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2019 (2) TMI 113 - AT - Income TaxAddition u/s 68 - enhancement u/s 251(1)(a) by CIT-A - eligibility for deduction u/s 54F - Held that:- Words "enhance the assessment" are confined to the assessment reached through a particular process. It cannot be extended to the amount which ought to have been computed. There being other provisions which allow escaped income from new sources to be taxed after following a certain prescribed procedure. So long as a certain item of income had been considered and examined by the AO from the point of view of its assessability and so long as the CIT(A) does not travel beyond the record of the year, there has never been any doubt as to his powers of redoing the categorization and bringing the assessment within the true description of the law. Claim of the assessee u/s 54F of the act which was rejected after inquiry and further claim alternatively made u/s 54 of the act was also rejected. The issue of verification of capital gain was not the issue which was at all dealt with by the assessing officer, or even a question of verification made by AO. There was no inquiry made by the ld AO on the issue of capital gain shown by the assessee. AO has not at all considered the issue of sales consideration received by the assessee on sale of house as an issue of dispute before him. Therefore according to us, CIT (A) could not have made enhancement on the issue holding that capital gain shown by the assessee itself is not in accordance with the law and given a finding that no capital gain has accrued to the assessee. CIT (A) further held that funds received by the assessee is unaccounted income of the assessee and chargeable to tax u/s 68 of the act. Hence, enhancement u/s 251 (1) (a) of the act is prohibited on the issues which have not at all been considered by the AO during assessment proceedings. This gives the common understanding that the ld CIT (A) cannot enhance income of the assessee on altogether ‘new Source‘. Therefore it is clear that CIT(A) is not competent to enhance the assessment taking an income which income was not considered expressly or by necessary implication by the Assessing Officer at all. Such is the mandate of the decisions of various high courts such as in CIT vs. National Company Ltd. [1990 (8) TMI 16 - CALCUTTA HIGH COURT], Sait Bansilal and Raggisetti Veeranna vs. CIT [1970 (1) TMI 25 - ANDHRA PRADESH HIGH COURT], Sterling Construction & Trading Co. vs. ITO [1974 (5) TMI 22 - KARNATAKA HIGH COURT] and Lokenath Tolaram vs. CIT [1985 (8) TMI 332 - BOMBAY HIGH COURT]. Decided in favour of the assessee. CIT (A) has exceeded his jurisdiction in enhancing the income of the assessee by considering the new sources of income not at all considered by the AO, consequently we allow the ground no 9, 10,11,12 and 13 of the appeal of the assessee where the addition u/s 68 has been made by the CIT (A) enhancing income of the assessee holding that sale consideration received by the assessee on sale of property is chargeable to tax as undisclosed income u/s 68 of the act. We also allow ground of the appeal of the assessee where the sales consideration received by the assessee of sale of property is chargeable to tax as capital gain and not as undisclosed income u/s 68 of the act. Further Ground of the appeal with respect to claim of deduction u/s 54 of the act , we set aside it back to the file of the AO with a direction to verify whether assessee is eligible for deduction u/s 54 or not. Assessee is directed to put its claim in its entirety and ld AO may proceed in accordance with law after granting roper opportunity of hearing. - Decided in favour of assessee.
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