TMI Blog2016 (11) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain relief to the assessee without his having to ever any new facts, such relief cannot be denied on the footing that the assessee never claimed it. If the assessee did not claim it, the Tribunal must grant it suo motu, as a matter of law, if the relief does follow as a legal incident. Our Court held that the alternative submission did not amount to raising of an additional ground of appeal but the submission was a different facet of the same controversy; it was merely consequential to the finding of the tribunal against the assessee. The submission would not arise in case the tribunal accepts the assessee s contention for deduction of the amount as revenue expenditure; but where the tribunal turns down the assessee s claim and holds it to be capital expenditure, it is the duty of the Tribunal, even without an alternative submission, to pass necessary consequential orders, suo motu, to give further directions in the matter as the situation may warrant . We are of the view that the Tribunal was bound in law to consider the alternative plea raised by the assessee at the hearing of the appeals. The question now is, what relief should be granted on the applications before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May 1987, the revenue noticed that on money was charged by the assessee from its purchasers over and above the consideration disclosed in the agreements for sale. This was on the basis of statements of various employees of the assessee recorded during the course of the search. Though these statements were subsequently retracted by the concerned employees, in the course of proceedings under Section 132 (5) of the Act, the assessee itself came forward with a disclosure of ₹ 66 Lakhs 'onmoney', which was offered for taxation in the two assessment years, namely, 1987 88 and 1988 89, at ₹ 26 Lakhs and ₹ 40 Lakhs, respectively. This offer was purportedly on the basis that the assessee was following the project completion method of accounting and the project was said to be substantially completed during these two assessment years. 3. The Assessing officer did not accept the project completion method proposed by the assessee, and held, firstly, that on money should be assessed in every year in which the agreements for sale were made by the assessee. Secondly, he also did not accept the quantum of on money offered to taxation and held that on money shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e working of such on money for assessment years 1987 88 and 1988 89 ought to be at ₹ 8,16,000/and ₹ 2,02,000/respectively, and not at ₹ 26,00,000/and ₹ 40,00,000/as disclosed originally by the assessee. According to the assessee, the assessment at the latter mentioned amounts resulted into double addition of on money . The Tribunal allowed the revenue s appeals (rejecting the project completion method adopted by the CIT(A) for the assessment years 1985 86 and 1988 89) and dismissed the assessee s appeals (upholding both the quantum as well as the method of accounting the on money for assessment years 1986 87 and 1987 88). At the same time, whilst doing so, the Tribunal did not grant any relief to the assessee on his alternative plea requiring the assessment of on money for the assessment years 1987 88 and 1988 89 on the normative basis worked out for the project instead of actual on money disclosed by the assessee for the two particular years. 6. The assessee thereafter filed a miscellaneous application under Section 254 of the Act pointing out that there was an excess addition on account of on money . The basis of the assessee s plea was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as claimed during the hearing on the basis of the case eventually found by it, even if there is no specific ground of appeal raised before it in support of such relief. The assessee s case before the Tribunal was that it had received a total on money of ₹ 66,00,000/in the whole project which it offered to tax in the last two assessment years, i.e. Assessment Years 1987 88 and 1988 89, on the basis of project completion method. The department did not accept this case. The authorities below did not accept either the quantum of on money (i.e. ₹ 66,00,000/) or the method of accounting (i.e. project completion method) proposed by the assessee. Instead the authorities proceeded on a normative basis and concluded that the total on money received in the project worked out to ₹ 1,25,78,000/. They spread this on money over all eight years on the basis of percentage completion method, the figures for Assessment Years 1987 88 and 1988 89 coming to ₹ 8,16,000/and ₹ 2,02,000/respectively. (The assessments for Assessment Years 1981 82 to Assessment Years 1986 87, were on the basis of the respective normative figures for these years, which were accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 15,25,000 1984 85-86 81,64,000 27,32,000 14,25,000 1985 86-87 76,25,000 25,42,000 13,34,000 1986 87-88 24,47,000 8,16,000 4,28,000 1987 88-89 6,05,000 2,02,000 2,06,000 3,77,54,000 1,25,78,000 66,00,000 Obviously, this on money of ₹ 1,25,78,000/was as against the amount of ₹ 66,00,000/offered by the assessee itself and not over and above it. This is clear from the undisputed on money shown in each year in Column No. 5 of the table set out above. The column shows a total of ₹ 66,00,000/. Having rejected the assessee s case of a total quantum of ₹ 66,00,000/to be brought to tax in the last two years and instead worked out a normative figure of ₹ 1,25,78,000/for the whole length of the project, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n money of ₹ 66,00,000/offered in the returns for Assessment Years 1987 88 and 1988 89. 11. When an appeal from an assessment is brought before the Tribunal under Section 254(1) of the Act, all questions arising there-from, including questions which are incidental or consequential to such assessment, are open to be agitated before the Tribunal. The Tribunal is empowered to pass such orders thereon as it thinks fit . It is one thing to say that the Tribunal must confine itself to the subject matter of the appeal and not go beyond it, but quite another to say that whilst deciding such subject matter it cannot consider questions which are incidental to, or would follow as a consequence of, its determination. If the Tribunal rejects the assessee's case on a particular ground, and if such ground affords a certain relief to the assessee without his having to ever any new facts, such relief cannot be denied on the footing that the assessee never claimed it. If the assessee did not claim it, the Tribunal must grant it suo motu, as a matter of law, if the relief does follow as a legal incident. 12. Our Court in CIBA of India Ltd. Vs. CIT (1993) 202 ITR 0001 was concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the expression pass such orders thereon as it thinks fit in s. 254(1) of the Act. Thus, there is no restriction in regard to the nature of orders that the Tribunal can pass. The only restriction on the powers of the Tribunal can be inferred from the expression thereon which indicates that while passing orders it should confine itself to the subject-matter of the appeal and should not go beyond it. That is the only limitation on the power of the Tribunal. No other limitation is there. This view of ours gets full support from the decision of the Supreme Court in CIT vs. Lakshmi Textile Mills Ltd. (1967) 66 ITR 710 (SC), where dealing with the scope of the powers of the Tribunal under s. 33(4) of the Indian IT Act, 1922 [corresponding to s. 254(1) of the present Act] it was held : ... There is nothing in the IT 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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