9911796707
TMI Blog2024 (1) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... -14. 2. The grounds raised in the appeal are as under: i) The order of the Commissioner of Income-Tax (Appeals)-ll (hereinafter referred to as Commissioner Appeals) is bad in law and erroneous as to facts inasmuch as he has exceeded the jurisdiction provided under section 251 of the Income-Tax Act, 1961 by discovering a new source of income viz. unexplained investment which was never the subject matter of the assessment before the Assessing Officer. In other words, the direction of the order of the Appellate Assistant Commissioner was to satisfy himself about the source of investment of the assets. It is axiomatic that failure to prove the sources of investment will result in addition in the hands of assessee under a different provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court in the case of CIT vs. RaibahadurHardutrai Motilal Chamaria (1967) 56 ITR 443 (SC). v) Without prejudice to the above, it is submitted that the Commissioner Appeals ought to have quashed the assessment order passed by Deputy Commissioner of Income-Tax, Circle-2(l), Vadodara as same is passed taking recourse of section 145(3) based on incorrect appreciation of facts on record and estimating income at 10% of the turnover by resorting to section 144 of the Act. vi) The Commissioner Appeals erred in disallowing 20% of the travelling expenses of Rs. 26,25,946/- on ad-hoc basis when the Deputy Commissioner of Income-Tax has verified only 0.6% of the total travelling expenses which comes to Rs. 68,559/- ignoring the past ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we proceed to adjudicate the effective issues raised by the assessee hereinafter. 4. Brief facts of the case are that during assessment proceedings, the AO noted the assessee to be in the business of being a commission agent. On scrutiny of the books of accounts of the assessee he noted anomalies therein pertaining to the travelling expenses, which he found were not duly evidenced with regard to their business purpose, and with respect to salary expenses which he noted differed from the amount paid by the assessee through banking channel as compared to that claimed by the assessee in its books of accounts. Noting these anomalies, along with the fact that the assessee though being a marketing company having only sale commission income as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee at the rate of 10% of its turnover, and in turn directed specific disallowance to be made of interest expenses, staff welfare expenses and foreign travelling expenses as noted by us. 6. Aggrieved by the same, the assessee has come up in appeal before the Tribunal raising the grounds reproduced above. 7. Before us, primary and solitary contention of the ld. counsel for the assessee was that the order of the ld. CIT(A) was not sustainable for the reasons - i) That the Ld.CIT(A) had not given any finding dismissing AO's rejection of Books of the assessee and without doing so had gone on to suo moto make disallowance of specific expenses. ii) That the ld.CIT(A) went on to make disallowance of interest and staff welfare expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g expenses; ii) Mismatch in salary as paid through bank and claimed in the books of accounts; iii) His general observation that the assessee being in the marketing business, earning commission income alone, it was showing loss which was not probably in this line of business. 10. As pointed out by the ld.counsel for the assessee, the ld.CIT(A) did not find any merit in the anomaly of salary mismatch between that reflected in the bank and that claimed by the assessee in its books as noted by the AO. But however, he concurred with the AO on the non-verifiability of travelling expenses. Having said so, we have noted that the ld.CIT(A) thereafter went onto hold that in the facts of the present case specific disallowances were to be made and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of the ld.CIT(A), we find merit in the same. Though section 251 of the Act gives power to the ld.CIT(A) to expand scope of the assessment made, but the Hon'ble Supreme Court in various decisions has held that the scope cannot be expanded to discover new source of income. While explaining the wide scope of powers conferred on the first appellate authority by section 251 of the Act so as to include even enhancement of assessments, courts have held that they are not ordinary courts of appeals since only one party to the original decision is entitled to appeal and not the other party. That in view of this peculiar position the statute has conferred very wide powers on the first appellate authority once an appeal is preferred to him. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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