TMI Blog1983 (7) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of the department at the time of hearing. The actual increase in the liability whether on account of mercantile system of accounts or otherwise had never been pleaded, examined or considered for allowance by any of the lower authorities. Therefore, the Tribunal could not have allowed this claim at this stage and the order of the Tribunal should be rectified. 2. The application has been strongly contested by raising the following pleas : " 1. That the application is unauthorised. 2. That the content of the application is untrue. The claim in question was duly made before the Commissioner of Income-tax (Appeals) : vide copy enclosed. 3. That according to settled law the said Commissioner, not having dealt with the said grounds raised before him, must be deemed to have decided the same against the appellant. 4. That in the circumstances the Tribunal was perfectly justified in allowing the point to be argued before it. 5. That, without prejudice, the matter does not fall within the purview of section 254(2). " A rejoinder was filed to this reply wherein detailed arguments were also put forward in support of the allegations made in this application and to rebut the ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttorney in each case and have often been appearing in different cases before different Benches without any distinction. Since all of them are authorised not only to attend but to appear, plead and act on behalf of the income-tax authorities, the application signed by Shri N.K. Nayak cannot be said to be unauthorised. 4. Coming to the merits of the application, we find that the Tribunal had directed the allowance of depreciation and development rebate on a higher amount on the ground that as a result of devaluation, the assessee's liability had increased by Rs. 23,61,713. Though the actual payment may have to be made later, as per chart furnished by the representative of the assessee at pages 4, 5 and 6 of the paper book, the assessee's liability had gone up during the current year and since the assessee was having mercantile system of accounting, obviously the entire increase would go towards increase in the capital cost incurred by the assessee and, consequently, the assessee was entitled to claim depreciation, etc., on this increased cost. Since in this application, the reply and the rejoinders, various allegations alleging mistakes of fact and law committed by the Tribunal had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vind Mills Ltd. v. CIT [1978] 112 ITR 64. The appellant, therefore, respectfully requests that the learned ITO may be directed to allow depreciation and development rebate, accordingly. " 6. The discussion by the Commissioner (Appeals) is in para 7 which shows that the amplified ground for claiming the depreciation on the higher amount was not at all considered by him. Thereafter, the assessee put in an application under section 154 of the Act before the Commissioner (Appeals) alleging that through oversight the above additional ground of appeal taken at the time of hearing had not been taken into consideration while passing the order. The application remained pending before the Commissioner and on 20-1-1981, he asked the assessee's representative as to when the additional grounds in question had been filed. The case was fixed for hearing on the next day when the assessee's representative contended that he was referring to ground No. 7, which we have already quoted in extenso above. Thereafter, the Commissioner did not pass an order but the assessee raised the following grounds of appeal before the Tribunal in this behalf : " 5. For that the learned IAC (Assessment) and the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreover, none of the authorities below had any occasion to consider whether the conditions prescribed for allowance of development rebate had been fulfilled by the assessee so as to enable it to claim the allowance for development rebate on the enhanced cost. 9. The following points arise for our determination : " 1. Whether the assessee could be permitted to take up this plea in the present circumstances ? 2. Once the Tribunal has allowed the assessee to take up the plea and also allowed the same on merits, whether now the order can be rectified and to what extent can the rectification extend to ? " We proceed on to discuss these one by one as under : 10. So far as the first question is concerned, reliance was placed by the representative of the department upon the Supreme Court judgment in Addl. CIT v. Gurjargravures (P.) Ltd. [1978] 111 ITR 1 wherein one of the grounds of appeal raised by the respondent in an appeal before the AAC was that the ITO had erred in not giving the respondent the benefit of section 84 of the Act. No such claim had been made before the ITO when he completed the assessment, nor was there material on record supporting such a claim. In subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to raise that question in second appeal before it. Reference was also placed upon another judgment of the Madhya Pradesh High Court in CIT v. Nirbheram Daluram [1981] 127 ITR 491 in which the Tribunal had held that the AAC had no jurisdiction to add an income from undisclosed sources when these sources were not considered by the ITO and this conclusion was upheld by their Lordships. Lastly, reference was made to R.L. Rajgharia v. ITO [1977] 107 ITR 347 (Cal.), wherein the controversy before the ITO and the AAC was as to whether the loss of Rs. 23,100 should be treated as speculative loss or business loss. On a second appeal, the Tribunal remanded the matter to the AAC with a direction to find out whether the loss was capital or not. It was held that the Tribunal had exceeded its jurisdiction and, consequently, the order of the Tribunal was quashed. 13. On behalf of the assessee it was argued that since the claim for depreciation on the higher amount had been put in before the Commissioner, even though he had not considered it, it should be deemed to have been considered and decided against him and, therefore, the Tribunal was entitled to go into this matter even though t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Cal.) that the Tribunal has only a power to rectify any mistake in its order provided the mistake is apparent from the record. It has no power to review its order. Therefore, by refusing to allow the assessee to make the claim for depreciation on the higher amount we would, in effect, be reviewing the order passed by the Tribunal earlier which we are not expected to do. If the Tribunal has allowed the assessee to raise a plea which was contrary to the balance of authority, the proper remedy for the department now is to get a verdict from the Hon'ble High Court. 16. We are, however, of the opinion that some amendment in the order is called for. One obvious mistake that the Tribunal has done is that relying upon a chart furnished by the assessee showing the increase in its liability as a result of devaluation copy of which is at pages 4, 5 and 6 of the paper book, it has observed that the entire increase should be considered for the purpose of assessee's claim, for depreciation and impliedly for development rebate also. As pointed out above, this chart and the papers referred to by the Tribunal were not before the authorities below. Therefore, the Tribunal certainly committed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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