This is appeal by assessee, company, being public sector undertaking, incorporated on 7th Oct., 1975. object of assessee- company is developing of thermal power in all its aspects, including installation, generation, operation and maintenance of thermal power and associated transmission networks. assessee has been depositing its funds, not immediately required on short-term deposits, with banks. interest received on such deposits during previous year relevant to asst. yr. 1978-79, i.e., year under appeal, amounts to Rs. 22,84,994. This amount was offered for assessment and assessment has been completed under s. 143(3) of IT Act, 1961 ('the Act ), on 29th Dec., 1980 on that basis. appeal was filed against order of assessment. number of additions/disallowances were challenged. inclusion of aforesaid amount of Rs. 22,84,960 was neither challenged nor was considered by CIT (A), who considered and decided all grounds taken by assessee vide his appellate order, dt. 14th Jan., 1982. Aggrieved by aforesaid order of CIT (A) assessee filed appeal in Tribunal's office on 6th March, 1982, in which as many as 10 grounds of appeal have been taken. inclusion of Rs. 22,84,960, being interest from short-term deposits with banks, has not been objected to in grounds originally taken. However, by means of forwarding letter dt. 16th July, 1983, which seems to have been received in Tribunal's office on 18th July, 1983, following additional grounds were raised: sum of Rs. 22,84,994 deducted from 'Statement of expenditure during construction' cannot be included in total income. It is contended that on admission (erroneous), no income (the sum of Rs. 22,84,994) can be included in total income. authorities below have erred and failed in their duty in not adjudicating facts and evidence on record and mechanically including Rs. 22,84,994 in total income. appeal was heard on 1st Sept., 1983, 10th Jan., 1984 and on 3rd April, 1984. Being of view that issue regarding admission of ground taken for first time before Tribunal, and that too by way of additional ground long after filing of appeal, was intricate and important, Bench put forward proposal for constitution of Special Bench to hear and dispose of appeal. proposal having been accepted, appeal has come up before Bench constituted under s. 255(3) of Act for hearing. It is fairly admitted by Ganesan, learned counsel for assessee, that apparently conflicting and contrary views have been taken by different High Courts on issue. It is stated that Madras High Court has, in cases of CIT vs. Indian Express (Madurai) (P) Ltd. (1983) 33 CTR (Mad) 314: (1983) 140 ITR 705 (Mad) and CIT vs. Sri Rajagopal Transports (P) Ltd. (1983) 36 CTR (Mad) 5: (1983) 144 ITR 573 (Mad) held that ground can be raised any time including before Tribunal for first time. similar view, it is stated, has been taken by Punjab & Haryana High Court in case of Atlas Cycle Industries Ltd. vs. CIT (1981) 21 CTR (P&H) 109: (1982) 133 ITR 231 (P&H). In another decision Delhi High Court in case of CIT vs. Bharat General Reinsurance Co. Ltd. (1971) 81 ITR 303 (Del), it is stated, assessee had wrongly included some income in its return for particular year. It was held that this fact by itself cannot confer jurisdiction on Department to tax that income in that year, if legally such income does not pertain to that year. There is no estoppel and assessee can challenge validity of taxing income, which it had itself wrongly included in its return. submission, thus, is that just as assessee can realise before ITO from position it had wrongly taken while filing return, it can do so before AAC, before whom entire assessment is open. So long as he does not travel outside matters considered and determined by ITO AAC can correct any decision of ITO in course of assessment even if assessee was satisfied with it and had not challenged it before ITO. According to Ganesan, above discussion indicates that after order of AAC order of assessment gets merged in that of AAC so much so that item of income included by ITO, which was not challenged by assessee before AAC, becomes part of order of AAC. Reliance for this purpose has been kly placed on Special Bench orders of Tribunal in cases of Dwarkadas & Co. (P) Ltd. vs. ITO (1982) 1 ITD 303 (Bom.) and Shree Arbuda Mills Ltd. vs. ITO (1983) 3 SOT 311 (Ahd.), where it stated to have been held that order of assessment merges in that of AAC not only with regard to issues AAC has actually considered and dealt with in his order, but also regarding issues he had jurisdiction to interfere but has not interfered in his discretion. In this manner, it is contended that AAC should be deemed to have confirmed inclusion of above interest income. Once that submission is accepted, he contended that assessee could have taken ground against above inclusion before