ASST CIT 3, MUMBAI vs. PRAMOD RATAN PATIL, MUMBAI

ITA No. 7239/Mum/2016 is filed by Mr. Pramod Ratan Patil (assessee/appellant) and ITA No. 3851/Mum/2016 is filed by the Asst. Commissioner of Income-Tax, Circle 3, Kalyan (the learned AO) against Appellate order passed by the Commissioner of Income-tax (Appeals)-3, Nasik (The learned CIT (A)) dated 28th March, 2016 for A.Y. 2011-12.

Ld Assessing Officer has raised following grounds of appeal: -

Assessee is an individual engaged in the business of supply of soil, filed his return of income on 27 September 2011 at ₹22,28,870/-. The return of income was picked up for scrutiny and assessment order under Section 143(3) of the Income-tax Act, 1961 (the Act) was passed on 28th February, 2014 at the total income of ₹5,84,12,807/-wherein following additions/disallowances were made:-

Thus the learned assessing officer has made the following addition to the total income of the assessee:-

Therefore, the order of the learned CIT (A) is challenged by the assessee on various additions confirmed as well as enhancement made by the learned CIT (A). The Ld AO is aggrieved with deletion of the addition/ disallowance made by the learned CIT (A).Thus, these cross appeals.

The learned Authorized Representative has filed detailed paper books containing two box files of various submissions and written submission made before the lower authorities. The learned Authorized Representative also refers issue wise submissions.

The ld Departmental representative has also filed a paper book and also written submission. The learned Departmental Representative supported the orders of the learned Assessing Officer with respect to the additions/ disallowances made by the learned Assessing Officer and supported the order of the learned CIT (A), where these additions are confirmed. The learned Departmental Representative also vehemently supported the order of the learned CIT (A), where he enhanced the income of the assessee. He submitted that the learned CIT (A) has properly assumed jurisdiction under Section 251 of the Act and after giving, an opportunity for hearing, enhanced the income.

The learned Authorized Representative vehemently submitted that the learned CIT (A) has made two types of enhancements. He submitted that the first set up enhancements are with respect to the examination of the details at the time of dealing with various disallowance by the learned

We have carefully considered the rival contentions and perused he orders of the lower authorities. We have also carefully perused written submissions and paper books filed by both the parties. We have also carefully gone through various decisions cited by both parties.

First, we come to the appeal of the learned Assessing Officer. As per ground no. 1.1, the learned Assessing Officer is aggrieved where the learned CIT (A) has deleted the disallowance for purchase from three parties M/s VA Inamdar, Lucky Enterprise & Geetesh & Co.

The facts leading to the disallowance shows that assessee has made purchases from six different entities amounting to ₹2,87,26,562/–, which was disallowed by the learned Assessing Officer, as the notices sent under Section 136(6) of the Act to the parties were not served and the assessee submitted the ledger accounts which were not signed. During the course of appellate proceedings, the assessee submitted the signed ledger confirmation of all the parties that showed the details of purchases and mode of payment, the copies of the bills raised by these parties were also produced along with permanent account number of the supplier entities. All the suppliers also submitted an affidavit that they had supplied material to the assessee and his proprietary concerned M/s Yogiraj Enterprises.

These details were sent by the learned CIT (A) for the examination to the learned Assessing Officer and assessee was asked to reconcile the corresponding sales against the purchases. Assessee submitted such detail and based on this, the learned CIT (A) deleted the addition with respect to the above three parties. With respect to VA Inamdar, the Assessing Officer did not give any adverse comment. With respect to Geetesh & Co., the proprietor of the firm appeared before the learned Assessing Officer and confirmed the supply of goods. Similar is the case with respect to Lucky

Ground no. 1.3 is with respect to the action of the learned CIT (A) in allowing the deduction of above purchases and even though the learned CIT (A) enhanced the addition by invoking the provision of Section 40A(3) of the Act amounting to ₹54,33,800/-. We found that as per Para 9.3, the learned CIT (A) noted that though the purchases are genuine, however, the payments for such purchases have been made in violation of Section 40A (3) of the Act. We find that even in the genuine purchase if it violates the Provisions of Section 40A (3) of the Act, separate disallowance can be made despite allowing the deduction of purchase. In view of this, we do not find any infirmity in the order of the learned CIT (A) in invoking the provision of Section 40A (3) of the Act despite deleting the disallowance with respect to unverified purchases. Accordingly, ground no.1.3 of the appeal is dismissed.

