VINAY VERMA, MUMBAI V. ITO 26(2)(3), MUMBAI

ITA 4530/MUM/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9212 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 23-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-07-2014
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: VENUGOPAL C NAIR
• Keywords: Unexplained investment; Unexplained expenditure; Salary income; Source of fund; Additional evidence; Cost of acquisition; Corroborative evidences
• Section: 54; 263; 144

Judgement Text

, LH LHLH LH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. , ! , BEFORE S/SH.VIJAY PAL RAO, JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.4530/MUM/2014, ' ' ' ' # # # # / ASSESSMENT YEAR-2009-10 VINAY VERMA, B48 GURUDEV APTS, CHEMBUR NAKA, CHEMBUR, MUMBAI-400071 PAN:ABXPV4299E VS ITO-26(2)(3), K.G.MITTAL AAYURVEDIC HOSPITAL, 6 TH FLOOR, CHARNI ROAD, MUMBAI. ( $% / APPELLANT) ( &'$% / RESPONDENT) '() '() '() '() * * * * / ASSESSEE BY : SHRI V ENUGOPAL C. NAIR + * / REVENUE BY : SHRI PREMANAND J. ' ' ' ' + ++ + ), ), ), ), / DATE OF HEARING : 12-03-2015 -.# + ), / DATE OF PRONOUNCEMENT : 25-03-2015 ' ' ' '1961 1961 1961 1961 + + + + 254 254 254 254( (( (1 11 1) )) ) )7) )7) )7) )7) 8 8 8 8 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! !! ! ' ' ' ' : CHALLENGING THE ORDER DATED 30.04.2014 OF THE CIT(A )-28,MUMBAI THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1 THE LEARNED CIT(A) ERRED IN FACTS CIRCUMSTANCES A ND IN LAW IN MAKING ENHANCEMENT BY EXERCISING POWERS EXPRESSLY RESERVED BY THE INCOME TAX ACT 1961 TO THE COMMISSIONER OF INCOME TAX U/S 263 WITHOUT APPRECIATING THAT SEPARATE JURI SDICTION HAS BEEN ENSHRINED IN INCOME TAX ACT FOR EXERCISING VARIOUS POWERS 2 THE LEARNED CIT(A) ERRED IN FACTS CIRCUMSTANCES A ND IN LAW IN FRAMING THE ORDER BY INTRODUCING NEW SOURCE OF INCOME WITHOUT APPRECIATING THAT POWE R OF ENHANCEMENT IS TO BE CONFINED ONLY TO THE SUBJECT MATTER OF ORIGINAL ASSESSMENT WITHOUT PREJUDICE TO THE ABOVE GROUNDS FOLLOWING GR OUNDS ARE BEING TAKEN 3 THE LEARNED CIT(A) ERRED IN FACTS CIRCUMSTANCES AND IN LAW IN RESTRICTING TO 50% OF THE DEDUCTION CLAIMED U/S 54 FOR NON FURNISHING OF EVID ENCE OF FULL FINANCIAL OWNERSHIP,WITHOUT APPRECIATING DECISION OF JURISDICTIONAL HIGH COURT ON THE SUBJECT. 