Tribunal originally. It could also take such ground in appropriate cases by seeking permission to take additional grounds. It is stated that assessee's business has, admittedly, not yet been set up. interest on short-term deposits was taken to be taxable in absence of any decision on issue. That is why assessee itself included above interest as income in its return and did not challenge it before ITO or before CIT (A). It was only when assessee came to know of Special Bench orders of Tribunal in cases of Arasan Aluminium Industries (P) Ltd. vs. ITO (1982) 1 ITD 10 (Mad.) and Nagarjuna Steels Ltd. vs. ITO (1983) 3 ITD 796 (Hyd.), it realised that interest income having been received before commencement or even set up of its business, it was not taxable as such but it would reduce capital cost of its plant only. Soon thereafter assessee has raised grounds as additional grounds. Vaish, who appeared as intervener, placed reliance on Allahabad High Court's decision in case of CIT vs. Hindustan Commercial Bank Ltd. (1980) 122 ITR 645 (All) and Bombay High Court's decision in case of CWT vs. N.A. Narielwalla (1980) 17 CTR (Bom) 6: (1980) 126 ITR 344 (Bom). He argued that subject-matter of appeal should not be understood in restricted manner. Jurisdiction of AAC is coterminous with that of ITO, as held by Supreme Court in case of CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC). As to nature of tax proceedings, Vaish kly relied on Madras High Court's decision in cases of Indian Express (Madurai) (P) Ltd. (supra) and Sri Rajagopal Transports (P) Ltd. (supra) Referring then to Supreme Court's decision in case of Mahendra Mills Ltd. vs. P.B. Desai, AAC 1975 CTR (SC) 82: (1975) 99 ITR 135 (SC), it is stated that records mean entire income-tax records of assessee and not record of year. Thus, income-tax records of assessee and not record of year. Thus, according to him, necessary material for deciding issue raised by way of additional grounds is available on records. In this context, it is pointed out that in proceedings for subsequent assessment years, assessee had challenged inclusion of such receipts in its total income and that not only IAC and CIT (A) but Tribunal has also considered and decided question of inclusion on merits. In order to show that business, for which assessee-company has been incorporated has not commenced up to end of previous year, Vaish has invited our attention to assessment orders for asst. yrs. 1977-78 and 1978-79 to show that interest income was taxed as income from other sources and no expenses were claimed or allowed in either of two assessment years. Reference in this context was made at p. 157 of paper book and pp. 21, 24, 25, 27 and 29 of assessee's printed balance sheet. Kapila, Senior Departmental Representative, has, on other hand, kly relied on Delhi High Court's decision in case of CIT vs. Anand Prasad (1981) 128 ITR 388 (Del), which according to him squarely covers issue against admission of new ground for first time before Tribunal. Further, Full Bench of Gujarat High Court, it is stated, has in case of CIT vs. Cellulose Products of India Ltd. (1984) 19 TAXMAN 278 after considering Madras and Punjab & Haryana High Court decisions relied upon by assessee, held that altogether new ground cannot be taken before Tribunal for first time. similar view is stated to have been taken by Bombay High Court in case of Ugar Sugar Works Ltd. vs. CIT (1982) 27 CTR (Bom) 174: (1983) 141 ITR 326 (Bom). In this context, Kapila urged that Madras High Court decisions are full of fallacies. Court, according to him, failed to appreciate difference between such expressions as 'subject-matter of assessment', 'subject-matter of appeal before first appellate authority' and 'subject-matter of ground', which expressions have well defined and distinct meanings. According to him, there is difference between words 'jurisdiction' and 'power'. While 'jurisdiction' is limited, 'powers' of appellate authorities within jurisdiction are unlimited. In other words, contention is that if meaning of observations of Supreme Court in three cases CIT vs. S. Nelliappan (1967) 66 ITR 722 (SC), CIT vs. Mahalakshmi Textile Mills Ltd. (1967) 66 ITR 710 (SC) and Hukumchand Mills Ltd.vs. CIT (1967) 63 ITR 232 (SC) is what Madras High Court has understood, Supreme Court would never have held in its latter decision in case of Addl. CIT vs. Gurjargravures (P) Ltd. 1978 CTR (SC) 1: (1978) 111 ITR 1 (SC) that AAC was justified in refusing assessee to urge issue before him, about which there was no dispute before ITO. Reference in this context is also made to following observations of Supreme Court in case of CIT vs. Manick Sons (1969) 74 ITR 1 (SC): " power conferred by s. 33(4) of IT Act, 1922, is wide, but it is still judicial power which must be exercised in respect of