TMI Blog1997 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Appellate Tribunal was correct in sustaining the addition of Rs. 3 lakhs to the net wealth for the assessment year 1983-84 ? 2. Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal having found that the payment to the outgoing partners are not in the nature of compensation or payment towards goodwill and since the addition of Rs. 3 lakhs was made by the Wealth-tax Officer, towards goodwill only, the Income-tax Appellate Tribunal was correct in law in arriving at a finding that the addition should be upheld not on the grounds of goodwill but as towards the cost of building under construction ? 3. Whether, on the facts and circumstances of the case, it was legal for the Income-tax Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entered into an agreement on November 5, 1982, whereby the assessee's wife allowed the firm to construct a multi-storeyed building in her property for being used as a hotel and lodging house. Since disputes arose between the partners, the partnership was dissolved on March 1, 1983, as per a deed of dissolution dated March 1, 1983, whereby the assessee took over all the assets and liabilities of the firm including the goodwill, trade name, etc. The Wealth-tax Officer added a sum of Rs. 3 lakhs being the amount paid to the outgoing partners at the rate of Rs. 60,000 each as the asset of the assessee on the ground that the amount was paid for the goodwill. He also held that the firm had a right to construct the building on payment of Rs. 2 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1985-86 were dismissed by the first appellate authority. The assessee filed second appeal before the Tribunal for the years 1984-85 and 1985-86 and the Revenue filed appeal for the year 1983-84. The Tribunal allowed the appeal filed by the Revenue in full and partly allowed the appeals filed by the assessee. The Tribunal took the view that it was difficult to imagine that the firm had acquired any goodwill since it came into existence on November 1, 1982, and was dissolved on March 1, 1983, when the building was under construction. Going by the accounts, the operations of the firm resulted not in profit but only in loss during the short period. According to the Tribunal, the mere fact that payment of Rs. 3 lakhs was described as paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is always open to the Tribunal to sustain the addition on a ground different from that relied on by the Wealth-tax Officer or the first appellate authority. In support of his contention, he relied on a number of decisions, including the decision of the Supreme Court in CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710. We find it difficult to accept the contention raised on behalf of the assessee that the Tribunal has gone outside the subject-matter of the appeal when it sustained the addition of Rs. 3 lakhs as payment made towards the cost of the building under construction. According to us, the subject-matter of the appeal was the addition of Rs. 3 lakhs. The decision in Pokhraj Hirachand v. CIT [1963] 49 ITR 293 (Bom) rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal to grant relief to the assessee on another ground, even when it rejects the contention raised by the assessee. By applying the same principle in the present case, we find no justification for the complaint of the assessee that the Tribunal has acted beyond its power under section 24(5) of the Wealth-tax Act. It has to be noted that in the questions formulated, the assessee had not stated that no opportunity was given to the assessee before the Tribunal took the view that the inclusion could be upheld as payment made towards cost of the building under construction. In the light of the above, we answer question No. 1 in all the three references in the affirmative, in favour of the Revenue and against the assessee. Since the other ques ..... X X X X Extracts X X X X X X X X Extracts X X X X
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