TaxTMI 
TaxTMI 
2021 (4) TMI 247
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....yderabad failed to note that during the assessment proceedings the Learned Assessing Officer had called for all the relevant details with respect to your Appellant's transactions of speculative nature in Multi Commodity Exchange and that all the relevant details had been duly filed to the satisfaction of the Assessing Officer who had brought on record the losses suffered by your Appellant in the said Activity. 3. The learned Commissioner of Income Tax (Appeals)-1, Hyderabad failed to note that the learned Assessing Officer had treated the Cash Deposits of Rs. 43,08,600 as the Sales relating to the Jewelry Business of your Appellant, there being no other Source of Income for your Appellant, and had included the same in the total sales of your Appellant and resorted to Estimation at 8%, which is in consonance with underlying facts. 4. The learned Commissioner of Income Tax (Appeals)-1, Hyderabad failed to note that the business sales, being the source of the Cash Deposits of Rs. 43,08,600 did not form part of the Total Sales as per the Books of Accounts of your Appellant, and for this reason the learned Assessing Officer after due application of mind had rejecte....
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....er (Appeals), and which is part and parcel of the Order passed by the Commissioner of Income Tax (Appeals), raising a demand of Rs. 5,69,43,420 which has no legs to stand. 10. The learned Commissioner of Income Tax (Appeals)-1, Hyderabad has erred in law in not making available to your Appellant a copy of the Remand Report obtained from the Assessing Officer in respect of the Interest on Mortgage Loan and other Issues relating to the Assessment, for due consideration and rebuttal, and this action of the learned Commissioner of Income Tax (Appeals) is against the principles of the natural justice. 11. The learned Commissioner of Income Tax (Appeals)-1, Hyderabad failed to note that the proceeds of your Appellant's Chit Account with M/s. Sriram Chits have been utilized solely for business purposes; and that the Bank Mortgage Loan has also been utilized for business purposes, and hence once Estimation is resorted to further disallowance relating to Interest on Mortgage Loan and the treatment of Chit Dividend as Additional Business Income is not only incorrect, but against Law. 12. Any other ground/grounds that may be urged at the time of hearing." 2. ....
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.... power to find out new source of income. It was submitted that Section 251(1)(a) of the Act only envisages for the appellate authority that is CIT (Appeal) to confine its assessment to the original assessment order and not to include the power to discover a new source of income. Reliance has been placed upon the decision in case of CIT v. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC). Relevant portion relied upon is extracted here as under:- "In our opinion, this Court must be held not to have expressed its final opinion on the point arising here, in view of what was stated at pages 709 and 710 of the report. This Court, however, gave approval to the opinion of the learned Chief Justice of the Bombay High Court that section 31 of the Income-tax Act confers not only appellate powers upon the Appellate Assistant Commissioner in so far as he is moved by an assessee but also a revisional jurisdiction to revise the assessment with a power to enhance the assessment. So much, of course, follows from the language of the section itself. The only question is whether in enhancing the assessment for any year he can travel outside the record that is to say, the return made by the as....
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....essee at 8% on the total turnover after reducing cash deposits of Rs. 43,08,600/- without considering the actual transactions statement, which was available before him, in which, there is a loss. Once the AO had considered and satisfied with these transactions that there is a loss, in our considered view, the CIT(A) again cannot enhance the income without rejecting the facts which were available before him. The purchase and sales are clearly reflected in that statement. No doubt the transactions were outside the books of account but the sales have been accepted by ld. CIT(A). Once the sales have been accepted the purchases cannot be denied i.e. both purchases and sales are genuine. In the statement, which is placed in paper book at page Nos. 36 to 40 there is a loss of Rs. 17,69,957/- which is a genuine loss calculated. Therefore, the ld. CIT(A) cannot estimate profit on the turnover. Therefore, we are of the view that the CIT(A) was not justified to make enhancement on the income of the assessee. Thus, we uphold the action of the AO regarding carry forward & set off of loss as the assessee did not file his return of income within the prescribed time. The relevant observations of t....