4 THE LEARNED CIT(A) ERRED IN FACTS CIRCUMSTANCES A ND IN LAW IN WITHDRAWING COST OF IMPROVEMENT ON THE ASSET WITHOUT GIVING REASONABLE OPPORTUNITY TO PRODUCE THE EVIDENCES BY ISSUE OF IMPROPER SHOW CAUSE NOTICE ESSENTIAL FOR ENHANCEMENT 5 THE LEARNED CIT(A) HAS ERRED IN FACTS CIRCUMSTANC ES AND IN LAW IN MAKING ADDITION OF DEPOSITS SEEN IN PASS BOOK BY MAKING ROVING ENQUIRIES WITHOU T GIVING REASONABLE OPPORTUNITY TO PRODUCE THE EVIDENCES BY ISSUE OF IMPROPER NOTICE PURPORTIN G TO BE THE SHOW CAUSE NOTICE ESSENTIAL FOR ENHANCEMENT 6 ,THE LEARNED CIT(A) ERRED IN FACTS CIRCUMSTANCES AND IN LAW IN CONFIRMING OF PAYMENTS AGAINST CREDIT CARD SEEN IN THE BANK ACCOUNT WHE INCOME AS PER RETURN OF INCOME IS SEEN TO BE DEPOSITED, BY REFUSING TO ADMIT ADDITIONAL EVIDENCE UNDER RULE 46A AFTER SEEKING A REMAND REPORT FROM THE AO. REASONS GIVEN BY CIT(A) FOR FRAMING ASSESSMENT U/S SEC 144 AND MAKING ADDITIONS ARE ALL WRONG, INSUFFICIENT AND CONTRARY TO FACTS AND EVIDENCE ON RECORD AND IN LAW. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER, MODIFY OR OMIT ANY OF THE AFORESAID GROUNDS OF APPEAL AS OCCASION MAY ARISE OR DEMAND. AT THE TIME OF HEARING BEFORE US,THE AUTHORISED REP RESENTATIVE(AR)OF THE ASSESSEE DID NOT PRESS GROUND OF APPEAL NO.4.HENCE,SAME STANDS DISMISSED. 2. BEFORE US,THE ASSESSEE FILED ADDITIONAL EVIDENCES W ITH REGARD TO DEDUCTION CLAIMED U/S.54 OF THE 2 ITA NO. 4530/M/2014 VINAY VERMA ACT.IT WAS STATED IN THE APPLICATION AND THE AFFIDA VIT OF THE ASSESSEE THAT THE FIRST APPELLATE AUTHORITY (FAA)HAD ON 29. 04. 2014,OBTAINED EXPLANA TION ABOUT CREDIT OF RS.30 LAKHS,THAT AFTER PERUSING THE AGREEMENT COPY AND POSSESSION CERTIFIC ATE FOR THE INVESTMENT IN NEW PROPERTY FOR CLAIMING DEDUCTION U/S.54 SOUGHT CONFIRMATION OF TH E PARTY AND SUPPORTING EVIDENCES FOR CREDITS IN BANK ACCOUNT AND PROOF OF 100% OF FINANCIAL OWNERSH IP OF THE ASSESSEE IN THE NEW FLAT,THAT THE FAA PASSED ORDER ON SAME DAY I.E.29.04.2014,THAT HE HAD NOT SUFFICIENT TIME TO PRODUCE EVIDENCE. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE(AR)OF THE ASSESSEE STATED THAT THE ASSESSEE COULD NOT PRODUCE THE ADDITIONAL EVIDENCES DUE TO PAUCITY OF TIME, THAT THE DOCUMENTS WERE VITAL TO DECIDE THE ISSUE.DEPARTMENT AL REPRESENTATIVE(DR)LEFT THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCE TO THE DISCRETION OF THE BENCH.WE HAVE GONE THROUGH THE DOCUMENTS AND FIND THAT SAME WOULD HAVE BEARING ON FINAL OUTCOME OF THE APPEAL.THEREFORE,WE ADMIT THE SAME. 3. ASSESSEE,AN INDIVIDUAL,DERIVING INCOME FROM SALARY AND OTHER SOURCES,FILED HIS RETURN OF INCOME ON 15.02.2010,DECLARING TOTAL INCOME OF RS.13,10,84 1/-.THE CASE OF SELECTED FOR