2018 (6) TMI 1631 - HC - Income Tax

Additional or fresh ground before Tribunal - permissibility of a claim for deduction made for the first time before the Appellate Tribunal without such claim having been made earlier - entitled to depreciation of the goodwill that had been acquired pursuant to the acquisition of a company or a unit or the like - HELD THAT - The assessee refers to a previous judgment NATIONAL THERMAL POWER COMPANY LIMITED VERSUS CIT 1996 (12) TMI 7 - SUPREME COURT for the proposition that if, as a result of any judicial decision given while the appeal is pending, it is found that a non-taxable item is taxed or a permissible deduction is denied, it would be open for such ground to be raised in course of the appeal and the matter to be adjudicated upon. Supreme Court found that in view of the wide authority conferred by Section 254 to the Appellate Tribunal, a point in such regard could be taken for the first time before the Appellate Tribunal if such point arose as a result of a judicial decision that affected the rights of the assessee during the pendency of the appeal. There does not appear to be any substantial question of law warranting reconsideration of the Appellate Tribunal s opinion.

Summary

Issues involved: Permissibility of a claim for deduction made for the first time before the Appellate Tribunal without being made earlier.

Analysis:
The High Court of Calcutta addressed the issue of whether a claim for deduction could be made for the first time before the Appellate Tribunal without being raised earlier. The assessee had urged a fresh ground before the Appellate Tribunal, claiming depreciation of goodwill acquired during the acquisition of a company. This claim was based on a Supreme Court judgment which recognized goodwill as an intangible asset subject to depreciation under Section 32(1) of the Income Tax Act, 1961. The assessee also cited a previous Supreme Court judgment stating that if a non-taxable item is taxed or a permissible deduction is denied due to a judicial decision during the appeal, such grounds could be raised and adjudicated upon during the appeal process. The Court noted that the Appellate Tribunal had wide authority under Section 254 of the Act to consider points raised for the first time if they arose due to a judicial decision affecting the assessee's rights during the appeal.

The Court concluded that there was no substantial question of law necessitating a review of the Appellate Tribunal's decision. Consequently, the matters ITAT No.439 of 2016 and GA No.70 of 2017 were disposed of, with no order as to costs.