TMI Blog1985 (3) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to the Export Credit Guarantee Corporation. The assessee preferred an appeal before the AAC against the disallowance of the deduction claimed for the said items. In the appeal, the assessee claimed further deduction under s. 35B of the I.T. Act, in respect of the following further heads : (a) Agency commission paid from the Cochin branch of the assessee; (b) Inspection and sampling charges (c) Telex charges; (d) Packing expenses; (e) Bank interest ; (f) Shipping expenses. The AAC allowed the deduction claimed of the agency commission spent from the Cochin branch of the assessee and also of the premium paid to the Export Credit Guarantee Corporation. Further deductions allowed were in respect of inspection charges, packing expenses and telex expenses. Deductions claimed of the steamer freight, shipping expenses and bank interest were disallowed. Further appeals were preferred both by the assessee and the Revenue before the Income-tax Appellate Tribunal. In its appeal, the assessee sought to raise the following two new grounds : (1) Export markets development allowance should have been given in respect of the total expenditure in the assessee's trading department of Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first time before the Tribunal. The new items in the additional grounds of appeal were supported by evidence on record inasmuch as deduction in respect of the same had been claimed and allowed under s. 37 of the Act. Further, weighted deduction for the said items were being claimed under s. 35B on the same evidence on record. Learned advocate submitted further that in the facts and circumstance, the principles laid down by the Supreme Court in Gurjargravures (P.) Ltd.'s case [1978] 111 ITR 1, did not apply. The Supreme Court in its earlier decisions had laid down principles relevant to the controversy in the instant case and the later decision in Gurjargravures had to be considered in the light of the said earlier decisions of larger Benches of the Supreme Court. Learned advocate for the Revenue contended, on the other hand, that the additional grounds sought to be raised before the Tribunal did not arise either out of the order of the ITO or that of the AAC. He submitted that there were no material or evidence on record to support such claim and, in fact, no claim had been made on these items even in the return of income filed by the assessee. . The cases cited at the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the appeal 'as it thinks fit'. There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions whether of law or of fact which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty, to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him. " (c) CIT v. Nelliappan [1967] 66 ITR 722 (SC). In this case, in assessing income-tax and excess profits tax for the relevant assessment years, the ITO rejected the books of account of the assessee and made several additions to the profits disclosed. The assessments were confirmed by the AAC and the Appellate Tribunal. On a reference, the Madras High Court remanded the case to the Tribunal directing them to determine two limited contentions of the assessee. At the hearing on remand, the assessee urged before the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffirmed the decision of the Tribunal. The Supreme Court on a further appeal reversed the decision of the High Court on the ground that there was neither any claim before the ITO for the relief sought for nor any material in support thereof. The Supreme Court, however, observed as follows (p. 5): " We are not here called upon to consider a case where the assessee failed to make a claim though there was evidence on record to support it, or a case where a claim was made but no evidence or insufficient evidence was adduced in support. In the present case neither any claim was made before the Income-tax Officer, nor was there any material on record supporting such a claim. " (e) CIT v. Gangappa Cables Ltd. [1979] 116 ITR 778 (AP). In this case, it was claimed by the assessee before the Tribunal for the first time that the expenditure incurred before the assessee went into commercial production were admissible deduction under s. 80J of the I.T. Act, 1961. The Tribunal allowed the question to be raised as the relevant accounts were before the ITO and practically all details for adjudication on the new claim were on record. The decision of the Tribunal was upheld by the Andhra Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellate authority for the first time . ...... the claim in this case having been put forward by the assessee even at the assessment stage, although at a lesser sum, the claim cannot be shut out in limine at the appellate stage merely because the appellate authority had to go into a larger question in a matter of quantum on the same subject of claim, or because the claim was sought to be put forward from a different angle." (i) Bihar State Road Transport Corpn. v. CIT [1984] 149 ITR 208 (Pat) [FB]. In this case, it was held by the Patna High Court that the Incometax Appellate Tribunal had jurisdiction to refuse permission to an appellant before it to raise for the first time a new question of fact which could not be investigated without taking further evidence. In this case, the original appeal was in respect of the charging of interest under s. 217 of the I.T. Act, 1961. An additional ground of appeal was sought to be introduced later claiming that the assessee's income was exempt under s. 11 or the Act. (j) CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499 (Guj) [FB]. In this case, the assessee had claimed relief under s. 80J of the I.T. Act, 1961, in the two as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal which were sought to be raised by the assessee in the instant case, ex facie, relate to its claim under S.35B of the I.T. Act 1961, which provides for a special export markets development allowance. It is a matter of record that the assessee had made claim before the ITO under the same S.35B in respect of particular items of expenditure. The ITO allowed some of the items and rejected the others. In the appeal before the AAC, claims under the said section were pursued and the assessee had obtained relief under the said section in respect of other items. In the further appeal before the Appellate Tribunal, claim was again made under the same section where several new items relating to the same claim which had not been pressed in the earlier proceedings were sought to be introduced. It cannot be said that the claim of the assessee was a new claim. In our view, the assessee has sought only to enhance or expand its original claim by including therein other items. We accept the contention of the assessee that the new items claimed were supported by the evidence on record as they were included in the statement of accounts filed before the ITO. Deduction had been sought f ..... 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