TMI Blog1977 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, and, in respect of the assessment year 1963-64, under s. 84 of the I.T. Act, 1961. For the purpose of granting such relief, it was necessary to compute the capital employed in the assessee's industrial undertaking. The contention of the assessee before the ITO was that one-half of the net profits earned during the course of each assessment year was required to be taken into account for ascertaining the average amount of capital employed in the business during each computation period. The ITO rejected the aforesaid claim. In the appeal against each assessment order, the AAC confirmed the decision of the ITO. In separate further appeals against the aforesaid decision before the Income-tax Appellate Tribunal, the assessee originally challenged the decision of the lower authorities in so far as it related to the aforesaid ground. In addition, the assessee sought permission of the Tribunal under r. 11 of the Income-tax (Appellate Tribunal) Rules, 1963 (hereinafter referred to as " the Tribunal Rules "), to add and be heard in respect of the following ground : "The appellant submits that while determining capital employed for the purpose of section 15C/84, no deduction could be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits of the relevant years for the purpose of computing the capital employed for working out the relief under s. 15C or s. 84, as the case may be. Turning now to the first question, the contention of the Revenue before the Tribunal appears to have been that since the point sought to be raised by the additional ground, which the assessee wanted to urge before the Tribunal, was not raised before the ITO or the AAC during the course of the assessment (or appeal) proceedings, it was not open to the assessee to raise and the Tribunal to permit it to raise such a totally new dispute at the stage of second appeal before the Tribunal. In support of this submission, the Revenue relied upon the decision of this court in CIT v. Karamchand Premchand Pvt. Ltd. [1969] 74 ITR 254. The Tribunal, relying upon one of its earlier decisions, held that in Karamchand Premchand's case, the attention of this High Court had not been drawn to the decisions of the Supreme Court in Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232 (SC) and CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 (SC) and that had the attention of this High Court been drawn to those two decisions " perhaps the judgment in that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC) and in Mahalakshmi Texid Mills Ltd.'s case [1967] 66 ITR 710 (SC) do not lay down anything contrary to what has been observed by this High Court in Karamchand Premchand Pvt. Ltd.'s case [1969] 74 ITR 254 (Guj)... it cannot be said that what has been held by this High Court in Karamchand Premchand Pvt. Ltd.'s case [1969] 74 ITR 254 (Guj) is in any way in conflict with the decisions of the Supreme Court in Hukumchand Mills Ltd.'s case [1967] 63 ITR 232 (SC) and Mahalakshmi Textile Mills Ltd.'s case [1967] 66 ITR 710 (SC). This High Court has merely applied one aspect of the principle ........ It would thus appear that the Tribunal was in error in refusing to follow the decision of this court in Karamchand Premchand's case [1969] 74 ITR 254 on the presumption that the decisions of the Supreme Court in Hukumchand Mills Ltd.'s case [1967] 63 ITR 232 and Mahalakshmi Textile Mills Ltd.'s case [1967] 66 ITR 710 (SC) laid down a different legal proposition and that had the attention of this court been drawn, when it decided Karamchand Premchand's case [1969] 74 ITR 254 (Guj) to those two decisions, " the judgment in that case would have been different ". The question then is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 723 (Guj) and CIT v. Sayaji Mills Ltd. [1974] 94 ITR 26 (Guj). The decisions of various other High Courts on the point under examination were also considered. This court ultimately recorded its conclusion in the following words (p. 700): " In our opinion, the legal position has to be considered ultimately in the light of the decisions in Hukumchand Wills Ltd.'s case [1967] 63 ITR 232 (SC) and Mahalakshmi Textile Mills Ltd.'s case [1967] 66 ITR 710 (SC). First, it must be found out what is the subject-matter of the appeal and that can be determined only by finding out what the Appellate Assistant Commissioner expressly or impliedly decided. We must emphasise again that by implied decision, we mean that though a point might have been raised before the Appellate Assistant Commissioner in his final order the Appellate Assistant Commissioner might not have dealt with that Point and thereby impliedly rejected it. That is an implied decision of the Appellate Assistant Commissioner and a party may be aggrieved by an express decision of the Appellate Assistant Commissioner or by an implied decision of the Appellate Assistant Commissioner. The subject-matter of the appeal before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise the same plea before it for the first time. The legal position bearing on the extent of the jurisdiction of the Tribunal to allow the parties before it to raise points which were not raised before the departmental authorities is thus no longer open to doubt or debate. It is not open to the Tribunal to allow the assessee to raise before it for the first time a question which was not urged before the AAC, for, such a question could never form the subject-matter of the appeal before the Tribunal. The subject-matter of an appeal before the Tribunal can be determined only by finding out what the AAC expressly or impliedly decided. An express decision would find a place in the order of the AAC and, in such a case, there would be no difficulty. An implied decision can be inferred when a point might have been raised before the AAC, but in his order the AAC might not have dealt with the same and thereby impliedly rejected it. A question falling in either of these two classes of cases alone can form the subject-matter of an appeal before the Tribunal. Since the Tribunal has very wide powers to deal with all questions of fact and law pertaining to the subject-matter of an appeal, it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on facts was laid before the departmental authorities and upon which no findings were invited, was thus sought to be raised for the first time before the Tribunal and such aspect cannot be said to be the subject-matter of the appeal before the Tribunal, having regard to the aforesaid well-settled legal position. It was, however, urged on behalf of the assessee that the question as to the grant of relief under s. 15C or s. 84, as the case may be, was before the AAC and so also was the further question of computation of capital employed in the industrial undertaking of the assessee for the purpose of the grant of such relief. In the process of computation of capital employed, proceeded the argument, the departmental authorities up to the stage of the AAC, must be taken to have impliedly decided that the liability incurred and debt due by the assessee were required to be deducted and, therefore, the aspect whether such deduction was rightly made must be treated as being the subject-matter of the appeal before the Tribunal. We are of the view that having regard to the decision in Steel Cast Corporation's case [1977] 107 ITR 683 (Guj), it is not open to us to entertain this submis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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