Appellate enhancement cannot introduce a new source of income beyond the assessment record under tax law.

Appellate enhancement under section 251(2) of the Income-tax Act is confined to the subject matter of assessment and issues considered by the Assessing Officer, expressly or by clear implication. A Commissioner (Appeals) cannot introduce a new source of income, such as alleged commission, where that source was not examined in the assessment proceedings or reflected in the assessment order. If tax on a new source is to be pursued, the Act provides separate statutory remedies. The commentary states that enhancement on such a basis is beyond appellate jurisdiction and cannot survive.

---

---

Issues: Whether the Commissioner (Appeals) could enhance the assessed income by introducing a new source of income in the form of alleged commission, when that source was not considered in the assessment order.

Analysis: The appellate power to enhance income under section 251(2) of the Income-tax Act, 1961 is confined to the subject matter of assessment and to matters considered by the Assessing Officer, either expressly or by clear implication. Where a new source of income was not examined in the assessment proceedings and does not emerge from the assessment order or the return, enhancement on that basis is beyond appellate jurisdiction. If escaped income from a new source is to be brought to tax, the proper remedies are the separate statutory routes available under the Act.

Conclusion: The enhancement made by the Commissioner (Appeals) by introducing a new source of income was held to be without jurisdiction and was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned enhancement did not survive.

Ratio Decidendi: The power of enhancement under section 251(2) of the Income-tax Act, 1961 cannot be used to assess a new source of income not considered in the assessment order.

---