SCRUTINY UNDER CASS CATEGORY TO EXAMINE THE DEDUCTION CLAIMED BY T HE ASSESSEE U/S.54 OF THE ACT.AS THE ASSESSEE DID NOT APPEAR BEFORE THE AO,THOUGH HE HAD ISSUED HIM NOTICES ON MORE THAN ONE OCCASIONS.CONSIDERING THE NON COOPERATIVE ATTITUDE OF THE ASSESSEE THE ASSESSING OFFICER (AO) CALLED FOR DETAILS FROM BANKS.HE MADE ADDITION TO T HE INCOME OF THE ASSESSEE UNDER THE HEAD UNEXPLAINED EXPENDITURE OF CREDIT CARD TRANSACTIONS AND UNEXPLAINED INVESTMENT IN MUTUAL FUNDS.THE AO FINALISED THE ASSESSMENT U/S.144 OF TH E ACT,ON28.12.2011,DETERMINING THE TOTAL INCOME AT RS.34, 00,130/-. 4. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA.BEFORE HIM DETAILED SUBMISSIONS WERE MADE ABOUT THE REASONS FO R NOT APPEARING BEFORE THE AO AND ABOUT THE INVESTMENT MADE IN MUTUAL FUNDS AS WELL AS ABOUT TH E CREDIT CARD EXPENDITURE.THE FAA CALLED FOR REMAND REPORT FROM THE AO AND AFTER RECEIVING R EJOINDER OF THE ASSESSEE AGAIN DIRECTED THE ASSESSEE TO FILE FRESH REMAND REPORT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE,T HE ASSESSMENT ORDER,THE REMAND REPORT AND THE REJOINDER,THE FAA HELD THAT THE CASE OF THE ASSESSE E WAS PICKED UP FOR SCRUTINY THROUGH CASS, THAT A NOTICE U/S.143(2) WAS ISSUED AND SERVED IN TIME,THAT THE CASE WAS PICKED UP FOR SCRUTINY AFTER FOLLOWING DUE PROCEDURE AND WAS LEGALLY VALID ,THAT IN THE NOTICE U/S.142(1), THE AO HAD ASKED FOR A CERTIFIED COPY OF 'RETURN OF INCOME' AL ONG WITH 'COMPUTATION OF INCOME' AND OTHER CERTIFICATES ETC AS THE ASSESSEE HAD FILED E-RETURN ,THAT IT WAS A NORMAL PRACTICE OF THE AO.S TO CALL FOR COMPUTATION OF INCOME' AND PHYSICAL COPY OF 'RE TURN OF INCOME' FOR KEEPING ON RECORD ALONG WITH OTHER DOCUMENTS.THAT IT DID NOT MEAN THAT THE AO DID NOT HAVE THE 'RETURN OF INCOME' WITH HIM FOR MAKING ASSESSMENT,THAT THE FIGURE OF SALARY INC OME AND TOTAL INCOME WERE CORRECTLY ADOPTED BY THE AO,THAT IT ESTABLISHED THAT THE AO HAD ACCES S TO THE E-FILED RETURN,THAT THE ASSESSEE HAD FILED E-RETURN,THAT THE DETAILS OF WHICH WERE ALWAYS AVAI LABLE TO THE AO ON THE ITD SYSTEM OF THE PURPOSES OF ANY PROCEEDINGS UNDER THE ACT,THAT THE ASSESSEE HAD SUBMITTED A COPY OF NOTICE U/S.142(1),DATED 12.08.2011,TO POINT OUT THAT THE A O HAD CALLED FOR A CERTIFIED COPY OF 'RETURN OF INCOME' AND OTHER DETAILS AND HAD ALLEGED THAT THE AO ISSUED NOTICE WITHOUT EXAMINING THE RETURN OF INCOME AND CONDITIONS PRECEDENT TO MAKING ASSESS MENT U/S.144 DID NOT EXIST,THAT THE ARGUMENT RAISED BY THE ASSESSEE WOULD GO