Appellate jurisdiction over assessed income includes correcting the head of income, if no new item outside the record is introduced.

The appellate power under section 31(3)(a) was construed broadly: the Appellate Assistant Commissioner could confirm, reduce, enhance or annul an assessment, and could also alter the head under which an item already considered in the assessment was taxed. The division of income into heads was treated as relevant to computation, deductions and exemptions, not as a limit on appellate jurisdiction. The authority could therefore change the head of assessed income, provided no new source or item outside the assessment record was introduced. Questions on escaped income were distinguished because they concerned items not considered at all by the Income-tax Officer.

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Issues: Whether the Appellate Assistant Commissioner had jurisdiction, under the appellate powers relating to assessment, to treat income already assessed by the Income-tax Officer under one head as falling under another head.

Analysis: The statutory power under section 31(3)(a) was construed broadly as enabling the Appellate Assistant Commissioner to confirm, reduce, enhance or annul the assessment. The division of income into heads was held to be relevant only for computation, deductions and exemptions, and not as a limitation on appellate jurisdiction. Once an item of income had been considered by the Income-tax Officer and formed part of the assessment record, the appellate authority could interfere with the head under which it was placed, provided no new income outside the record was introduced. The authorities on escaped income were distinguished because they dealt with items not considered at all by the Income-tax Officer.

Conclusion: The Appellate Assistant Commissioner had jurisdiction to change the head under which the assessed income was placed, and the answer to the referred question was in the affirmative.

Ratio Decidendi: Where an item of income has been considered in the assessment proceedings, the Appellate Assistant Commissioner may, in exercise of appellate powers over the assessment, correct the head of income under which it was brought to tax, so long as no new source or item outside the record is introduced.

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