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Issues Involved:
1. Whether the Tribunal exceeded its power under section 33(4) of the Indian Income-tax Act in disallowing the claim of the petitioner to the extent of Rs. 1,13,000 on the ground that the said amount was not paid by the petitioner. 2. Whether there was any evidence on record to support the finding of the Tribunal that the petitioner had paid to Milkhiram Rs. 1,87,000 and not Rs. 3,00,000. Issue-wise Detailed Analysis: Issue 1: Tribunal's Jurisdiction Under Section 33(4) The primary issue revolves around whether the Tribunal exceeded its jurisdiction under section 33(4) of the Indian Income-tax Act by disallowing the claim of the petitioner for Rs. 1,13,000. The Tribunal had initially accepted that the payment was not of a capital nature but a revenue expenditure, allowing Rs. 1,87,000 and not Rs. 3,00,000 as claimed by the petitioner. The petitioner contended that the Tribunal acted without jurisdiction in suo motu examining the quantum of payment, as this was not disputed by the income-tax authorities. The Tribunal's powers under section 33(4) are broad but not absolute, confined to the subject matter of the appeal, which includes grounds raised by the appellant, grounds allowed by the Tribunal, and contentions by the respondent supporting the order of the Appellate Assistant Commissioner. The Tribunal's examination of the quantum of payment was not raised by the income-tax authorities, nor was it a subject matter of the appeal. The Tribunal was directed to submit a statement of the case on two questions, and it was clear that the Tribunal had no jurisdiction to suo motu deal with the quantum of payment. The Tribunal's action in this regard was found to be in error, and the first question was answered in the affirmative, indicating that the Tribunal exceeded its jurisdiction. Issue 2: Evidence Supporting the Tribunal's Finding The second issue was whether there was any evidence to support the Tribunal's finding that the petitioner had paid Rs. 1,87,000 to Milkhiram and not Rs. 3,00,000. However, since the first question was answered in the affirmative, indicating that the Tribunal exceeded its jurisdiction, it was deemed unnecessary to answer the second question for the disposal of the reference in favor of the assessee. Conclusion The Tribunal exceeded its jurisdiction under section 33(4) by disallowing the claim of the petitioner for Rs. 1,13,000, as the quantum of payment was not a subject matter of the appeal nor disputed by the income-tax authorities. Consequently, the Tribunal's action was found to be in error, and the first question was answered in the affirmative, making it unnecessary to address the second question. The Commissioner was directed to pay the costs of the assessee.
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