AGAINST HIM,THAT A DETAILED QUESTIONNAIRE WAS ISSUED BY THE AO ALONG WITH NOTICE U/S.142(1) CALLING FOR A NUMBER O F SPECIFIC DETAILS AND EVIDENCES WHICH WAS DULY SERVED ON THE ASSESSEE, THAT SAME WERE NOT COMPLIED WITH BY THE ASSESSEE,THAT THE AO WAS FULLY JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 144 AND MAKING THE ASSESSMENT,THAT OTHER NOTICES ISSUED BY THE AO WERE NOT COMPLIED WITH,THAT THE OR DER U/S.144 WAS THEREFORE LEGALLY VALID. IN THE ASSESSMENT ORDER, THE AO HAD MADE AN ADDITIO N IN RESPECT OF INVESTMENT OF RS.15,00,000/- IN MUTUAL FUND AND EXPENSES INCURRED THROUGH CREDIT CARD AMOUNTING TO RS.5,98,285/-, TREATING BOTH AS UNEXPLAINED EXPENDITURE.DURING APPELLATE PR OCEEDINGS,THE ASSESSEE SUBMITTED THAT CERTAIN 3 ITA NO. 4530/M/2014 VINAY VERMA DETAILS,FOR EXPLAINING THE INVESTMENT IN MUTUAL FUN D,WERE VERIFIED BY THE AO IN REMAND PROCEEDINGS,THAT THE AO HAD FOUND THAT THE INVESTME NTS IN MUTUAL FUND WERE DULY EXPLAINED,THAT OUT OF THE EXPENSES INCURRED THROUGH CREDIT CARD OF RS.5,98,285/-THE ASSESSEE COULD FURNISH SOURCES OF PAYMENT ONLY TO THE EXTENT OF RS.2,57,76 3/-,THAT THE SOURCES IN RESPECT OF THE BALANCE PAYMENT OF RS.3,41,522/- WERE NOT EXPLAINED BY THE ASSESSEE,THAT ONE MORE OPPORTUNITY WAS GRANTED TO THE ASSESSEE TO GET THE BALANCE PAYMENT, THAT THE AO VIDE HIS REPORT,DATED 25. 02. 2014, GAVE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO APPEAR BEFORE HIM AND EXPLAIN THE SOURCE OF REMAINING PAYMENT, THAT DESPITE AMPLE OPPORTUNITIES GIVEN THE ASSESSEE FAILED TO APPEAR AND GET THE EVIDENCES,THAT THE CLAIM OF THE ASSESSEE THAT S INCE HE HAD SHIFTED TO DELHI AND DUE TO OTHER REASONS THERE WAS NON-ATTENDANCE BEFORE THE AO IN R EMAND PROCEEDINGS WAS NOT A VALID EXCUSE. THE FAA HELD THAT THE INVESTMENT IN MUTUAL FUND WAS FULLY EXPLAINED AND HE DIRECTED THE AO TO DELETE THE ADDITION OF RS.15,00,000/- MADE IN THIS REGARD. HOWEVER, IN RESPECT OF THE ADDITION FOR UNEXPLAINED SOURCES OF EXPENSES THROUGH CREDIT CARD MADE AT RS.5,98,285/-,HE HELD THAT SOURCE OF PAYMENT HAD NOT BEEN SUBMITTED FOR VERIFICATION BEF ORE THE AO DURING ASSESSMENT PROCEEDINGS AND THE EVIDENCE SOUGHT TO BE ADMITTED DURING APPEL LATE PROCEEDINGS AS ADDITIONAL EVIDENCE HAD NOT BEEN EXPLAINED FULLY AND GOT VERIFIED BY THE AO IN REMAND PROCEEDINGS,THAT SUCH UNVERIFIED EVIDENCES COULD NOT BE ACCEPTED AS VALID EVIDENCE T O ALLOW RELIEF. HE DIRECTED THE AO TO RESTRICT THE ADDITION TO RS. 3,41,522/-, I.E. PAYMENTS WHICH HAVE NOT BEEN