TaxTMI 
TaxTMI 
2026 (7) TMI 692
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....ation found as a result of search, the AO observed that during the year under appeal, the assessee received INR 19,00,47,596/- as share application money from 02 entities and immediately the said funds were transferred to M/s. Enso Infrastructure Ltd. The AO further observed that once Shri Ashish Begwani who was found to be the Entry Operator was Director in M/s. Enso Infrastructure Ltd. and M/s. Visionary Infrastructure Projects Pvt. Ltd. from where share application money of INR 5.02 crores was received by the assessee. Accordingly, AO alleged that the assessee company was a mere paper company and used as a conduit for transfer of funds to M/s. Enso Infrastructure Ltd. and accordingly, the addition of INR 24,02,47,598/- was made on protective basis in the hands of assessee company and substantive addition was to be made in the hands of M/s. Enso Infrastructure Ltd. 3. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide impugned order dated 30.06.2025 has deleted the addition made on protective basis by observing that the additions in the hands of M/s. Enso Infrastructure Ltd. have already been deleted. However, the Ld.CIT(A) has enhanced the income of t....
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....tructure Ltd. of INR 24,02,47,598/- by holding the same as accommodation entry routed through the assessee company by one Shri Ashish Begwani who was the Entry Operator. Ld.CIT(A) accordingly, held that the assessee must have received commission for providing such facility and thus, enhanced the income of the assessee by making addition of alleged commission @ 1.00 % on the gross value of such entry. The claim of the assessee was that Ld. CIT(A) has discovered new source of income which was never been brought to tax by the AO. It is observed that the issue raised by ld. CIT(A) while making for enhancement was never emerged from the assessment order and facts on record and it was ostensible that AO has not looked into the same. As per section 251(2) of the Act though Ld.CIT(A) has power to enhance the income of the assessee however, it has not given power to Ld.CIT(A) for assuming the jurisdiction for enhancement of income at an issue or new source of income which was not dealt with or considered by the AO during the course of assessment proceedings. Any such action could only be raised by taking recourse to the provisions of sections 263 or section 147 or section 154 of the Act in ....
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....he Commissioner. in preference to the one, which has held the field for nearly 37 years. In view of the provisions of ss. 34 and 33B by which escaped income can be brought to tax, there is reason to think that the view expressed uniformly about the limits of the powers of the Appellate Assistant Commissioner to enhance the assessment has been accepted by the legislature as the true exposition of the words of the section. If it were not, one would expect that the legislature would have amended s. 31 and specified the other intention in express words. The Income- tax Act was amended several times in the last 37 years, but no amendment of s. 31(3) was undertaken to nullify the rulings, to which we have referred. In view of this, we do not think that we should interpret, s. 31 differently from what has been accepted in India as its true import, particularly as that view is also reasonably possible. The appeal is, therefore, dismissed; but in the circumstances of the case, we make no order about costs. Appeal dismissed." 9. Further, the Hon'ble Supreme Court in the case of CIT vs Rai Bahadur Hardutroy Motilala Chamaria (supra) has held as under:- "Section 251 of the Income-t....
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....tice that the AO has not recorded the fact that the assessee has filed a revised return anywhere in the assessment order. In body of the assessment order where the AO has determined the assessed income, it is the loss as per the original return of income that has been considered by the AO and not the loss as per revised return. It is not the case where the revised return is filed beyond the time limit under section 139(5) for the AO to ignore the revised return since the assessee has filed the revised return on 17.03.2019 which is well within the time limit. The AO considering the loss as per revised return in the computation, in our view cannot be a reason to argue that the AO has under assessed the income after considering the issue of allowability of ESOP expenses. Given this, in assessee's case the CIT(A) has decided the issue of allowability of ESOP expenses which has not earlier been considered by the AO. In this regard we notice that the Hon'ble High Court of Delhi in the case of CIT v. Sardari Lal & Co. [2002] 120 Taxman 595/[2001] 251 ITR 864 has considered a similar issue wherein it is held that - "the inevitable conclusion is that whenever the question o....