TMI Blog1999 (11) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was right in law in admitting the additional ground on the issue which was not adjudicated by the first appellate authority and not even taken originally before the Income-tax Appellate Tribunal ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in admitting the assessee's appeal regarding deduction under section 32AB from the profits, the assessee having already conceded the issue before the Commissioner of Income-tax (Appeals) ? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right, in law in holding that deduction under section 32AB was not required to be made from the profits while working out deduction und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectified under section 154 of the Act. The explanation of the assessee, however was rejected and the Assessing Officer vide order under section 154 of the Act dated January 29, 1990, reduced the deduction under section 80HHC from Rs. 45,94,000 to Rs. 37,68,101. Aggrieved by the above order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) for short "the CIT(A)"), Ludhiana. During the course of arguments before the Commissioner of Income-tax (Appeals), the assessee conceded that it had no objection to the computation of profits after deduction of allowance under section 32AB. However, it contested the other issue on the ground that out of the total turnover of Rs. 2,89,93,277 a paltry sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over. However, on the other issue, the assessee referred to the decision of the Tribunal, dated August 31, 1994, in the case of Munjal Steel wherein a deduction under section 80-I was ordered to be allowed on profits before setting off the brought forward losses as well as allowance under section 32AB. In the aforesaid case, the Tribunal had relied on one of its earlier orders and also on the decision of the Orissa High Court in the case of CIT v. Tarun Udyog [1991] 191 ITR 688. The assessee, therefore, justified the calculation made by the auditor for claiming the said deduction. It was further argued that at any rate the issue was of a highly debatable nature on which two views were clearly possible and as such it could not be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was debarred from disputing the same before the Tribunal. Shri B. S. Gupta, senior advocate, appearing for the assessee, argued that the additional ground was purely a legal ground not requiring any inquiry into the facts of the case and as such could be validly raised before the Tribunal. For this purpose, he relied on the decision of the Supreme Court in the case of Jute Corporation of India [1991] 187 ITR 688. Thus, according to him, question No. 1 being an issue covered by the decision of the apex court was not a referable question of law. He further pointed out that although the assessee had given no objection before the Commissioner of Income-tax (Appeals) to the computation of export profits after deduction of the allowance unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e being a purely legal issue going to the very root of the controversy could be raised before the Tribunal. Thus, in view of the settled position, question No. 2 also requires no reference. Question No. 31 as has been correctly pointed out by learned counsel for the assessee, does not arise out of the order of the Tribunal at all. The Tribunal has nowhere given a finding that the deduction under section 32AB was not required to be deducted from the profits while working out the deduction under section 80HHC. All that the Tribunal has held is that this issue was a contentious issue and as such fell beyond the scope of a mistake apparent from the record which could be rectified under section 154. No fault can be found with this finding of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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