GOT VERIFIED BY THE APPELLANT IN REMAND PROCEEDINGS. THE FAA NOTICED THAT THERE WERE SUBSTANTIAL DEPOSIT S IN ASSESSEE' S BANK ACCOUNT WITH SBI, MUCH IN EXCESS OF INCOME AS PER RETURN,THAT SAME WERE NO T EXPLAINED BEFORE THE AO IN REMAND PROCEEDINGS.ACCORDINGLY,VIDE NOTICE OF ENHANCEMENT, THE FAA ASKED THE ASSESSEE TO EXPLAIN THE SOURCES OF THESE DEPOSITS (ABOVE RS. 1 LAKH EACH) A GGREGATING TO RS. 1.07 CRORES.IN CASE OF FAILURE TO EXPLAIN,IT WAS PROPOSED THAT SUCH DEPOSITS IN EX CESS OF SALE PROCEED OF HOUSE PROPERTY I.E. RS. 33,66,768(1.07CRORES -0.73CRORES) WOULD BE ADDED TO THE INCOME ASSESSED BY THE AO.AS PER THE FAA,IN RESPONSE, VIDE LETTER DATED 29.04.2014, THE ASSESSEE TRIED TO EXPLAIN ONLY THE TWO DEPOSITS OF RS. 4 LAKHS AND RS. 30 LAKHS.HE HELD THAT NO EXP LANATION HAD BEEN FURNISHED WITH RESPECT TO THE REMAINING DEPOSITS OF OVER RS 73 LAKHS,THAT EVEN FO R THOSE TWO DEPOSITS ONLY SKETCHY, UNSUBSTANTIATED AND INCOMPLETE DETAILS HAD BEEN FUR NISHED WHICH DID NOT EXPLAIN THE DEPOSITS SATISFACTORILY OR DISCHARGE THE ONUS CAST ON THE AS SESSEE,THAT NO CONFIRMATION FROM THE CONCERNED PARTIES HAD BEEN FILED,THAT THE ASSESSEE HAD FAILED TO SATISFACTORILY EXPLAIN THE TWO DEPOSITS AGGREGATING TO RS 34 LAKHS AND IN RESPECT OF THE OT HER DEPOSITS OF RS 73 LAKHS NO EXPLANATION HAD BEEN FURNISHED,THAT THE DEPOSITS IN THE SBI ACCOUNT OF THE ASSESSEE ARE TREATED AS UNEXPLAINED,AS PROPOSED IN THE NOTICE OF ENHANCEMENT.AS A RESUL,TH E SUM OF RS 33,66,768/-,BEING DEPOSITS IN EXCESS OF SALE PROCEEDS OF HOUSE PROPERTY,WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE.THE FAA ALSO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C)FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE RETURN, THE ASSESSEE HAS SHOWN LONG TERM CAP ITAL GAIN ON SALE OF RESIDENTIAL PROPERTY AS UNDER: SALE PROCEEDS 73,96,133 LESS: INDEXED COST OF ACQUISITION (1,50,000 X 582/4 97) 1,75,654 LESS: INDEXED COST OF IMPROVEMENT (30,54,168 X 582/ 497) 32,81,069 LONG TERM CAPITAL GAIN 39,39,410 LESS: EXEMPTION U/S 54 37,68,370 TAXABLE LONG TERM CAPITAL GAIN: 1,71,040 IN THE NOTICE OF ENHANCEMENT,THE FAA ASKED THE ASSE SSEE TO GIVE DETAILS AND EVIDENCE OF 'COST OF IMPROVEMENT' AS ALSO OF INVESTMENT FOR THE PURPOSE OF SECTION 54. IN RESPONSE,THE ASSESSEE ACCEPTED THAT HE DID NOT HAVE ANY SUPPORTING DOCUME NTS TO JUSTIFY THE CLAIM OF 'COST OF IMPROVEMENT'.AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE,THE FAA HELD THAT THE DEDUCTION CLAIMED BY THE