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TMI Blog1986 (4) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... n on 27th Jan., 1986; the ITO further requested for incorporation of the following ground: The ld. CIT(A) Rajasthan II, Jaipur has erred in deleting the two aforesaid additions made to the declared trading results of the assessee inspite of ITO s finding that g.p. rate declared this year being much lower than the earlier year and the defective and unreliable position of the assessee s accounts." 2. We have heard the representative of the parties at length in this appeal. So far as the additional grounds are concerned, their admission was strongly objected to by the representatives of the assessee and after thoroughly considering the over all facts and circumstances of the case, we are of the opinion that it will not be in the interest of justice to allow the same. A perusal of the grounds would clearly indicate that the original ground and the new grounds are totally different. In fact, they have absolutely no connection with each other. The D.R. has urged that under sub-s. (2) of s. 253, the Commissioner may, if he objects to any order passed by the AAC/CIT(A) direct the ITO to appeal to the appellate Tribunal against the order. In other words, what she intended to say was tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the ITO (Judicial) who had screened the order of the CIT(A) due to his having misread the earlier order of the Tribunal. She also pointed out that the Department had a very strong case in relation to the other grounds and the previous orders of the CIT were absolutely of no help to the assessee in the present case. Although we did not hear the additional ground at length, she appeared to have a quite good case on merits. However, what it comes to is that the Commissioner was wrongly advised not to take the other grounds. But a mistaken advice may be sufficient to debar a litigant from taking an additional ground. It needs to be pointed out that the additional ground relates to certain facts, namely, whether the provisions of s. 145(2) are applicable or whether the closing stocks of the assessee requires re-valuation. These are not pure questions of law. In the earlier year after some remand proceeding, the CIT(A) had held that s. 145(2) is into applicable. The Department had not preferred any second appeal against the order. The advise given by the scrutinising ITO in the present case was on the fact that the Department had accepted the correctness of the account in that yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rong decision, but then the Department has missed the bus so far as the applicability of s. 145(2) is concerned. Even regarding under valuation of the closing stock, admission of additional ground at this stage would disturb the subsequent year s results. After all there has to be a finality to litigation which cannot be reopened again, and again. The order under appeal was passed on 17th April, 1985. The appeal itself was filed on 14th June, 1985. A defect memo was issued on 24th June, 1985. The additional ground, however, was applied for in Jan., 1986. Why all this delay should be condoned. Apparently there is no reason and the grounds do not arise out of the original ground raised in this behalf. No affidavit of any IT authority point out the reasons for the omission to take the grounds in the first instance and justifying the Department s having taken this additional ground at later stage has been filed upto the hearing of this appeal. In this behalf we may also refer to some more authorities, from the General civil law, namely, AIR 1962 SC 361 in the case of Ramlal Ors., AIR 1964 (SC) 154 in the case of Punjab State vs. Gopal singh etc., AIR 1968 (P H) 352 and AIR 1977 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person so represented or by the person so represented to the firm, shall be taken into account for the purposes of this clause. Expl. 3: where an individual is a partner in a firm otherwise than as partner in a representative capacity, interest paid by the firm to such individual shall not be taken into account for the purposes of this clause if such interest is received by him on behalf or for the benefit of any other person". Although technically this provision has been inserted w.e.f. 1st April, 1985, it is obvious that these are clarification by way of explanation and they were with a view to clarify certain doubts created during the interpretation. In fact, in view of the highly controversial position, this Bench has already been taking the view that the best course under these circumstances would be to decide all the pending cases in accordance with the clarification made by these explanations. The departmental representative however, wanted us to take a different view in view of the fact that according to her the balance of authorities before insertion of this explanation was to the contrary. May be that the number of case decided in favour of the Department was sligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irit of Explns. 2 and 3 introduced by the Taxation Laws (Amendment) Bill, 1984 should be followed with respect to the preceding assessment years also in order to avoid unnecessary litigation. It cannot be gain said that the legislature was fully aware of the conflict of judicial opinion in this matter among the various High Courts in the country and the present amendment to s. 40(b) through Explns. 2 and 3 is brought about to set at rest the controversy. We see no reasons to hold that the principle introduced statutorily by Explns. 2 and 3 following the decisions of some High Court are good only from the assessment year 1985-86 and ceased to be so for the preceding assessment years. In our opinion, Explns. 2 and 3 are merely classificatory in character and must therefore, govern the assessments prior to the asst. yr. 1985-86". This Bench has already been acting on this very premise and holding the allowance or disallowance of the interest to be justified in accordance with the Explns. above referred to. Now that one of the High Court has endorsed this view. There is apparently no reason for us to take a different view on the subject. We accordingly reject the ground of appeal rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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