In the appeal of the learned Assessing Officer, there are no other grounds. Accordingly, appeal of the learned Assessing Officer is dismissed.

Now we come to the appeal of the assessee.

The first ground of appeal is with respect to service of notice. No arguments were advanced; hence, it is dismissed.

Ground no.2 is with respect to challenge the assessment proceedings. No arguments were advanced; hence, this ground of appeal is also dismissed.

Ground no. 3 to 6 relates to various additions combined in these three grounds. Assessee has also challenged the enhancements made by the learned CIT (A).We deal with each of the issues.

The first addition relates to a sum of Rs 2, 91,330/– made under section 40A (3) and ₹ 367,581 for cash transportation expenses. Fact of the issue shows that the learned assessing officer has disallowed the transportation

With respect to the balance sum of cash payment of ₹ 14,70,327/- , assessee produced cash vouchers, which were verified by the learned CIT appeal and noted that the assessee has not mentioned the truck number and quantity of goods transported. Further, some of the vouchers are unsigned. The learned CIT – A observed that some of the handwriting is similar though the names of the persons are different. Therefore, he disallowed 25% of such expenses of RS. 14,70,327/– calling for addition and enhancement.

Therefore, the original disallowance made by the learned assessing officer was with respect to Rs. 4,435,916/- on account of transportation charges. The learned CIT – A deleted the above disallowance. He found that assessee has made a cash payment of transportation expenditure

The learned authorized representative submitted that enhancement is not proper as the learned CIT – A has made the disallowance under section 40 A (3) of the act which was not made by the learned assessing officer and further disallowed 25% of the expenditure which were not crossing the threshold provided under that section, for reason that the vouchers did not contain the signature, quantity etc. It was further stated that the disallowance at the rate of 25% of the expenditure is unwarranted. This proves that the learned CIT – A has also accepted 75% of the expenditure as genuine. Accordingly, it was stated that the addition made by the learned CIT – A is not correct

The learned departmental representative vehemently supported the orders of the lower authorities. It was further stated that it is the power of the learned CIT – A to enhance the addition. It was further stated that it is not the new source of income which has been discovered by the learned CIT – A. It was further stated that when the expenditure incurred is in clear-cut violation of the provisions of section 40A (3) of the act, there is no reason to not to disallow the same.

We have carefully considered the rival contention and perused the orders of the lower authorities. The facts are very clear that the learned assessing officer has made the addition because of transportation charges of Rs. 4,435,916 for the reason that some of the parties did not respond to the queries raised by the learned assessing officer. The learned CIT – A on remand report of the learned assessing officer on the submission of the assessee and thereafter held that disallowance made by the learned assessing officer on account of transportation expenditure is not sustainable. Accordingly, he deleted the addition of Rs. 4,435,916. However, during the course of appellate proceedings, he found the details submitted by the assessee contain cash payment of transportation charges. Therefore, he found that the provisions of section 251 (2) of the act are to

On the objection of the learned authorized representative against the provisions of section 251 (2) of the act, we find that the learned CIT – A has not discovered any new source of income. He has examined the details and find that the provisions of section 40 A (3) of the act are violated by the assessee and therefore he invoked such provision. This was not seen by the ld AO. Therefore, he merely corrected an error. Therefore, we do not find any infirmity in the action of the learned CIT – A in invoking the provisions of enhancement of income.

Now we come to the enhancement of income of Rs. 291,330/- under section 40 A (3) of the act. We find that the learned CIT – A has noted that on 12 instances the assessee has made payment more than Rs. 20,000 for transportation expenditure in the month of January 2011 itself. The assessee before the learned CIT – A has also stated that assessee has made payment of amount more than Rs. 20,000/- in cash for the various drivers for diesel expenses, which was required to pay at the petrol pump filling fuel and other consumables. We find that there is no such exception given under the provisions of section 40 (A) (3) of the act and respective rules 6DD of IT Rules 1962. Accordingly we confirm disallowance of Rs. 291,313/– made under section 40 A (3) of the act.

