TaxTMI 
TaxTMI 
2024 (11) TMI 239
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....CIT vs Sardari Lai & Co., 251 ITR 864 (Delhi). 2. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing." Additional Grounds of appeal : "1. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in making a disallowance of the claim of deduction u/s 80P, being profit from specified business activity, without issuing the notice of enhancement which is a prerequisite for such action and therefore, subsequent action of enhancement becomes null and void and accordingly consequential order deserves to be quashed. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in applying the provisions of section 80A(5) of the IT Act, and further erred in denying the deduction u/s 80P without appreciating the scope of section 80A(5). Your appellant prays for allowing the deduction." Submission of ld.AR : 2. Ld.AR at the outset submitted that assessee has raised additional grounds. Ld.AR submitted that ld.CIT(A) has made an enhancement of income without giving any opportunity. ....
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....eturn of income has been filed by the assessee hence Returned Income was taken at Nil. Aggrieved by the Assessment Order, the Assessee filed an appeal before the Ld.Commissioner of Income Tax (appeal). The assessee produced copy of Bank statement, copy of cash book list of depositors who made cash deposits with their account numbers, profit and Loss account, etc. On verification of the details filed by the Assessee, the Ld.CIT(A) arrived at the conclusion that nature and source of cash deposits is explained hence directed the AO to delete the addition of Rs. 74,16,500/-. 4.2. However, then in Paragraph 7.5, ld.CIT(A) observed that as per the Profit & Loss Account filed by the assessee, the Net Profit was Rs. 10,93,629/-. The Ld.CIT(A) observed that assessee had not filed any return of income hence the assessee will not be eligible for any deduction u/s 80P of the Act as per section 80A(5) of the Act. The Ld.CIT(A) directed the AO to add Rs. 10,93,629/- and assess the said amount as business income of the Assessee. 4.3. Aggrieved by the Order of the Ld.CIT(A) the assessee has filed appeal before this Tribunal. The moot question raised by the assessee is that the Ld.CIT(A) has ....
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....t and Loss account considered by the CIT(A) was not part of the record of Assessment Proceedings as it was never filed before the AO. Therefore, by considering the figure of "Net Profit" mentioned in the impugned Profit and Loss Account the Ld.CIT(A) has travelled beyond the jurisdiction granted by section 251 of the Act as the impugned profit and Loss account was never part of the Assessment Record. Therefore, Ld.CIT(A) has erred in giving the directions to the Assessing Officer to assess the "Net Profit". 4.8 We derive support from the Hon'ble Supreme Court's analysis of Section 31 of the Income Tax Act 1922 in the case of Commissioner of Income-Tax, Calcutta Vs. Rai Bahadur Hardutroy Motilal Chamaria. The Section 31 of the Income Tax Act 1922 and the Section 251 of the Income Tax Act 1961 are exactly identical except the 'Explanation' which is inserted in the Income Tax Act 1961. However, we have already interpreted the effect of the 'Explanation' to section 251. Similarly, we find support from the ITAT Pune's decision in the case of Vijay Builders Vs. ITO ITA 863/PUN/2013 wherein the ITAT has followed the Hon'ble Supreme Court's decision in the case of CIT vs Shapoorji Pallo....
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....fficer has not applied his mind to the question of the taxability or nontaxability of the amount of Rs. 5,85,000, the Appellate Assistant Commissioner had no jurisdiction, in the circumstances of the present case, to enhance the taxable income of the assessee on the basis of this amount of Rs. 5,85,000 or of any portion thereof. As we have already stated. it is not open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income- tax Officer with a view to find out new sources of income and the power of enhancement under s. 31(3) of the Act is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. In this context "consideration" does not mean "incidental" or "collateral" examination of any matter by the Income-tax Officer in the process of assessment. There must be something in the assessment order to show that the Income-tax Officer applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental conne....