TMI Blog2019 (3) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... he documents on record and various decisions, we are of considered view that the Commissioner of Income Tax (Appeals) has erred in exceeding his jurisdiction by enhancing income from a fresh source that was neither part of return of income nor touched upon by the Assessing Officer in proceeding u/s. 143(3) of the Act. Consequently, the impugned order is modified and enhancement made by Commissioner of Income Tax (Appeals) is set aside. - Decided in favour of assessee. - ITA No.1907/PUN/2016 - - - Dated:- 27-2-2019 - Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Pramod Shingte For the Revenue : Shri Aseem Sharma ORDER PER VIKAS AWASTHY, JM : This appeal by the assessee is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions the ld. AR placed reliance on following decisions : i. Ram Infrastructure Ltd. Vs. Joint Commissioner of Income Tax in ITA No. 746/PN/2013 for assessment year 2009-10 decided on 30-12-2016; ii. M/s. Vijay Builders Vs. Income Tax Officer in ITA No. 863/PN/2013 for assessment year 2008-09 decided on 25-02-2015; iii. M/s. Jaihind Engineers Vs. Income Tax Officer in ITA No. 791/PN/2016 for assessment year 2008-09 decided on 15-07-2016. 3.1 The ld. AR further pointed that even on merits the assessee has got good case in its favour. The own funds of assessee are much more than the investment made. Referring to Balance Sheet as on 31-03-2011 at page 11 of the paper book, the ld. AR submitted that a perusal of Balance Sheet would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions. The solitary issue raised in the appeal by the assessee is with respect to enhancement of income by Commissioner of Income Tax (Appeals) by making disallowance u/s. 14A r.w.r. 8D. 6. A perusal of assessment order reveals that the Assessing Officer has not touched upon the issue of disallowance u/s. 14A r.w.r. 8D during assessment proceedings. The solitary addition made by Assessing Officer was with respect to partial disallowance of assessee s claim of deduction u/s. 80IA of the Act. In first appeal the Commissioner of Income Tax (Appeals) has granted relief to the assessee qua deduction claimed u/s. 80IA of the Act. The enhancement made by the Commissioner of Income Tax (Appeals) by invoking the provisions of section 14A r. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that AAC is not competent to enhance assessment in appeal by discovering new source of income not mentioned in return or consider by the Assessing Officer in assessment. The relevant extract of the judgment of Hon ble Apex Court in the aforesaid case is as under: 8 The only question is whether in enhancing the assessment for any year he can travel outside the record, that is to say, the return made by the assessee and the assessment order passed by the Income tax Officer with a view to finding out new sources of income, not disclosed in either. It is contended by the Commissioner of Income tax that the word assessment here means the ultimate amount which an assessee must pay, regard being had to the charging section and his t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess words. The Income tax Act was amended several times in the last 37 years, but no amendment of section 31(3) was undertaken to nullify the rulings, to which we have referred. In view of this, we do not think that we should interpret section 31 differently from what has been accepted in India as its true import, particularly as that view is also reasonably possible. 13. The Hon ble Apex Court thereafter in the case of Commissioner of Income Tax Vs. Rai Bahadur Hardutroy Motilal Chamaria (supra) has reaffirmed its view taken in the case of Commissioner of Income Tax Vs. Shapoorji Pallonji Mistry (supra). The Hon ble justice V. Ramaswami speaking for the court stated: As we have already stated, it is not open to the Appellate As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific provisions, a similar power is available to the first appellate authority . Thus, in view of the well settled law laid down by the Hon ble Apex Court and subsequently followed by the Hon ble Delhi High Court we hold that the Commissioner of Income Tax (Appeals) has exceeded his jurisdiction in making addition u/s. 2(22)(e) of the Act as there is no reference of such income either in the return of income or in the assessment proceedings. Thus, the addition made u/s. 2(22)(e) by Commissioner of Income Tax (Appeals) is not sustainable and is therefore set aside being void ab-initio. Since, the addition made by the Commissioner of Income Tax (Appeals) u/s. 2(22)(e) of the Act has been held to be void ab-initio, the argume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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