Coming to the addition of Rs. 367,581/- for cash payment in transportation expenditure which is not in violation of the provisions of section 40 A (3) of the act but the payment are made in cash and the learned CIT – A has disallowed 25% of such expenses. We find that when learned CIT – A dealing with the addition made by the learned assessing officer has categorically deleted the complete disallowance of Rs. 4,435,916/– on account of transportation charges holding it to be completely genuine, he does not have any authority to disallow 25% of the

Accordingly, The total addition made by the learned assessing officer of transportation charges of Rs. 4,435,916, which was completely deleted by the learned CIT – A, his order, is confirmed. Further, the enhancement made by the learned CIT – A of Rs 291,330/- is upheld and further the addition made by the learned CIT – A of Rs. 367,581/– is directed to be deleted and his order is reversed. Therefore out of the total transportation charges addition of Rs 291,330/– under section 40 A (3) of the act is sustained.

Now we come to the second issue of addition on account of cash payment of Rs. 998,000/- made by the learned assessing officer under section 40 A (3) of the act. The learned assessing officer noted that there are two parties namely lucky enterprises to whom payment of Rs. 298,000 has been made and M/S Geetesh & Co to which the payment of Rs. 7 lakhs have been made which are in violation of the provisions of section 40 A (3) of the act and same are required to be disallowed.

The learned CIT – A found the Ledger account of both these parties and noted that case of one of the entity assessee has made the payment of Rs. 4,750,000 in cash and with respect to lucky enterprises, the assessee has made the payment of Rs. 1,681,800 in cash. It was also noted that against the cash payment the assessee has mentioned the name of the employees of the assessee itself. Therefore, the learned CIT appeal noted that there are differences in the Ledger accounts submitted before the assessing officer and submitted before him. Otherwise how could the learned assessing officer would have noted the disallowance of Rs. 998,000/- only when the total cash payment made is amounting to Rs. 6,431,800/- with respect to these two parties.

Based on this the learned CIT – A made an enhancement noting that actual cash payment is of Rs. 6,431,800 which is in violation of the provisions of section 40 A (3) whereas the learned assessing officer has made disallowance of Rs. 998,000/- only under that section. Therefore, he issued notice by the order sheet entry only for enhancement of income. Accordingly the total sum of Rs. 6,431,800 he applied the provisions of section 40 (A) (3) of the act. The total addition made by the learned assessing officer of Rs. 998,000/– he made an enhancement of Rs. 5,433,800 u/s 40 A (3) of the act.

He further verified the purchase expenditure of the assessee. He found that assessee has also made a cash purchases of Rs. 4,164,720 and therefore the provisions of section 40 A (3) of the act does not apply. He therefore noted that on such sum in absence of proper details on the vouchers for payment of transportation charges, he disallowed 25% of such expenditure. Accordingly, he made a further addition of Rs. 1,041,180/-.

The learned Authorized representative submitted that the Ledger account produced before the assessee and the Ledger account produced before the learned CIT – A are not different. In fact, during the course of assessment proceedings the assessee gave the tally back up to the person who represented the assessee. It is a different manner of taking the report of tally printout of the Ledgers. He submitted that there is no difference between the Ledger account produced before the assessing officer and the Ledger accounts produced before the learned CIT – A both are part of the same set of books of accounts

with respect to the cash payment it was submitted that for the purpose of disallowance under section 40 A (3) of the act, each amount of expenditure incurred by the assessee as well as the payment made by the assessee both should be in excess of Rs. 20,000. if anyone of them is less than Rs. 20,000 the disallowance under section 40 A (3) of the act cannot be made. It was further stated that the assessee has not made any cash payment to the parties for the purchase of the goods wherein the payment and the amount of Bill both are in excess of Rs. 20,000. Therefore the disallowance made by the learned AO and enhancement made by the learned CIT – A both are incorrect. He referred to the exhaustive details filed in the paper book before us and submitted that in all those instances, the bill and the cash payment both are not in excess of Rs. 20,000. He submitted that the learned CIT – A the learned assessing officer is merely looked at the Ledger account and did not see the amount of the bills given by those parties. He further referred to the Ledger account stating that against the amount paid by the assessee the name of the employees have been mentioned. Some of The entries are journal entries and ld CIT (A) has considered it as cash payments. He further referred that in case of lucky enterprises the name of the assessee himself is written with respect to Rs. 10 lakhs that is journal entry. He submitted that no such cash payments have been made in violation of the provisions of section 40 A (3) of the act.

