TMI Blog2021 (9) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... th section 143(3) of the Act has made the addition for the money received by the assessee from the company namely M/s Multi Industrial Ceramic Pvt Ltd amounting to ₹ 40 Lakh. The basis/reason on which the proceedings were initiated under section 147 of the Act, there was no addition made by the AO qua to that reason. Thus, the basic premise on which the satisfaction was recorded by the AO for initiating the proceedings under section 147 of the Act i.e. escapement of income on account of sale of the property does not survive. Once the basic foundation goes, then there cannot be any addition on account of any other income which has come to the notice of the AO during the proceedings under section 147 of the Act. In holding so, we dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions, explanations and clarifications as given by the appellant and further erred in not appreciating the facts and law in their proper perspective. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 2.1 The assessee vide letter dated 06-11-2020 has also raised the additional ground of appeal challenging the validity of the assessment proceedings initiated under section 147 of the Act. The additional ground of appeal raised by the assessee is reproduced as under: 1. The Appellant challenges the notice issued by the Assessing Officer u/s.148 of the I.T. Act, 1961 which is illegal and bad in law and hence the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o long as the relevant facts are on record in respect of that item. There is no reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner (Appeals). Both the assessee as well as the department have a right to file an appeal/cross objections before the Tribunal. There is no reason why the. Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) takes too narrow a view of the powers of the Tribunal. Undoubtedly, the Tribunal will have the discretion to allow or not allow a new gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made the addition under the provisions of section 56(2)(vii) of the Act on account of the money received by the assessee amounting to ₹ 40 lakh from the company namely M/s Multi Industrial Ceramic Pvt Ltd. As per the AO, the money has been received by the assessee without any consideration and therefore the same should be treated as income of the assessee under the head income from other sources under the provisions of section 56(2)(vii) of the Act. The addition made by the AO came to be confirmed by the learned CIT (A). 7.1 As per the learned AR for the assessee, the basis on which the proceeding under section 147 of the Act were initiated did not survive as there was no addition made in the assessment proceedings qua to that reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee failed to disclose the income under the head capital gain on account of transfer of such property. Accordingly, the AO formed his reason to believe that income of the assessee has escaped assessment. 9.2 Moving further, we find that the AO in the assessment framed under section 147 read with section 143(3) of the Act has made the addition for the money received by the assessee from the company namely M/s Multi Industrial Ceramic Pvt Ltd amounting to ₹ 40 Lakh. The relevant finding of the AO as appearing in the assessment order is reproduced as under: In the absence of such details, it can be safely assumed that the said amount of ₹ 40,00,000/- received by the assessee from the company is Income from other sources ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not form part of reasons recorded by him. [Para 33 9.4 In view of the above, we draw our conclusion that the proceedings initiated under section 147 of the Act is invalid as there was no escapement of income in the hands of the assessee on account of sale of the property. Accordingly, the assessment proceedings initiated under section of the Act is invalid and therefore we quash the same. Hence the additional ground of appeal of the assessee is allowed. 9.5 As we have decided the issue in favour of the assessee on the technical ground raised by her by holding that the assessment proceedings under section 147 of the Act are invalid, accordingly, we do not find reason to adjudicate the issue raised by the assessee on merit. As such the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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