TMI Blog1981 (1) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee could not claim the deductions for the preceding year, and on mercantile system in the year under consideration. He was of the view that as in the past the assessee was entitled to the deduction of the bonus paid in cash for the preceding year. He, therefore, directed the ITO to allow the cash payment of bonus of Rs. 1,00,004 but sustained the disallowance of the provision for bonus of Rs. 1,19,944. There was a further appeal to the Tribunal. It was submitted on behalf of the assessee that it had been paying bonus on cash system in the past and that in the year under consideration it changed the cash system into mercantile system, as it was considered advisable to follow the mercantile system also in respect of bonus. He, therefore, urged that the assessee was entitled to the deduction of the provision for bonus of the year under consideration and also for the payment of bonus in cash for the preceding year, as that amount had actually been paid, as an expenditure in the year under consideration. He further submitted that in the subsequent years the assessee consistently followed the method of mercantile system in respect of bonus. The departmental representative highligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of accounting for all items, except the payment of bonus which was entered in the books of accounts on cash basis. In the opinion of the AAC, the appellant would not be allowed to have two debits in respect of the same item. Thus, there was an order for deleting Rs. 1,00,004 as an expenditure of the year on cash basis. As stated earlier, there was a further appeal before the Tribunal by the assessee. It is contended by Mr. Banerjee that the Department did not choose either to file an appeal or to file any cross-appeal against the order passed by the AAC and the claim before the Income-tax Appellate Tribunal was whether the sum of Rs. 1,19,944 should be allowed as deduction under the I.T. Act, 1961. According to Mr. Banerjee, while hearing the said appeal, the Income-tax Appellate Tribunal chose to nullify the deduction of Rs. 1,00,004, which had already been allowed by the AAC, which in fact was not disputed before the Income-tax Appellate Tribunal at all. Now, Mr. Banerjee contends that the Tribunal was not right in disallowing the sum of Rs. 1,00,004 which had already been allowed by the AAC, which was not the subject-matter of appeal. It would transpire from the applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds of appeal unless, with leave, the subject-matter was expanded or increased by adding a new ground after the leave had been given by the Tribunal. Mr. Banerjee next cites the decision in the case of Kanan Devan Hills Produce Co. Ltd. v. CWT[1968] 67 ITR 823 (Cal). In this case also, the expression " thereon" has similarly been explained and the power of the Tribunal, according to their Lordships, is confined to deal with the subject-matter of the appeal and the subject-matter of the appeal is constituted by the grounds of appeal preferred by the appellant. Last of all, reference is made to the decision of the Supreme Court in the case of State of Kerala v. Vijaya Stores [1979] 116 ITR 15; [1978] 42 ITR 418. The Supreme Court at p. 19 of the report enunciated the law on the point as follows: " Apart from statute, it is elementary that if a party appeals, he is the party who comes before the Appellate Tribunal to redress grievance, alleged by him. If the other side has any grievance, he has right to file a cross-appeal or cross-objections. But if no such thing is done, the other party, in law, is deemed to be satisfied with the decision. He is, of course, entitled to sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with the express provisions of the Act or its scheme. Lastly, Mr. Bagchi refers to the decision of the Delhi High Court in the case of CIT v. Edward Keventer (Successors) P. Ltd. [1980] 123 ITR 200. In that case it is observed that the subject-matter of the appeal should be understood not in narrow and unrealistic manner but should be so comprehended as to encompass the entire controversy between the parties which is sought to be got adjudicated upon by the Tribunal. It is further observed that in a case where there are inter-connected grounds of appeal and they have an impact on the same subject-matter, the scope of the appeal should be broadly considered in the correct perspective. While the appellant should not be made to suffer and be deprived of the benefit given to him by the lower authority where the other side has not appealed, equally the procedural rules should not be interpreted or applied so as to confer on the appellant a relief to which he cannot be entitled if the point decided in his favour on the same matter by the lower court are also considered as requested by the respondent. The subject-matter of appeal before the Tribunal was whether the bonus which was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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