TaxTMI 
TaxTMI 
2016 (4) TMI 419
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....unity of hearing on this issue though the whole of the Loan has been treated as explained. 2. a) The Ld. CIT (A) has grossly erred on facts as well as in law in confirming the addition of Rs. 59.21,600/- out of loan from Shri D. K. Gupta and his AOP u/s 56(2)(vi) without appreciating the facts in proper perspective I 'and without providing any opportunity of hearing on this issue though the whole of the loan has been-treated as explained. b) Without prejudice to the above, the Ld. CIT (A) has grossly erred on facts as well as in law in considering the outstanding balance at the end of the year in the name of Shri D. K. Gupta and his AOP at Rs. 59,21,600/- as against the actual balance of Rs. 15,00,000/- only. 3. a) The Ld. CIT (A) has grossly erred on facts as well as in law confirming the addition of Rs. 3,30,00,000/- out of loan from Shri Pankaj Kapur u/s 56(2)(vi) without appreciating the facts in proper perspective and without / providing any opportunity of hearing on this issue though the whole of the loan/ has been treated as explained. b) The Ld. CIT (A) has grossly erred on facts as well as in law in considering the outstanding balance at the end of the year....
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.... aforesaid assessment order, assessee filed the appeal before the Ld. CIT(A) who vide impugned order dated 26.11.2012 has partly allowed the appeal of the assessee. 5. Against the Ld. CIT(A)'s order Assessee and Revenue both are in appeal before the Tribunal. 6. During the course of appellate proceedings the assessee moved an Application u/R 46A on 28.4.2011 before the Ld. CIT(A). In the said application the Assessee has submitted that the AO has not given sufficient time to produce some evidences for substantiating the claim of the asessee and completed the assessment in a hurry manner which is contrary to the principle of natural justice. The assessee has filed some documentary evidence by stating that these documents are not additional evidence, but only clarificatory in nature which the Ld. CIT(A) has mentioned in para 4 to 6 at page no. 4 to 5 of the impugned order. Ld. CIT(A) has asked for the Remand Report from the AO who vide Remand Report dated 20.7.2011 submitted that the AR of the Assessee attended the hearing on 24.11.2010, 1.12.2010, 20.12.2010 and 21.12.2010 and filed certain details on this aspect also on which addition has been made i.e. source of loan taken b....
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.... AO. Ld. Counsel for the assessee objected the impugned order on the ground that Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO. He further stated that though the powers of the Ld. CIT(A) are co-terminus with the powers of AO yet he has jurisdiction only on those items which have been considered by the AO irrespective of the fact whether the issue is subject matter of appeal or not. According to him Ld. CIT(A) have no jurisdiction over those issues which have not been considered by the AO may be subject matter of revision u/s. 263 or reassessment u/s. 147 of the Act. He stated that if Ld. CIT(A) tries to examine those issue which have not been considered by the AO, Section 147 as well as Section 263 of the Act will become redundant and the conditions for their operation will be nullified. He requested that the impugned order passed by the Ld. CIT(A) be cancelled and the addition may be deleted. In support of his arguments, he cited the following case laws:- a) CIT vs. Union Tyres 250 ITR 556 (Del. ) b) CIT vs. Sardari Lal & Co. 251 ITR 864 (Del.) (FB) c) CIT vs. Rai Bahadur Hardutroy Motilal Chamaria, (19....
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....isclosed bank accounts of the company and the appellant. In the circumstances, the stand taken by the revenue that amount received by the appellant from the Company is unexplained cannot be sustained in view of the evidences available on record. 5.5 However it is seen from the detail' filed that no interest is charged by the company or paid by the appellant. 0 income from business has been disclosed by the appellant. Therefore, these amounts cannot be considered as trading advances. Most of the borrowed funds have been invested by the appellant in the properties and other investments. 0 provision for interest has been made by the appellant on such borrowed funds. It is also seen from the record that the appellant is a shareholder and director of MIs Arlington Impex Pvt. Ltd. Together with his father Sh Vinay Puri, the appellant controls 99% share of the company. Section 2(22)(e) provides that 'dividend' includes any payment by a company, company in which the public are substantially interested, made after 31st day of May, 1987 by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares holding not less than 10% of the voting power....
