TMI Blog1993 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... iction to enhance the assessment ?" An assessment under section 143(3) of the Income-tax Act was finalised by the Income-tax Officer on October 6, 1976. The Income-tax Officer observed that the assessee has built a house, in the construction of which a sum of Rs. 48,337 was spent. The Income-tax Officer, who deputed the inspector to make the enquiry with regard to the construction, has estimated the investment to the extent of Rs. 56,800. On the basis of the report of the inspector, wherein a difference of Rs. 8,263 was found taking into consideration the cost of the old material of the demolished house, which was used by the assessee and for which due credit was given, the Income-tax Officer made an addition of Rs. 5,000, as the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee's "income from undisclosed sources". An appeal was preferred to the Appellate Assistant Commissioner, who has estimated the cost of construction at Rs. 73,270. The Appellate Assistant Commissioner observed that, as per the books of account maintained by the assessee, the investment is at a figure of Rs. 53,062 and for that purpose a break-up was taken for the cost of construction for 1973-74, 1974-75 and 1975-76 which figured at Rs. 44,037, 4,300 and Rs. 4,725, respectively. It was found that the cost of construction shown by the assessee was Rs. 48,337 and the sum of Rs. 4,725 was the outstanding amount and thus the figure as per the books of account comes to Rs. 53,062 and not Rs. 48,337. The report of the approved valuer which was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer should have confronted the said report and proceeded for reframing the assessment by giving an opportunity. The Income-tax Appellate Tribunal observed that the directions issued by the Appellate Assistant Commissioner have to be read in the context of the ground of appeal which was before him. The Appellate Assistant Commissioner has the power to enhance the assessment after affording opportunity, but no such powers were exercised nor any directions were given to the Income-tax Officer for enhancement and, therefore, the Income-tax Officer has exceeded his jurisdiction in enhancing the assessment while framing reassessment in consequence of the order of the Appellate Assistant Commissioner. As such, the addition whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r source of income, if the matter has been remanded and directions have been given to make a fresh assessment as in the present case, then subject to the directions which have been given by the Appellate Assistant Commissioner, the Income-tax Officer has the same power in the fresh assessment, as he originally had in making an assessment under section 143 of the Income-tax Act, 1961, in respect of that point. If the Appellate Assistant Commissioner sent the matter back to the Income-tax Officer without any restrictions, then no directions can be presumed or inferred on the powers of the Income-tax Officer when he proceeds to make the fresh assessment in substitution of the order which has been set aside. If the directions have been given, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to follow the correct procedure in law as stated above. The correct procedure which was referred to in these directions was that no adverse order could be made unless the taxpayer was given reasonable opportunity of being heard. Thus, it would be evident that while setting aside the entire order the directions were to examine whole case afresh and the further directions were to follow correct procedure in law and then to make a fresh assessment order. No restrictions have been placed by the Appellate Assistant Commissioner on the right of the Income-tax Officer restricting the assessment to the figure, which was determined in the earlier assessment order, which has been set aside. As a matter of fact, the said order is no longer in exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment after examining the various factors involved in detail giving an opportunity to the assessee before the additions are made and, therefore, this order of remand is without any restrictions and the Income-tax Officer could exercise all powers which he could otherwise exercise at the time of making the original assessment. On the basis of this decision and the operative part of the order of the Appellate Assistant Commissioner, we find that the assessment order in the present case has also been set aside fully and the Income-tax Officer was directed to examine the whole case afresh. The order of the Appellate Assistant Commissioner has not fettered the discretion of the Income-tax Officer while framing the assessment order and examining ..... X X X X Extracts X X X X X X X X Extracts X X X X
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