matters that arise in appeal and according to law. Tribunal in deciding appeal before it must deal with questions of law and fact which arise out of order of assessment made by ITO and order of AAC. It cannot assume powers which are inconsistent with express provisions of Act or its scheme. " Support is also derived from observations of Delhi High Court in case of CIT vs. Edward Keventer (Successors) (P) Ltd. (1980) 123 ITR 200 (Del) at pp. 206 and 209 as also in case of Rohtak & Hissar Districts Electric Supply Co. (P) Ltd. vs. CIT (1981) 128 ITR 52 (Del). Again, according to Departmental Representative, necessary facts for decision on issue are not on records of assessment for year and on this ground also, prayer for admission of new grounds requires to be rejected. In reply, Ganesan stated that Delhi High Court in case of Edward Keventer (Successors) (P) Ltd. (supra) was concerned with rights of respondent to take additional grounds. In terms of Supreme Court decision in case of Mrs. Khorshed Shapoor Chenai vs. ACED (1980) 14 CTR (SC) 356: (1980) 122 ITR 21 (SC), inclusion of interest receipts as income, even though admitted by assessee, has to be taken as decision by ITO. Before proceeding to consider rival contentions, it is desirable to mention that Ganesan, learned counsel for assessee, objected to hearing of this appeal by Special Bench as constituted. He stated that on merits, learned Accountant Member has quite recently, i.e., on 28th Feb., 1984, taken view contrary to two Special Bench orders of Tribunal in cases of Arasan Aluminium Industries (P) Ltd. (supra) and Nagarjuna Steels Ltd. (supra) in assessee's own case for asst. yrs. 1979-80 and 1980-81, for which appeals somehow came up first. Assuming that Special Bench holds that assessee is entitled to challenge inclusion of Rs. 22,84,994 being interest on short-term deposits with banks in its income, learned member may find it difficult to take contrary view. preliminary objection is stated merely to be rejected. Firstly, when member sits on Special Bench, he is supposed to sit with open mind. No embarrassment is caused to him in taking one view or other. learned counsel is, perhaps, not aware and at least one of other two members of Special Bench has followed view taken by two Special Benches. That apart, in case we hold that assessee is entitled to challenge inclusion of above sum in its total income, we feel like not deciding issue on merits ourselves and would prefer to send same back to CIT (A) as he had, admittedly, no occasion to consider such ground. As regards broad facts, there is no dispute. assessee-company is Government of India Undertaking, incorporated with main object of development of thermal power in all its aspects including construction, generation, operation and maintenance of thermal power stations and associated transmission network. business as such has not yet commenced. Construction and erection is going on. Money is withdrawn from Central Government against capital expenditure to be incurred from time to time. When money so withdrawn cannot be utilised for construction or erection work immediately, amounts are deposited with banks as short-term deposits. Interest of Rs. 22,84,994 has been earned during previous year on such short-term deposits. For purpose of facilitating its construction and erection work, assessee has purchased heavy cranes and other machines, which it allows its contractors to make use of on rent. assessee, thus, has derived some income by way of hire charges as well, but there is no dispute in these proceedings about those receipts. assessee has, inter alia, included interest received as part of its income in return. assessment is completed by IAC on that basis. No income in return. assessment is completed by IAC on that basis. No dispute is raised about its inclusion in total income before CIT (A), who has also not considered it on his own. Inclusion has not been disputed even before Tribunal in appeal memo filed originally. It appears that assessee came to learn from two Special Bench orders of Tribunal in cases reported in Arasan Aluminium Industries (P) Ltd.'s case (supra) and Nagarjuna Steels Ltd.'s case (supra) and Delhi High Court decision in case of Addl. CIT vs. Indian Drugs & Pharmaceuticals Ltd. (1983) 141 ITR 134 (Del) that receipts from sources which were not independent but which were inextricably linked with process of setting up business, do not constitute income liable to tax. additional ground has been raised sometime thereafter on basis thereof. In this view of matter, we are inclined to condone delay in raising additional grounds on as late as July 1983 and proceed to consider legal issue, viz., whether assessee is entitled to raise such ground for first time before Tribunal. Answer to controversy will depend upon one's understanding