TaxTMI 
TaxTMI 
2026 (6) TMI 1270
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.... to believe that there was an escapement of income and as such the order passed is illegal, arbitrary and unjustified. 3. That Ld. Commissioner of Income Tax(Appeals) has erred in upholding the reassessment proceedings in the absence of issuance and thereafter service of notice u/s 143(2) of the Act which is a mandatory requirement and as such the order is illegal, arbitrary and unjustified. 4. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in enhancing the income without affording mandatory opportunity and notice and as such the enhancement made is illegal, arbitrary and unjustified. 5. That the Ld. Commissioner of Income Tax(Appeals) has further erred in enhancing the income on an issue of capital gains which was not the reason for re-opening and the addition made on the reason recorded regarding alleged unexplained investment in property stands deleted by Commissioner of Income Tax(Appeals) resulting in no addition made on the basis of which the case was reopened and as such, since the very reason stands obliterated, any addition made thereafter is arbitrary and unjustified. 6. Without prejudice to the above, the Ld. Commis....
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....nk statements and other documentary evidences in support of the aforesaid contention. 6. After examining the material available on record, the Ld. CIT(A) accepted the explanation furnished by the assessee and recorded a categorical finding that the sale proceeds of the Manesar property had been credited into the bank account of the assessee and payments towards purchase of the Panchkula property had been made from the same account. The addition of Rs. 79,20,000/- made under section 69 of the Act was accordingly deleted. 7. However, while disposing of the appeal, the Ld. CIT(A) further noticed that the assessee had sold the Manesar property for a consideration of Rs. 1.20 crores and according to him no taxable capital gain arising therefrom had been offered to tax. The Ld. CIT(A) further observed that the assessee had failed to establish the indexed cost of construction and had also failed to fulfill the conditions prescribed under sections 54/54F of the Act. Accordingly, exercising powers under section 251 of the Act, the Ld. CIT(A) enhanced the income of the assessee by computing Long Term Capital Gain at Rs. 98,94,000/-. 8. Aggrieved by the aforesaid action of the Ld. CI....
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.... entire enquiry conducted by the Assessing Officer was confined to examining the source of such investment. The Assessing Officer never examined the issue relating to taxability of capital gains arising from sale of the Manesar property. No enquiry was conducted by him from the standpoint of taxability of such gains and no finding whatsoever was recorded in the assessment order in this regard. 15. The Hon'ble Supreme Court in the cases of CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria (66 ITR 443) and CIT Vs. Shapoorji Pallonji Mistry (44 ITR 891) has categorically held that although the powers of the first appellate authority are wide, such powers do not extend to bringing to tax a new source of income which was not considered by the Assessing Officer. Similar view has been expressed by the Full Bench of the Hon'ble Delhi High Court in the case of CIT Vs. Sardari Lal & Co. (251 ITR 864). 16. The Ld. DR has placed reliance upon the judgment of the Hon'ble Full Bench of the Punjab & Haryana High Court in the case of CIT Vs. Smt. Aruna Luthra [(2001) 252 ITR 76 (P&H)(FB)]. We have carefully gone through the said judgment. In our considered opinion, the reliance plac....
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.... proceedings in the present case were initiated by issuance of notice under section 148 dated 30.03.2021 for Assessment Year 2013-14. The appeal against the reassessment order was filed on 08.04.2022. However, the notice proposing enhancement came to be issued by the Ld. CIT(A) only on 07.08.2024 and the enhancement was eventually made thereafter in respect of Assessment Year 2013-14. 22. It is not in dispute that the Act prescribes specific statutory conditions and time limits for reopening an assessment and bringing to tax income alleged to have escaped assessment. The reassessment jurisdiction is not an unbridled jurisdiction but is circumscribed by the limitations consciously imposed by the legislature. If the contention of the Revenue is accepted that the Ld. CIT(A) can at any stage introduce a completely new source of income unrelated to the issue for which reassessment proceedings were initiated, it would virtually render the statutory limitations prescribed under sections 147 to 149 otiose. 23. Such an interpretation would confer upon the appellate authority a power wider than that available to the Assessing Officer himself. The consequence would be that although the ....
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....as "Residential House Plot No.125, Sector-1, IMT Manesar". Thus, the very document through which the property was transferred unequivocally establishes that the property sold by the assessee was a residential house property and not merely a vacant plot. 30. We further note that the competent authority had granted Occupation Certificate dated 07.11.2008 in respect of the building constructed on the said property. The occupation certificate evidences completion of construction of a building consisting of ground floor admeasuring 205.43 square meters and certifies the property as fit for occupation. The issuance of such occupation certificate conclusively establishes existence of a residential building upon the property. Once the competent authority itself has recognized the existence of the building and granted occupation certificate, the finding recorded by the Ld. CIT(A) that only a plot was sold becomes factually unsustainable. 31. We also find support from the approved building plans, housing loan documents issued by Canara Bank, valuation report of the Architect and other supporting evidences placed on record, all of which consistently demonstrate that substantial resident....