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TMI Blog2022 (1) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... nal ground. The assessee can raise legal grounds at any stage of the appellate proceedings. In view of above facts and circumstances and in the interest of substantial justice, we find it appropriate to admit the grounds related to additions made under MAT provisions as additional ground and remit the issue back to the file of the Ld CIT(A) for adjudication afresh- Appeal filed by the assessee is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT vs Bengal Finance & Investments Pvt Ltd ITA No.337 of 2013 dated 10.2.2015. 7. The Learned CIT(A) has erred in confirming disallowance of sum of ₹ 75,87 317/a/s.14A on account of expenditure incurred in connection with investment for earning tax-free income, overlooking that Company has not incurred any direct or indirect expenditure to earn the said exempt income and when no expenses have been claimed in Computation of Income under Tonnage Tax provisions the question of disallowing expenses does not arise. (Refer Varun Shipping Co. Ltd vs. ACIT, 47 SOT 112 (Mumbai ITAT) Para 7 wherein it is held that when a Company is taxed "under the provisions of Tonnage Tax no addition can be made u/s.14A of the Act.) 8. The Learned CIT(A) has erred in not considering that while disallowing expenditure of ₹ 75,87,317/including interest w/s. 14A, expenditure can be disallowed if the same have been claimed by the Assessee in computing Taxable Income but in the case of Appellant Company the profit is computed under Tonnage Tax scheme on the loading capacity of the ship and not on freight earned or expenses incurred and when no expenses or interest have been claimed as dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook profit u/s 115JB of the Act (Minimum Alternative Tax or for short 'MAT') at ₹ 42,97,65,711/-. Under regular provisions, the assessing officer made following additions: a) transfer pricing addition of ₹ 11, 52, 47, 762/- b) section 14A disallowance of ₹ 75, 87, 317/- c) disallowance under section 94(7) of the act of ₹ 1, 13, 497/- 3. Under MAT provisions, the Assessing Officer made following two additions: a) profit on sale of vessel of ₹ 35, 75, 80, 351/- b) section 14A disallowance of ₹ 75, 87, 317/- 4. The Assessing Officer held that tax liability computed under the normal provisions of the Act being greater than tax liability computed under MAT, the taxability was determined under normal provisions of the Act. The assessee preferred appeal before the Ld. First Appellate Authority, without agitating the disallowances made under the 'MAT' provisions, as according to the assessee income was determined under the normal provisions of the Act. The Ld. First Appellate Authority vide order dated 9/1/2012 deleted additions of transfer pricing and disallowance under section 14A of the Act made under regular provisions of the Act. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made under MAT provisions of the Act consisting of profit on sale of vessels and disallowance under section 14A of the Act were not challenged before the Ld. First Appellate Authority in quantum proceedings, and therefore the Ld. Assessing Officer did not give any relief on said additions. The additions under MAT provisions have been raised for first time before us. The assessee in ground No. 2 (two) of the appeal has raised the issue that Ld. CIT(A) has not considered those ground as additional ground and not considered the decision of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd Vs CIT reported 229 ITR 383(SC). The Ld. Counsel accordingly prayed orally for admitting the grounds challenging the additions as additional grounds. The Ld. departmental representative did not object for the oral plea of the assessee for admitting those grounds as additional ground. 8. We find that Hon'ble Supreme Court in the case of National thermal Power Co Ltd vs CIT (supra) has held as under: "Under section 254 of the Income-tax Act, 1961, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed an appeal before the Tribunal. The inclusion of the said amount of ₹ 22,84,994 was not objected to even in the grounds of appeal as originally filed before the Tribunal. However, by a forwarding letter dated July 16, 1983, the following additional grounds were sought to be raised by the assessee: (1) that the sum of ₹ 22,84,994 deducted from "Statement of expenditure during construction" could not be included in the total income; (2) that on admission (erroneous), no income (the sum of ₹ 22,84,994) could be included in the total income; and (3) that the authorities below had erred and failed in their duty in not adjudicating the facts and evidence on record and mechanically included ₹ 22,84,994 in the total income. The assessee contended that it learnt that the interest earned before the setting up of business was not taxable as income and it went to reduce the capital cost of the plant and hence included the above three grounds in its grounds of appeal. However, the Tribunal declined to entertain the three additional grounds. The Tribunal directly referred to the Supreme Court the question whether where, on the facts found by the income-ta ..... 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