of Supreme Court decisions in cases of Hukumchand Mills Ltd. (supra), Mahalakshmi Textile Mills Ltd. (supra) and S. Nelliappan (supra) and in particular observations quoted hereunder: " ...The powers of Tribunal in dealing with appeals are expressed in s. 33(4) of Act in widest possible terms. Sec. 33(3) of Act states that 'An appeal to Tribunal shall be in prescribed form and shall be verified in prescribed manner...' Sec. 33(4) reads as follows: '33(4). Tribunal may, after giving both parties to appeal opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to assessee and to Commissioner.' word 'thereon', of course, restricts jurisdiction of Tribunal to subject-matter of appeal. words 'pass such orders as Tribunal thinks fit' include all powers (except possibly power of enhancement) which are conferred upon AAC by s. 31 of Act. Consequently, Tribunal has authority under this section to direct AAC or ITO to hold further enquiry and dispose of case on basis of such enquiry.... " " ...Under sub-s. (4) of s. 33 of Indian IT Act, 1922, Tribunal is competent to pass such orders on appeal 'as it thinks fit'. There is nothing in IT Act which restricts Tribunal to determination of questions raised before Departmental authorities. All questions whether of law or of fact which relate to assessment of assessee may be raised before Tribunal: If for reasons recorded by Departmental authorities in rejecting contention raised by assessee, grant of relief to him on another ground is justified, it would be open to Departmental authorities and Tribunal, and indeed they would be under duty, to grant that relief. right of assessee to relief is not restricted to plea raised by him .. subject-matter of appeal in present case was right of assessee to claim allowance for Rs. 93,215. Whether allowance was admissible under one head or other of sub-s. (2) of s. 10, subject-matter for appeal remained same, and Tribunal having held that expenditure incurred fell within terms of s. 10(2)(v), though not under s. 10(2)(vib), it had jurisdiction to admit that expenditure as permissible allowance in computation of taxable income of assessee. " " In hearing appeal Tribunal may give leave to assessee to urge grounds not set forth in memorandum of appeal, and in deciding appeal Tribunal is not restricted to grounds set forth in memorandum of appeal or taken by leave of Tribunal. Tribunal was, therefore, competent to allow assessees to raise contention relating to cash credits which was not made subject-matter of ground in memorandum of appeal. It cannot be said that in accepting contention of assessees that cash credits represented income from business withheld from books, Tribunal made out new case inconsistent with assessee's own plea. In any event, Tribunal is not precluded from adjusting tax liability of assessee in light of its findings merely because findings are inconsistent with case pleaded by assessees. " These observations have been understood by Madras High Court in its decisions in Indian Express (Madurai) (P) Ltd.'s (supra) case and Sri Rajagopal Transports (P) Ltd.'s case (supra) to mean that altogether new ground can be urged for first time before Tribunal. It was submitted before Madras High Court by standing counsel for Revenue that observations of Supreme Court in Mahalakshmi Textile Mills Ltd.'s case (supra), S. Nelliappan's case (supra) and Hukumchand Mills Ltd.'s case (supra) should not be read in isolation. If read in context of facts, real ratio decidendi in all three decisions will be found to be that new grounds can be taken before Tribunal pertaining to subject-matter of appeal before Tribunal only. In particular, Rangaswamy laid emphasis on latter part of passage as containing real ratio of decision in Mahalakshmi Textile Mills Ltd.'s case (supra) at p. 713 and small passage in case of Hukumchand Mills Ltd.'s case (supra) at p. 237. Court in way agreed with standing counsel's submissions. However, it was of view that no distinction can be made between ratio on one hand and dicta on other in Supreme Court decision. Where particular determination by Supreme Court not only disposes of case but also decides particular law, actual ratio in case is precedent which is binding on all Courts in land including High Courts. Equally binding are dictas of Supreme Court, even though such dictas cannot be strictly regarded as forming ratio of Court's decision in given case. Court has, it may be stated, dwelt upon primary purpose of Act and role of appellate authorities, including Tribunal. It has taken view that all authorities under Act, including Tribunal, are empowered to and have to go into all questions necessary for adjustment of taxpayers liability irrespective of fact whether particular ground was urged or not before ITO or first appellate authority. We may consider