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Issues Involved:
1. Admission of additional grounds by the learned CIT(A). 2. Merits of the issues raised in the additional grounds. Issue-wise Detailed Analysis: 1. Admission of Additional Grounds by the Learned CIT(A): The assessee, a Government of India undertaking, filed a return of income declaring a total income of Rs. 1,06,20,30,860, which was later assessed at Rs. 1,06,67,39,040 by the Assessing Officer. The main addition was Rs. 36.90 lakhs on account of accrued interest income. The assessee challenged this addition and sought to raise two additional grounds during appellate proceedings before the learned CIT(A): (i) Depreciation on operational buildings should be allowed treating the said building as plant. (ii) Exemption under section 10(29) of the Income-tax Act, 1961 for income from letting out godowns and warehouses. The learned CIT(A) refused to admit these additional grounds for the following reasons: 1. Material on Record: The CIT(A) noted that there was no classification of buildings as 'operational buildings' on record to support the claim for higher depreciation. Similarly, no separate income from letting godowns or warehouses was shown in the profit & loss account to support the exemption claim under section 10(29). 2. No Prior Claim: The assessee had not made these claims before the Income Tax Officer, nor was there any supporting material on record. 3. Timing of Claims: The issues could have been raised when the return was filed or when the assessment order was framed. The CIT(A) found no change in circumstances or law to justify raising these issues at the appellate stage. 4. No Grievance: The depreciation claimed at 10% was allowed, and no claim under section 10(29) was made initially, so no appeal could lie from the Assessing Officer's order. 5. Prior Knowledge: The assessee was aware of its entitlement to these claims from previous assessment years but did not raise them during the assessment proceedings for the current year, indicating a wilful omission. The learned counsel for the assessee argued that the issues were purely legal and all necessary facts were on record. The details of operational buildings and income from warehousing were available in the financial statements. The counsel also pointed out that similar claims had been allowed by the CIT(A) in previous years and upheld by the Tribunal. The learned DR countered that the CIT(A) was justified in refusing the additional grounds as the omission was wilful and unreasonable. Upon reviewing the submissions, the Tribunal found that the factual details required to decide the issues were indeed available on record. The Tribunal also accepted the assessee's explanation that it had waited for the appellate orders of previous years due to advice from the Ministry of Civil Aviation, which was reasonable given the public sector context. The Tribunal held that the CIT(A) was not justified in refusing to admit the additional grounds, emphasizing that the appellate authority has full jurisdiction to reverse or modify an order on any legal ground. The case was remanded to the CIT(A) with a direction to admit the additional grounds and decide them on merits. 2. Merits of the Issues Raised in the Additional Grounds: Given the Tribunal's decision to remand the case to the CIT(A) for admission of the additional grounds, it did not render any decision on the merits of the issues raised in the additional grounds. Conclusion: The appeal of the assessee was treated as allowed, with the case remanded to the learned CIT(A) to admit and decide the additional grounds on their merits.
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