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Jurisdiction of the Appellate Tribunal to allow raising additional plea on capital gains. Detailed Analysis: The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, regarding the jurisdiction of the Appellate Tribunal in allowing the assessee to raise an additional plea on the taxation of an amount as capital gains. The assessee, a private limited company, decided to sell its business as a going concern, resulting in a profit of Rs. 2,34,362. The Income-tax Officer assessed this amount as capital gains, which was disputed by the assessee. The matter went through various levels of appeal, culminating in an appeal before the Tribunal. The Tribunal allowed the assessee to raise an additional ground that the sum in question represented the value of goodwill and should not be taxable as capital gains. The department challenged this decision, arguing that the Tribunal exceeded its jurisdiction by allowing a new ground not raised before the Appellate Assistant Commissioner. The department relied on a decision of the Gujarat High Court, which was deemed inapplicable to the current case. The Tribunal's decision was based on the wide and extensive jurisdiction granted to it under section 254 of the Income-tax Act, 1961, similar to the powers under section 33(4) of the Indian Income-tax Act, 1922. The court cited the Supreme Court's ruling in Commissioner of Income-tax v. Mahalakshmi Textile Mills Ltd., emphasizing that the Tribunal has the authority to consider all questions, whether of law or facts, related to the assessment of the assessee, even if not raised before the departmental authorities. The court upheld the Tribunal's decision, stating that the assessee had the right to relief beyond the plea initially raised. Therefore, the court answered the question referred in the affirmative, in favor of the assessee, and awarded costs to the assessee, including advocate's fee. In conclusion, the judgment clarifies the Tribunal's broad jurisdiction to allow the raising of new grounds not previously raised before the lower authorities, emphasizing the principle that the right of the assessee to relief is not limited to the plea initially presented.
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