for present that theoretical exposition of purpose of Act and role of various authorities in administration of tax laws is correct. We are, however, of view that decision has to depend primarily upon ratio of abovesaid three Supreme Court decisions in light of Madras High Court and Punjab & Haryana High Court on one side and Gujarat, Bombay and Delhi High Courts on other. It is significant to mention that Delhi High Court decision in particular is binding on us in this case. It has been laid down by Delhi High Court in case of Anand Prasad that: " In cases of both assessee and Department right of appeal under s. 33 of Indian IT Act, 1922, is same. There must be objection to order passed by AAC. If point has not been taken before AAC and is not mentioned in order of AAC, then CIT cannot object nor can assessee object. word 'objects' must signify that there is some error or mistake or defect in AAC's order. very nature of appeal is to bring to light errors or defects in decision under appeal. There can be no error or defect on any point which is not urged, and, hence, normally new point is not to be permitted to be raised. " facts in above case, it may be stated, were better for Revenue. issue involved was whether sale of plots by assessee constituted business or surplus was liable to be assessed as capital gains. Since ITO had held that it constituted business and assessed profits therefrom as business income and since it had not taken alternative plea before AAC that in alternative capital gains arose from sale of plot of land, Tribunal refused to permit Department to raise alternative contention before it for first time. This order has been confirmed by High Court. It is evident that issue involved in case was not altogether independent. Yet their Lordships held that alternative contention involved some other amount chargeable to income-tax as capital gains and was completely different point. Tribunal's order holding that such point could not and should not be permitted to be raised before it was upheld. Similar view has been indirectly taken by Delhi High Court in case of Edward Keventer (Successors) (P) Ltd (supra). It was held that subject-matter of appeal should be understood not in narrow and unrealistic manner but should be so comprehended as to encompass entire controversy between parties, which is sought to be got adjudicated upon by Tribunal. However, when one goes through facts, it is found that all these observations have been made in context of inter-connected grounds of appeal having impact on subject-matter of dispute. It would have been in order for us to say that Delhi High Court decision is binding on this Bench order for us to say that Delhi High Court decision is binding on this Bench and following said decision respectfully, we hold that altogether new grounds taken by assessee for first time before Tribunal cannot be entertained. Besides, observations of Supreme Court, quoted above, have also been understood to mean differently by Bombay High Court in Ugar Sugar Works Ltd.'s case (supra) and Full Bench of Gujarat High Court in case of Cellulose Products of India Ltd. (supra). It is pertinent to mention that Full Bench of Gujarat High Court has, particularly, taken note of above two Madras High Court decisions and Punjab & Haryana High Court decision in case of Atlas Cycle Industries Ltd. (supra), where contrary view was taken. Andhra Pradesh High Court decision in CIT vs. Gangappa Cables Ltd. (1979) 116 ITR 778 (AP), kly relied upon by counsel for assessee before us, has also been considered. Full Bench has analysed scope of proceedings before assessing officer, first appellate authority and Tribunal in following words: " On basis of several Supreme Court pronouncements, well settled legal position is that though entire range of assessment made by ITO is open to challenge in appeal filed by assessee, assessee may confine his objections to only some of decisions taken by ITO, expressly or impliedly. subject-matter of appeal may be limited to some part or other of assessment order to which assessee has taken objection. Therefore, he would be seeking relief in respect of matter objected to. scope of relief sought by assessee in appeal determines subject- matter of appeal that may have to be inferred since assessee may not indicate in specific term scope of relief sought by him. This has often to be inferred from range of attack made on assessment order in grounds of appeal. contours of challenge, as so reflected, would determine scope of subject-matter of appeal. In regard to such subject-matter, if he chooses to make challenge on grounds other than raised by him, it could be open to him to seek to urge such grounds. Indeed, it may be possible that he seeks and obtains relief sought by him in appeal by different approach, approach not