TMI Blog1996 (9) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... erred the following two questions under section 256(2) of the Income-tax Act, 1961, for consideration of this court : "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in accepting the assessee's alternative argument raised for the first time before them for set off of the unexplained cash credits against the estimated addition to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see disclosed profit at 20 per cent. However, he did not choose to make an addition on that score. After examining the accounts of the firm, the Income-tax Officer found that there was an understatement of closing stock to an extent of Rs. 2,11,246 and that expenses in regard to the earlier years were unvouched. He, eventually made an addition of Rs. 2,11,246 towards closing stock not brought into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea of the assessee in respect of one transaction. On further appeal, the Income-tax Appellate Tribunal reduced the gross profit addition to Rs. 1,50,000 but confirmed the cash credit addition of Rs. 1,21,000. The assessee then advanced an alternative argument based upon the ruling of the Supreme Court in Anantharam Veerasinghaiah and Co. v. CIT [1980] 123 ITR 457 that the cash credit addition s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal may give leave to the assessee to urge grounds not set forth in the memorandum of appeal, and in deciding the appeal, the Tribunal is not restricted to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal. The Tribunal was, therefore, competent to allow the assessees to raise the contention relating to the cash credits which was not made the subject-matter of a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld from the books and the cash credit entries, it cannot be said that the conclusion is based upon speculation. The first question sought to be raised is, therefore, purely one of fact and could not be referred under section 66." As the addition on the ground of increase in the rate of profit was made by the Commissioner of Income-tax at the appellate stage, the assessee could not have raised th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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