2011 (3) TMI 327

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.... of convenience.   2. The grievance common to both the appeals are as follows:   "1. The ld CIT (A) erred in confirming the order passed by the AO u/s.147 of the I.T.Act, 1961.   2. The ld CIT (A) in estimating the income at Rs.3,30,560 and the CIT (A) erred in accepting the method adopted by the AO.   3. The ld CIT (A) erred in confirming the action of the AO in arriving at the income through consumption of electricity method which is not a recognized method for arriving at the income.   4. The ld CIT (A) erred in estimating the production @ 2 kg per unit of electricity consumption and fixing the price at Rs.30 per kg and estimating the net profit @ 2 % which are all on the higher side.   5. ....

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....asis of power consumption as per bills raised by Maharashtra State Electricity Board. In other words, the income was not estimated on the basis of alleged power theft but on the basis of consumption of power as per MSEB records. It is thus clear that even as the ground of reopening was understatement of production on account of theft of power, the assessment actually framed was on the basis of estimate of production in the light of power consumption according to the MSEB billing. The very reason for which the assessment was reopened did not actually being a role in estimating the income as finally assessed.   4. The short question which really is required to be adjudicated on the above facts is that when an assessment is reopened on....

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....hased by the assessee from MSEB and not the electricity said to have been stolen by the assessee from MESB. It is well settled law that when additions are not made in respect of the ground for which reassessment is resorted to, no other additions can be made in the course of such reassessment proceedings. If needed, authority contains in CIT vs. Atalas cycles, 180 ITR 319(P and H). The same view is now accepted by the Hon'ble Jurisdictional High Court in the case of CIT vs. Jet Airways, 195 Taxman 117, wherein, Their Lordships have observed that if after issuing a notice under section 148, the AO accepts contention of the assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, ha....