TMI Blog2013 (10) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the instant case, the direction given by the first Appellate Authority under section 150(1) is not in accordance with law – Decided in favor of Assessee. - ITA No. 3435/Mum/2012 - - - Dated:- 4-10-2013 - Shri D. Manmohan And Shri D. Karunakara Rao,JJ. For the Appellant : Shri Vijay Kumar Sarda For the Respondent : Shri S. Ghosh ORDER Per D. Manmohan, V. P. This appeal by the assessee is directed against the order passed by the CIT(A)-31, Mumbai and it pertains to A.Y. 2003-04. 2. Facts necessary for disposal of the appeal are stated in brief. The assessee's wife, Smt. Kalpana Vijay Sarda purchased a property admeasuring 1050 sq.ft. in the building known as 'Laxmi Niwas' situated on Plot No. 49, of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said flat was not purchased by him and there is no evidence on record to show that he has paid the impugned sum to the legal heirs of late Shri. Jeevandas Bhaiya for surrender of tenancy rights. 4. The learned CIT(A) observed that since Smt. Kalpana Vijay Sarda has acquired tenancy rights or purchased the flat in Laxmi Niwas as per agreement dated 21.06.2002, if at all any addition is to be made towards payment from undisclosed sources, the same should have been considered in the hands of Smt. Kalpana Vijay Sarda. It may be noted that the assessee herein highlighted that Smt. Kalpana Vijay Sarda has filed her returns of income and she was drawing salary income of Rs. 3,00,000/- per annum during A.Y. 2003-04. It is also shown tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore him. No doubt the powers of the Commissioner (Appeals) is wider in its amplitude whereby he can even enhance an assessment - but such powers are circumscribed in a way i.e. the enhancement can be limited to the assessee who is in appeal and when it affects a third party the Commissioner (Appeals) cannot arbitrarily direct the authorities to reopen the assessment at least without giving an opportunity to the effected person. He, therefore, submitted that under section 150(1) r.w.s. 251 of the Income Tax Act the CIT(A) is not competent to issue directions in the case of a third party. 7. On the other hand, the learned D.R. strongly relied upon the order passed by the CIT(A) and submitted that the learned CIT(A) was seized of the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lpana Vijay Sarda though she has filed the return by specifying that she has purchased the property. At the same time it is not in dispute that the AO has taken a consistent stand that a sum of Rs. 16,51,000/- was paid for purchase of the said property but consciously took a view that she has no wherewithal to make such payment and hence no addition can be made under section 69A of the Act. This finding has become final and this was not in dispute before the Appellate Authority. In the appeal filed by the assessee's husband the only issue was as to whether he paid a sum of Rs. 16,51,000/- to the tenant on behalf of his wife and it is not the case of either the AO or the assessee that the payment was made by assessee's wife. Such being the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h huge amount since she had no other income to make such payment. The expression 'may be deemed to be the income' under section 69A of the Act implies that even after coming to the conclusion that a sum of Rs. 16,51,000/- would have been paid for surrender of tenancy rights it is not automatic that such addition should be made under section 69A of the Act unless it is shown that she was capable of having so much of income in the year under consideration. The first Appellate Authority has not made any comment in that regard and, in fact, has not given any opportunity to Smt. Kalpana Vijay Sarda, which shows the fallacy in the direction given by him. 10. In the case of Mrs. Banoo E. Cowasji 138 ITR 686 the Hon'ble Indore Bench of the Madhya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Assistant Commissioner has to be construed in the light of the decision of the Supreme Court in the case of Rajinder Nath v. CIT [1979] 120 ITR 14. It was not at all necessary for the disposal of the assessee's appeal for this year to give such a direction and, therefore, the same could not be treated as a direction given by the learned Appellate Assistant Commissioner as contemplated in section 153(3)(ii)." It deserves to be noticed that the expression 'in consequence of or to give effect to any finding or direction contained in an order under section 250 .....' is akin to the expression used in section 150(1) i.e. 'any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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