reflected in his appeal memorandum. Whether he should be allowed to make that approach, is not matter of jurisdiction. It is matter of discretion which should be understood as distinct from jurisdiction. It is open, in exercise of discretion, to appellate authority, invested with powers of accepting or rejecting fresh grounds, to entertain fresh ground or not, and of course, it has to act judicially but this discretion is distinct from jurisdiction with which alone this case is concerned. It might happen that before assessee came to Tribunal, he had not viewed question urged by him from proper perspective in which he could have succeeded. In all these situations, in appeal before Tribunal, he is free to make fresh approach, present his case from different perspective and raise new grounds in support of relief sought by him. fact that he has failed to make that approach before first appellate authority should not stand in way of his making new approach. But all this must be related to same subject- matter as was in appeal before first appellate authority. If subject-matter remains same, new case presented by him to obtain relief in respect of such subject-matter should be permitted. If it is made in first instance in appeal memorandum before Tribunal, there is no question of exercising discretion at that stage. When such plea is not there before Tribunal when appeal is filed, but is raised later, question whether it should be allowed or not is matter of discretion as mentioned above. attempt of Tribunal in every case should be to determine whether subject-matter would remain same even if new ground is permitted to be raised. When, on very finding of Departmental authorities it would follow that assessee would be entitled to relief, it may not be proper to deny him that relief and in fact there is duty on Tribunal to grant such relief. Speaking of subject-matter, it may happen that substantially claim is urged, by assessee assuming that he is entitled to that claim under certain provision of law indicated by him. It may be that he is entitled to relief in respect of such claim or part of it not because of that provision, but some other provision of law. For mere reason that he does not refer to or advert to provision appropriately applicable will be no reason to deny him right to urge his case, since in such case also subject-matter will not change by reason of allowing question to be raised. allowing question to be raised. It is not necessary that question should be specifically raised before AAC as ground, but not dealt with in order to imply decision on that point. decision is on subject-matter of appeal. subject-matter of appeal may be capable of challenge on various grounds, some of which might have been raised and some might not have been raised. Those raised might have been dealt with, but decision on subject-matter is implied decision on all matters which are raised and which could have been raised, whether dealt with or not. Merely because ground has not been raised, though could be raised in support of relief sought in appeal, it cannot be said that it cannot be raised before Tribunal. conclusion reached merely on basis that question, though could have been raised was not raised, cannot be permitted to be raised, is not proper conclusion reached in law. In sum, it must be taken to be well settled that scope of appeal before Tribunal extends to subject-matter of appeal before AAC, and if question sought to be raised for first time before Tribunal is question which concerns subject-matter of appeal which was before AAC, then such question would be permissible. " Full Bench had also benefit of Delhi High Court decision in Anand Prasad's case (supra). Gujarat High Court's above decision is Full Bench decision. It also had benefit of Punjab & Haryana High Court, Andhra Pradesh High Court and Madras High Court decisions heavily relied upon by assessee's counsel. benefit of Full Bench decision of Gujarat High Court was not available to Madras High Court. Moreover, that is view taken by Delhi High Court in Anand Prasad's case (supra). Respectfully following, therefore, Delhi High Court decision, Full Bench decision of Gujarat High Court and Bombay High Court decision in preference to Madras and Punjab & Haryana High Court decisions (for reasons given above), we take view that in order to understand scope of Tribunal's jurisdiction one has to draw clear distinction between purport and scope of expressions such as 'subject-matter of assessment', 'subject-matter of appeal before first appellate authority', 'subject-matter of appeal before Tribunal' and 'subject- matter of ground'. While expression 'subject-matter of assessment' would mean and cover all that has been indicated by Supreme Court in case of CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC), 