The learned departmental representative vehemently supported the order of the learned CIT – M submitted that assessee has recorded cash payment in the cashbook with respect to the two parties. Therefore, the disallowance has been correctly made.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that assessee has purchased material from M/s lucky enterprises and M/s Geetesh & Co. The learned assessing officer found that with respect to these two parties the assessee has made

With respect to the disallowance made by the learned CIT – A by making an enhancement by disallowing 25% of the expenditure of Rs. 4,164,720/– which does not have the proper description for purchases made by the assessee, we find that it is not the new source of income which has been found by the learned CIT – A, therefore, the addition as such does arise from the assessment order and the details available before the learned assessing officer. Therefore, objection of Assessee against enhancement of income on this item is rejected.

Learned CIT – A has made an ad hoc disallowance of 25% of such expenditure where he did not find that the vouchers contain the proper details about the purchase of the goods. The learned CIT appeal found that a sum of Rs. 4,164,720 is a cash purchases made by the assessee wherein the details with respect to the truck number, quantity of goods transported is not mentioned on the vouchers. Some of the vouchers are unsigned and some of the vouchers contain the similar handwriting but in different names. We find that the learned CIT – A is disallowing the expenditure out of the purchases. The amount of expenditure incurred on the transportation of expenditure the learned CIT has categorically held that the amount of expenditure incurred on transportation of goods by the assessee is genuine. The finding of the learned CIT appeal was based on the fact that the amount of transportation expenditure incurred by the assessee was corresponding to the income shown by the assessee. Here in this case the transportation expenditure for the material was held to be genuine by ld CIT (A) , however he held that the material so purchased which were transported are not genuine. The reasons given by him are the inadequate details of transportation. The fact itself shows that when the transportation expenditure is held to be genuine by the learned CIT – A,

Accordingly, out of the purchases, disallowance made by the learned assessing officer of Rs. 998,000/– and enhancement of Rs. 5,433,800/- made by the learned CIT – A is restored back to the file of the learned AO for fresh verification. Further disallowance made by the learned CIT appeal of Rs. 1,041,180 is deleted.

The next addition is with respect to the hiring charges of Rs. 63,02,742/-. The learned CIT appeal deleted the above disallowance holding that the expenditure incurred by the assessee on hiring charges is genuine. However he invoked the provisions of section 251 (2) of the act with respect to the amount of hiring charges holding that assessee has made a cash payment of Rs. 85,000 out of those sum in violation of the provisions of section 40 (A) (3) of the act.

This issue is identical to the amount of the purchases where the learned CIT – A has made disallowance by invoking the provisions of section 251 (2) of the act. The disallowance contested here by the assessee is of Rs. 85,000 only wherein in case of one party the name of the employees of the assessee were mentioned. On 1/10/2010 a sum of Rs. 25,000 were alleged to be paid by the assessee’s employee in cash and further on 11/2/2011 a sum of Rs. 60,000 is paid by the employee of the assessee in cash, which resulted into the addition of Rs. 85,000/– under section 40 A (3) of the act.

We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that this issue is identical to the case of the assessee with respect to the purchases made by the assessee in violation of the provisions of section 40 A (3) of the act as alleged by the learned first appellate authority. We have already set aside that issue back to the file of the learned assessing officer to verify whether there is any violation of the provisions of section 40 A (3) of the act considering the explanation made by the assessee. Therefore for the similar reasons we set-aside this addition also back to the file of the learned assessing officer with similar direction.

We now come to the addition of Rs. 144,76,220/- on account of receipt from Lodha dwellers private limited. The learned assessing officer has noted that as per the details available with the Department the assessee has received above sum from Lodha dwellers private limited on tax deduction at source has also been made under section 194C and 194I of the act. The assessee has claimed the credit of the entire tax deduction at source appearing in form number 26 AS. During the course of assessment proceedings, the assessee was asked to reconcile the above sum. The learned assessing officer further made enquiry from Lodha dwellers private limited who answered by a letter dated 17/05/2013 confirming that an amount of Rs 1 44,76,220/– was paid to the assessee as a compensation to vacate the land. The assessee was confronted with this information. In the end, the learned assessing officer made the above addition.

The assessee contested the above addition before the learned CIT – A. The learned CIT – A also obtained the remand report on the submission of the assessee. The assessee contested that assessee has incurred expenditure of Rs. 10,919,000/- for removing encroachments on the above land by paying

The learned CIT – A examined the complete details and additional evidences in the form of balance sheet of the assessee and affidavits that were not available before the assessing officer. The learned CIT – A rejected all the affidavits stating that

The assessee produced all these persons and the statement were recorded by the learned CIT – A. The statements of all these persons were recorded in presence of the advocate of the assessee. All the persons have confirmed that they have received payment from the assessee. Assessee also gave the permanent account number of the main person of the family who received the above payment. Those persons also submitted nature of occupation, and their entitlement to receive such compensation, land area, survey number of land evicted from, amount of compensation received, who paid the compensation, how they were enjoying occupation of the land.

