have to be returned unanswered. The writ petition is, accordingly, allowed and the impugned order passed by the Tribunal on the miscellaneous application to the extent it relates to assessment years 1987-88 and 1988-89, is set aside and the miscellaneous application is allowed by directing the Tribunal to consider the alternative plea raised by the assessee in the light of what we have observed above. The Tribunal shall now decide the appeal on merits.
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