'the subject matter of appeal before first appellate authority, would be such additions/disallowances/inclusions, as are objected to by assessee and/or taken up by first appellate authority himself suo moto for consideration. While outer limit of subject-matter of appeal before first appellate authority would be subject-matter of assessment, outer limit of 'subject-matter of appeal' before Tribunal would be issues raised before or actually decided by first appellate authority; outer limit getting further restricted in case of appeal by grounds decided against appellant by first appellate authority and in case of respondent to interlinked issues having bearing on subject-matter of appeal. In other words, it will be open to assessee or ITO to challenge that portion of order of first appellate authority which is against him partially or in toto. In case ITO or assessee omits for some reason to challenge one of issues decided against him by first appellate authority originally, he may do so by seeking leave of Tribunal to raise additional grounds, which Tribunal, in its discretion, will entertain. Within scope of subject-matter of appeal before Tribunal, Tribunal will have widest possible power but not with regard to issues which fall outside subject-matter of appeal, viz., issues which have not been raised before nor considered by first appellate authority. It may not be out of place to mention that Bombay High Court has in its decision in N.A. Narielwalla's case (supra) made distinction as regards initial jurisdiction in making assessment order. According to High Court, questions relating to initial jurisdiction to make orders would stand on different footing as such questions are always present as part of subject-matter of appeal at all stages of appeal either before AAC or Tribunal. However, additional grounds raised herein do not, admittedly, refer to question of initial jurisdiction. In circumstances, we are inclined to hold that grounds raised herein by way of additional ground cannot be entertained. Before concluding, we would like to mention that Supreme Court in its Before concluding, we would like to mention that Supreme Court in its decision in case of Gurjargravures (P) Ltd. (supra) held that Tribunal was not correct in holding that AAC should have entertained question of relief under s. 84 of Act or to direct ITO to allow relief as neither was any claim made before ITO regarding that relief nor was there any material on record in support thereof. following observations of their Lordships at p. 5 were kly relied on behalf of assessee to urge that question of admission of new ground has been left open by Supreme Court in cases where there is material on record to decide question: " ...We are not here called upon to consider case where assessee failed to make claim though there was evidence on record to support it, or case where claim was made but no evidence or insufficient evidence was adduced in support. In present case neither any claim was made before ITO, nor was there any material on record supporting such claim... " Strong reliance was also placed on Andhra Pradesh High Court decision in case of Gangappa Cables Ltd. (supra), where Tribunal was held to be justified in entertaining fresh ground for first time on ground that there was material on record for deciding same. It was stated that special leave petition filed by Department has been rejected by Supreme Court and, therefore, Andhra Pradesh High Court's decision should be taken to be decision of Supreme Court. In order to understand and deal with above submissions on behalf of assessee, it is noteworthy that claim in Supreme Court case was made before AAC for first time and not before Tribunal. AAC had not entertained claim for relief on ground that claim for exemption had not been made before ITO. Tribunal held that since entire assessment was open before AAC, there was no reason for his not entertaining claim and directing ITO to allow appropriate relief. This order of Tribunal was confirmed by High Court but Supreme Court has reversed High Court's order. implication of decision, to our mind, is that observations of Supreme Court, regarding existence of material for decision, apply to claim made for first time before AAC. It will be too much to read that, that would also be so in case of fresh ground taken before Tribunal. case of Gangappa Cables Ltd. (supra) has proceeded on following finding given by Tribunal: " assessee filed return of income duly accompanied by directors' report showing P&L a/c and balance sheet. There were also other statements filed. question whether allocation of entire expenditure to capital assets can be done was also mooted before ITO. Therefore, all necessary details for allowing claim under s. 80J(1) were practically there before ITO. " It is evident from