However the learned CIT – A rejected all the statement of those persons finding out some infirmities in those statements. It was noted by him that when the payments are made to three or four persons of one family, only one person of that family knows the details about the transaction. All other persons have confirmed the statement of the one family member. Further, the other family members are either illiterate or ignorant about the transaction. All the persons are very poor and do not have any bank account. The money is split into small amounts in various names so that

As the statement was recorded in the presence of the authorized representative of the assessee, the statements were also given to the assessee. It was also confronted to him that he is the main person who have prepared this affidavit. He explained that he is handling the appeal matter of the assessee and therefore as the assessee has made payment to the various persons, their affidavits were obtained. It was further stated that the affidavits was signed in the office of the assessee or at the residence of those persons. With respect to the notary of those affidavits, he also explained that he is a witness to that process.

The learned CIT appeal further noted that these affidavits were prepared only to give a color of genuineness. It was further held that affidavit of these persons could be obtained by the assessee being a zilla panchayat member who hold the power over the above person in that area. Accordingly, he concluded that the assessee has received payment of Rs.133,87,820 /- which is undisclosed income of the assessee.

The learned authorized representative submitted that Lodha dwellers private limited has paid the assessee a sum of Rs. 1 22,65,464 for settlement of the land . The land was having encroachment by several

The learned departmental representative vehemently supported the order of the learned CIT – A. He specifically referred to paragraph number 13.11 of the appellate order. Accordingly he submitted that the assessee has received payment of ₹ 13,387,820 from Lodha dwellers which is not shown

We have carefully considered the rival contention and perused the order of the lower authorities. The fact shows that the learned assessing officer has made an addition of ₹ 14,476,220 as undisclosed income. It was seen from the ITS details available on the Department system against the assessee's permanent account number that during the year the assessee has received a sum of ₹ 14,476,220/– from M/s Lodha dwellers private limited and tax deduction at source thereon has also been made. The assessee has also claimed credit for the entire tax deduction at source appearing in forms number 26AS. The assessee has not disclosed these receipts in the return filed. Therefore, the assessee was provided a copy of the form number 26AS details asking him to reconcile and explain the amounts with reference to the return filed. The above sum was not found reflected in the assessee's books of accounts. The assessee submitted as per letter dated 7/2/2014 the unsigned the Ledger extract of Lodha dwellers private limited in its books along with the copies of the bills along with the bank statement of the assessee. Meanwhile the learned assessing officer also collected confirmation from Lodha dwellers limited wherein it was stated that a sum of ₹ 14,476,220/– was paid to the assessee by way of compensation to vacate lands. The assessee did not reflect the above sum in his books of accounts. The learned AO further noted that above sum has been paid to the assessee and not to its proprietary concern and therefore he made the addition of the above sum. When the matter reached before the learned CIT – A, assessee submitted a separate balance sheet with the profit and loss account and disclosed net profit of ₹ 2,416,230/- which was an undisclosed income. In the profit and loss account the payment for settlement of the land was shown at ₹ 12,265,460 whereas the Lodha dwellers has confirmed having paid a sum of ₹ 14,476,220/–. Against this receipt, the assessee has claimed the expenses of ₹ 10,919,000/– paid for settlement to various persons. The assessee produced the affidavits of all those parties to whom the amount was paid. Assessee submitted that as the above amount was accounted in the personal profit and loss account and personal balance sheet, which was audited, filed before the learned CIT – A. It was also stated that at the time of filing of the return, the

The next item of addition is with respect to the addition of ₹ 1,050,000 made by the learned assessing officer under section 68 of the income tax act. The learned AO mentioned that assessee has deposited as cash amount of the above sum with Union Bank of India and Federal Bank and the source of which is not explained. During the course of assessment the assessee could not produced any detail. However, at the time of appellate proceedings assessee submitted that he does not have any bank account with the federal bank. The learned assessing officer has also not given any information about the figure of deposit of the above sum in that bank account. Assessee submitted the statement of the bank account with Union Bank of India wherein there is a cash deposit of only ₹ 525,000/– was made.

learned CIT – A, on examination of the above detail, retained the addition of ₹ 525,000 and granted relief of the balance sum. The assessee is in appeal before us.

