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TMI Blog1978 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... inment expenses at Rs. 2,902. So the learned ITO disallowed the said claim. The assessee paid donation of Rs. 501 to Shri Prajya Jain Sewak Samittee, Bijainagar. The learned ITO was of the view that the assessee has not filed any receipt in respect of donation paid to Prajya Jain Sewak Samittee, Bijainagar and as such he did not allow the deduction under s. 80G of the IT Act, 1961. 3. The learned AAC during the course of the hearing of the appeal after going through the account books noticed that the assessee had deposited a sum of Rs. 63,000 on 26th Sept., 1975 with the Oriental Bank of Commerce Ltd., Ajmer whereas the opening cash balance available with the assessee as per the cash book of the firm on the morning of that day was only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion a sum of Rs. 7,000 should be added as income of the assessee from undisclosed sources. The learned AAC also initiated penalty proceedings under s. 274/271(1)(C) of the IT Act, 1961. 5. The other contention of the assessee was that the ITO was wrong in making disallowance of Rs. 2,902 on account of entertainment expenses. The learned AAC after considering the evidence on record sustained the disallowance at Rs. 3,000 on the ground that such experience was in the nature of entertainment expenditure. 6. Against the order of the learned AAC the assessee has come in appeal before the Tribunal. The first contention of the learned counsel for the assessee was that the learned AAC was not having jurisdiction to make addition because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has every right to make the addition of Rs. 7,000 as income of the assessee from undisclosed sources. 8. We have heard the parties and perused the evidence on record. It is common ground that a sum of Rs. 7,000 was never subjected to the process of assessment. The assessee also did not make any claim in respect of a sum of Rs. 7,000. The new item of income was never before the ITO for consideration. Actually the learned ITO did not apply his mind in respect of that item or particular source of income. So the addition made by the learned AAC was really from a new item or a new source of income which was not subjected to the process of assessment. Even in the return there was no claim by the assessee. On these facts the decision in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder s. 31(3) of the Act is restricted to the subject-matter of assessment or the source of income which has been considered expressly or by clear implication by the ITO from the point of view of the taxability of the assessee." The Supreme Court at page 451 further observed as under:- "As we have already stated, it is not open to the AAC to travel outside the record, i.e., the return made by the assessee or the assessment order of the ITO with a view to find out new source of income and the power of enhancement under s. 31(3) of the Act is restricted to the source of income which has been the subject-matter of consideration by the ITO from the point of view of taxability. In this context "consideration" does not mean "incidental" or "c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the learned AAC had no jurisdiction to make the addition. If the learned AAC was having jurisdiction to make the addition, in that case we might have decided the issue on merit also. 10.The other contention of the learned counsel for the assessee was that the learned AAC was wrong in sustaining the disallowance of Rs. 2,000 out of shop expenses. In this respect it was contended that the assessee claimed total shop expenses of Rs. 8,133 and out of it the learned ITO disallowed the claim of Rs. 2,902 on account of entertainment expenses and sum of Rs. 500 out of petty expenses. It was also contended that the disallowance in respect of entertainment expenses is excessive. 11.The learned Departmental Representative contended that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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