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.... that this clause shall not apply to any sum of money received- (a) from any relative; or (b) on the occasion of the marriage of the individual; or (c) under a will or by way of inheritance; or (d) in contemplation of death of the payer; or (e) from any local authority as defined in the Explanation to clause (20) of section 10; or (f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or (g) from any trust or institution registered under section 12AA. Explanation.-For the purposes of this clause, "relative" means- (ii) brother or sister of the individual; (iii) brother or sister of the spouse of the individual; (iv) brother or sister of either of the parents of the individual; (v) any lineal ascendant or descendant of the individual; (vi) any lineal ascendant or descendant of the spouse of the individual; (vii) spouse of the person referred to in clauses (ii) to (vi);]....." 6.6 The appellant is an individual. He is....
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....g vide para no. 8.4 & 8.5 at pages 29 & 30 of the impugned order which are reproduced as under:- "8.4 I have considered the matter. The income of Smt. Tanisha Mohan from house property was Rs. 1,28,09,976/- during the previous year and was clubbed with the income of her husband Sh. Rajesh Mohan in the return of income filed by Sh. Rajesh Mohan. Therefore, Smt. Mohan appears to have sufficient resources of her own to advance the sum of Rs. 48,00,000/- to the appellant. It is, however, seen that two payments were made to the appellant from bank accounts of minor daughters Alia Mohan and Amani Mohan with CITI Bank, South Extension, New Delhi of Rs. 3,00,000/- vide cheque no. 139126 and Rs. 5,00,000/- vide cheque no. 139177 on 8.1.2008. I find that in the copy of the return of income and computation of Sh. Rajesh Mohan, no income of the two minor daughters has been clubbed. If the two minors are having separate bank accounts, they would have some income which would be taxable. There is no such indication from the documents filed. The AO is directed to inform the AO of Sh. Rajesh Mohan regarding this matter. 8.5 Further, for the reasons detailed in para 6.5 and 6.6. above, I hold ....
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....s. 148 of the I.T. Act. If the Ld. CIT(A) tries to examine those issues which have not been considered by the AO, then the provisions of section 147 as well as section 263 of the I.T. Act will become redundant and the condition for their operation will be nullified. Our view is supported by the following judgments passed by the Apex Court as well as Hon'ble High Court. a) CIT vs. Union Tyres 250 ITR 556 (Del. ) b) CIT vs. Sardari Lal & Co. 251 ITR 864 (Del.) (FB) c) CIT vs. Rai Bahadur Hardutroy Motilal Chamaria, (1967) 66 ITR 443 (SC) d) Holcim (India) Pvt. Ltd. vs. DCIT 2013 TIOL 903 ITATDel. 9.3 Respectfully following the aforesaid decisions rendered by the Hon'ble Supreme Court as well as Hon'ble High Court, we hold that Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO as has been done in the present case. Therefore, the impugned order on the issues involved in the grounds of appeal are without jurisdiction and is not sustainable in the eyes of law, hence, we cancel the impugned order dated 26.11.2012 being without jurisdiction by accepting the Appeal filed by the Assessee. ASSESSEE'S APPEAL BE....
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..../2013 (AY 2008-09) read as under:- "1. The order of the Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of case the ld. CIT(A) has erred in deleting the addition of Rs. 2,04,68,314/-, Rs. 8,53,75,000/- and Rs. 4,00,00,000/- made on a/c of unexplained loan / cash credit. 3. On the facts and in circumstances of case the ld. CIT(A) has erred deleting the addition of Rs. 3,00,000/- made by AO on a/c of insufficient withdrawals for household expenses. 4. The appellant craves leave to add, amend any / all the grounds of appeal before or during the course of hearing of the appeal." 14. The Revenue has filed this Appeal against the order of the Ld. CIT(A) dated 26.11.2012 relevant for the assessment year 2008-09. The Revenue has challenged the deletion of addition of Rs. 2,04,68,314/-, Rs. 8,53,75,000/- and Rs. 4,00,00,000/- made on a/c of unexplained loan / cash credit raised vide ground no. 2 and also challenged the deletion of addition of Rs. 3,00,000/- made by AO on a/c of insufficient withdrawals for household expenses raised vide ground no. 3. 15. We have discussed in detail about these deletion of additions made by the Ld. CIT(A....