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TMI Blog2023 (6) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted. This Ground is allowed - ITA No. 144/DEL/2017 - - - Dated:- 17-5-2023 - SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA , JUDICIAL MEMBER For the Assessee : Shri Salil Agarwal, Sr. Adv Shri Shailesh Gupta, CA Shri Madhur Agarwal, Adv For the Department : Ms. Yamini Gautam, Sr. DR ORDER PER N. K. BILLAIYA , ACCOUNTANT MEMBER : - This appeal by the assessee is preferred against the order of the ld. CIT(A), Ghaziabad dated 18.10.2016 pertaining to Assessment Year 2009-10. 2. The substantive grievances of the assessee read as under: 1. That the Ld. CIT (A) erred in confirming that the initiation of the assessment proceedings u/s 147 of the Act was valid, without appreciating that reason recorded for initiation of assessment proceedings uls 147 was unjustified and inconsistent with the facts of the appellant's case. 2. That the Ld. CIT (A) erred in facts and law in upholding the contention of the Ld AO and enhancing the addition made on account of unexplained investment without bringing in any cogent material on record to prove that the appellant has made any investment from undisclosed sources. 3. That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o gifted 50% of the share in the property to the assessee. It was explained that all the payments for the flat were made by Ms. Diana Perrone and the payments were made in Euros directly to the builder s account. Documentary evidences in support of this submission were submitted. 8. The Assessing Officer did not accept the submission of the assessee and was of the firm belief that the assessee has made investment of Rs. 38,03,850/- and since the explanation offered by the assessee was not satisfactory and without supporting evidence, the Assessing Officer made the addition of Rs. 38,03,850/-. 9. The assessee carried the matter before the ld. CIT(A) but without any success. 10. Before us, the ld. counsel for the assessee reiterated what has been stated before the Assessing Officer. 11. Per contra, the ld. DR strongly supported the findings of the Assessing Officer. 12. We have carefully perused the orders of the authorities below. The undisputed fact is that the payments for the purchase of the impugned property were made in Euros and were paid directly to the builder by Ms. Diana Perrone. This is evident from the receipt issued by the builder exhibited at pages 102 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been the basis of enhancement done by the ld. CIT(A). The Hon'ble Supreme Court in the case of Rai Bahadur [supra] had the occasion to consider the decision of the Hon'ble Supreme Court in the case of Shapoorji Pallonji Mistry 44 ITR 891 wherein the following question was adjudicated: The only question is whether in enhancing the assessment for any year lie can travel outside the record, that is to say, the return made by the assessee and the assessment order passed by the Income-tax Officer with a view to finding out new sources of income, not disclosed in either. It is contended by the Commissioner of Income-tax that the word 'assessment' here means the ultimate would it which an assessee must pay, regard being had to the charging section and his total income. In this view, it is said that the words 'enhance the assessment' are not confined to the assessment reached through a particular process but the amount which ought to have been computed if the true total income had been found. There is no doubt that this view is also possible. On the other hand, it must not be overlooked that there are other provisions like sections 34 and 33B, which e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed profits in the hands of the assessee. We are unable to accept the argument put forward on behalf of the appellant as correct. It is true that the Income-tax Officer has referred to the remittance of Rs. 5,85,000 from the Calcutta branch, but the Income-tax Officer considered the despatch of this amount only with a view to test the Genuineness of the entries relating to Rs. 4,30,000 in the books of the Forbesganj branch. It is manifest that the Income-tax Officer did not consider the remittance of Rs. 5,85,000 in the process of assessment from the point of view of its taxability. It is also manifest that the Appellate Assistant Commissioner has considered the, amount of remittance of Rs. 5,85,000 from a different aspect, namely, the point of view of its taxability. But since the Income-tax Officer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er from the point of view of taxability and that the Appellate Assistant Commissioner had no power to assess the source of income, which had not been taken into consideration by the assessing officer. It is to be noted that strong reliance was placed by learned counsel for the revenue on the decision of the Apex Court in CIT v. Nirbheram Daluram (1997) 224 ITR 610. It was submitted that a different view was expressed about the scope and ambit of the power of the first appellate authority vis-a-vis the sources considered by the assessing officer and even if the action of the first appellate authority related to a new source of income not considered by the assessing officer, it was not impermissible. It is to be noted that in Union Tyres' case (supra), this decision was also considered by this court in the background of what had been stated in Daluram's case (supra) and it was observed that there was really no difference from the view expressed earlier in Shapoorji's case (supra) and Chamaria's case (supra). 23. The gist of the aforementioned decisions is that whenever the question of taxability of income from new source of income is concerned, which had not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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