above finding that claim for deduction under s. 80J(1) of Act as such was not made for first time. It was mooted before ITO. What was mooted before Tribunal for first time is only one more aspect of claim, viz., that expenditure incurred by assessee before it went into commercial production was admissible deduction for purpose of s. 80J(1). Tribunal found that all necessary details for allowing claim were practically there before ITO. In fact, Full Bench of Gujarat High Court has also in its decision in Cellulose Products of India Ltd.'s case (supra) taken same view. On merits, Full Bench has held that new ground raised only new approach to question of computation of capital and was, therefore, to be entertained. We have gone through other decisions, relied upon by parties, before us. In our view, these decisions do not take their respective contentions further than we have noted and consider in order. Having regard to above discussion, we refuse to entertain additional grounds. It is, of course, open to assessee to seek remedy, if available, before other forums in accordance with law. Apart from fact that decision on additional grounds will require further investigation, we do not finally express ourselves on that aspect in view of our decision against admission on basic question. We now take up 10 grounds taken originally in appeal memo. first 8 grounds relate to question of depreciation on construction equipment. It is common ground that assessee has not yet been able to set up its business s such. plant is in stage of construction/erection. Contracts are given for different jobs to different contractors. In order to facilitate construction/erection of plant, assessee has purchased huge construction equipment which is hired out to contractors for purpose of construction/erection of plant. hiring charges are offered for taxation and are taxed as such. It is also common ground that major part of equipment has not been used by contractors during previous year and hiring charges have naturally not been received in respect thereof. As against assessee's claim that it is entitled to depreciation on cost/written down value of whole construction equipment, IAC has allowed depreciation only on that part of construction equipment, which has been actually put to use and in respect of which hiring charges have been received. CIT (A) has confirmed order of IAC vide para No. 5 of his order in following words: " assessee-company had not entered into any agreement for hiring out its entire block of construction equipment and although its primary object was to use its plant and machinery for construction of thermal power units in various parts of country, it let out on hire some selected items to others and earned hire charges therefrom. I am, therefore, inclined to agree with view taken by IAC on authority of commentary of learned author, A.C. Sampat Iyengar, in 6th edition of his publication to effect that if there is no user (during accounting year), machinery or plant being allowed to remain idle, there can be no allowance for depreciation. expression 'use for purpose of business' would mean that assets must be used by owner for purposes of carrying on business and earning profit therefrom. In instant case, assessee-company had not used its entire block of equipment for purpose of its business and hire charges from letting out three items of plant and machinery have been offered for taxation under head 'Income from other sources'. It cannot, therefore, be said that assessee-company had used its entire block of construction equipment for purpose of its business. I, accordingly, hold that IAC was justified in restricting allowance of depreciation on those items of plant and machinery which were actually used by assessee for earning hiring charges, which are subject-matter of taxation in this case. " Referring to p. 112 of assessee's paper-book, it is fairly admitted by Ganesan that depreciation is being allowed to assessee on basis of actual use for hiring purposes in past also. It is, however, stated that hiring charges are taxed as income from other sources under s. 56(2)(ii) of Act and, therefore, claim for depreciation is to be considered under s. 57(ii) of Act, which in turn means under s. 32(1)(ii) of Act. It is stated that that clause nowhere prescribes that machinery or plant should be actually put to use for hiring. It is sufficient if machinery or plant is ready for use. Departmental Representative kly relied on order of CIT (A). We are in agreement with CIT (A) that unless used, machinery or plant does not qualify for depreciation under s. 32(1)(ii). This ground is, therefore, rejected. (This para is not reproduced here as it involves minor issue.) In result, appeal is partly allowed. *** NATIONAL THERMAL POWER CORPORATION v. INSPECTING ASSISTANT COMMISSIONER