The learned departmental representative vehemently supported the order of the learned CIT – A.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that assessee has deposited in his bank account with union bank of India account number 50161 a sum of ₹ 525,000/- on 1/1/2011. Prior to the deposit of the above cash assessee has withdrawn the sum of ₹ 16 lakhs in cash from the same bank account. Therefore, assessee was having enough sources of funds available in cash with him to deposit the above sum of ₹ 525,000 in cash in the above bank account. There is no finding of the lower authorities that the sum of cash withdrawn on earlier dates was utilized for some other purposes and assessee was not having the above cash available in his hands. In view of this we direct the learned assessing officer to delete the above addition of ₹ 525,000 because of cash deposited in union bank of India account number 50161.

The next addition relates to an undisclosed income from luster engineering company of ₹ 92,400. During the course of assessment proceedings, the learned AO found that the appellant has received an amount of ₹ 92,400 from the above company as reflected in AIR data. There is no information available with respect to the above sum during the appellate proceedings also. Accordingly, we find no infirmity in the order of the learned CIT (A)

The next addition relates to the enhancement made by the learned CIT – A based on the personal balance sheet and profit and loss account filed during the course of appellate proceedings. Based on this the learned CIT – A issued a notice under section 251 (2) of the act on 7/3/2016 which is reproduced at page number 57 of the appellate order. The learned CIT – A noted that in the above balance sheet and amount of ₹ 97,83,899/– is shown to have been received by the assessee in the bank account which has not been disclosed in the original return of income. After discussion, the above sum was added to the total income of the assessee.

The learned authorized representative basically objected the provisions of section 251 (2) of the act stating that the learned CIT – A is empowered to issue the notice for enhancement only to the income which was subject matter of consideration for the purpose of assessment by the income tax officer. He submitted that the above sum was not subject to consideration for the purpose of assessment by the learned assessing officer and therefore the learned CIT – A could not have made enhancement of the above sum. For this proposition he relied upon the decision of the honorable Supreme Court in case of Commissioner of income tax versus Shapporji Pallonji Mistry 44 ITR 891. It was further stated that the right course of action that could have been taken by the learned CIT – A was to direct the learned assessing officer to issue notice under section 147 of the act or invoking the revisionary powers under section 263 of the income tax act.

The learned departmental representative supported the order of the ld CIT (A).

We have carefully considered the rival contention and perused the order of the dl CIT (A) and notice u/s 251 of the Act issued by him for enhancement of income. In this case, the balance sheet and P& L Account were first time available with the ld CIT (A). In the P & l Account, he finds certain details, which were not considered and decided by the ld AO. On looking that income, he issued notice u/s 251 of the Act. Only issue before us is

In CIT v. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC), the assessment year was 1947-48, and the case was finally decided in February 14, 1962. Therefore, the Act considered was pre-Independence enactment. Examining section 31 of the old Act, the Hon. Supreme Court has held that there is no doubt that the appellate authority can "enhance the assessment". This power must, at least, fall within the words "enhance the assessment", if they are not to be rendered wholly nugatory. Therefore, what can be enhanced which is the matter of Assessment only. Thus, it is clear that either it should be part of Return of income or arising in assessment proceedings. The principle emerging from various pronouncements referred and cited before us it is clear that the first appellate authority is invested with very wide powers under section 251(1)(a) of the Act and once an assessment order is brought before the authority, his competence is not restricted to examining only those aspects of the assessment about which the assessee makes a grievance and ranges over the whole assessment to correct the Assessing Officer not only regarding a matter raised by the assessee in appeal but also regarding any other matter considered by the Assessing Officer and determined in assessment.

In CIT v. Sardari Lal and Co. [2001] 251 ITR 864 (Delhi) [FB], Honourable Delhi High court held that inevitable conclusion is that whenever the question of taxability of income from a new source of income is concerned, which had not been considered by the Assessing Officer, the jurisdiction to deal with the same in appropriate cases may be dealt with under section 147, or section 148, or even section 263 of the Act if requisite conditions are fulfilled. It is inconceivable that in the presence of such specific

Accordingly, appeal of the Assessee is partly allowed with above direction.

In the result, Appeal of Ld AO is dismissed, appeal of assessee is allowed partly.