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TMI Blog2024 (9) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant facts are on record in respect of such item. It was observed that there is no reason to restrict the power of the Tribunal u/s 254 only to decide the grounds which arise from the order of Commissioner (Appeals). It was held that the Tribunal could not been prevented from considering the questions of law arising in assessment proceedings although not raised earlier. There was no good reason to justify curtailment of the power of the AAC in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO. Significantly, the Court observed that there may be several factors justifying the raising of new plea in an appeal and each case has to be considered on its own facts. However, the Appellate Authority was required to be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. In these circumstances, it was observed that what was expected was that the Appellant Authority exercises its discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reasons. The law as laid down in Jute Corporation of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue for which the respondent has not appealed against? 4.2 Whether on the facts and in the circumstances of the case, the Hon ble ITAT was right in law in holding that interest income earned on compulsory deposits of share application money or subscription money is a capital receipt even when the Respondent never made any such claim either in the course of assessment proceedings or in the course of appellate proceedings before CIT(A) and ITAT? 4.3 Whether on the facts and in the circumstances of the case, the Hon ble ITAT was right in law in directing the Assessing Officer to set-off the interest income earned on compulsory deposits of share application money or subscription money against the share issue expenses and other cost of capital assets. 2. It is seen from the record that the appeal had remained pending and was not admitted. At the outset, learned counsel for the respondent / assessee would submit that question number 4.1 and 4.2 is no more res integra considering the decision of the Supreme Court in National Thermal Power Company Ltd. Vs. Commissioner of Income Tax [1998] 97 Taxman 358 (SCC) . She has drawn our attention to the observations as made by the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. The Court further held that there was no good reason to justify curtailment of the power of the AAC in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the ITO. Significantly, the Court observed that there may be several factors justifying the raising of new plea in an appeal and each case has to be considered on its own facts. However, the Appellate Authority was required to be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. In these circumstances, it was observed that what was expected was that the Appellant Authority exercises its discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reasons. The law as laid down in Jute Corporation of India Ltd.(supra) was held to be applicable even in such situations arising before the Tribunal. The Supreme Court held that it would not be appropriate for the Tribunal to take narrow view of the matter. In considering the aforesaid clear po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding. It is in this context, the Supreme Court in dismissing the revenue s appeal held that the Share Application Money as was received was deposited in the Bank being a statutory mandatory requirement, hence the accrued interest was not liable to be taxed and was eligible for deduction against the public issue expenses. It was further observed that the issue of share relates to capital structure of the company and hence expenses incurred in connection with the issue of share are to be capitalized, for the reason that the purpose of such deposit is not to make some additional income but to comply with the statutory requirement, an interest accrued on such deposit is merely incidental. It was thus observed that the High Court was right in holding that the interest accrued on such deposit of money in the bank was liable to be set off against the public issue expenses. The following observations as made by the Court are required to be noted which reads thus: 12. The common rationale that is followed in all these judgment is that if there is any surplus money which is lying idle and it has been deposited in the bank for the purpose of earning interest then it is liable to be taxed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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