ASSESSEE IN COMPUTATION OF LTCG WAS UNSUBSTANTIATED AND/OR NON-GENUINE,THAT THE INDEXED COST OF IMPROVEMENT CLAIMED AT RS 32,81,069 /- WAS DIRECTED TO BE DELETED. SIMILARLY FOR THE CLAIM OF DEDUCTION U/S 54,THE FAA OBSERVED THAT ALTHOUGH THE NEW FLAT WAS PURCHASED BY THE ASSESSEE JOINTLY WITH HIS WIFE,YET ENTIRE COST WAS CLAIMED AS DEDUCTION IN 4 ITA NO. 4530/M/2014 VINAY VERMA ASSESSEE'S CASE.HE HELD THAT NOTHING HAD BEEN FURNI SHED TO ESTABLISH THAT THE ASSESSEE HAD 100% FINANCIAL OWNERSHIP OF THE NEW FLAT,THAT THE BANK A CCOUNTS OF THE ASSESSEE DID NOT SHOW PAYMENTS TOWARDS FULL COST OF THE FLAT.IN THE ABSENCE OF ANY SUPPORTING DETAILS, THE SHARE OF ASSESSEE IN THE NEW FLAT PURCHASED WAS TAKEN AT 50% AND DEDUCTION U /S 54 WAS ACCORDINGLY DIRECTED TO BE RESTRICTED TO RS.18,84,185/-INSTEAD OF RS 37,68,370 /-CLAIMED IN THE RETURN.THE LTCG ON SALE OF RESIDENTIAL PROPERTY WAS ASSESSED AT RS 53,36,294/- INSTEAD OF RS 1,71,040/- SHOWN IN THE RETURN AND THE INCOME.HE MADE ENHANCEMENT OF RS.51,65,254/ -. 5. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)CONTENDE D THAT THE FAA HAD MADE ADDITION UNDER A NEW SOURCE OF INCOME,THAT SAME WAS NOT PERMISSIBL E AS PER THE JUDGMENTS OF SHAPOORJI PALANOJI (44ITR891)AND RAI BAHADUR HARDUTROY MOTILAL CHAMARI A (66 ITR 443),THAT IF THE AO HAD NOT MADE INQUIRY IT WAS A FIT CASE TO INITIATE REVISION ARY PROCEEDINGS U/S.263 OF THE ACT,THAT ENHANCEMENT OF INCOME BY THE FAA WAS NOT PROPER COU RSE OF ACTION IF HE WAS NOT SATISFIED WITH THE INQUIRIES MADE BY THE AO,THAT THE ASSESSEE WAS IN DELHI DUE TO ILL HEALTH OF HIS MOTHER,THAT DUE TO THAT HE COULD NOT APPEAR BEFORE THE AO.DEPAR TMENTAL REPRESENTATIVE(DR)STATED THAT NO NEW SOURCE OF INCOME WAS TAXED BY THE FAA,THAT THE FAA CALLED FOR A REMAND REPORT FROM THE AO AND ACCORDINGLY HAD EXAMINED THE BANK STATEMENT, THAT THE ASSESSEE HAD SOLD FLAT AND INVESTED IN NEW HOUSE PROPERTY,THAT INQUIRY ABOUT THE SAID T RANSACTION WAS MADE AS PER THE PROVISIONS OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL.WE FIND THAT THE AO HAD MADE ADDITIONS ON ACCOUNT OF UNEXPLAINED EXPENDITURE OF CREDIT CARD TRANSACTIONS AND UNEXPLAINED INVESTMENT IN MUTUAL FUNDS,THAT FAA HAD ENHANCED TH E INCOME OF THE ASSESSEE ON ACCOUNT OF DEPOSITS IN EXCESS OF SALE PROCEEDS OF HOUSE PROPER TY.FROM THE ORDER OF THE AO IT IS EVIDENT THAT HE HAD NOT TOUCHED THE ISSUE OF SALE PROCEEDS OF HO USE PROPERTY THOUGH THE MATTER WAS SELECTED FOR SCRUTINY TO MAKE INQUIRY ABOUT DEDUCTION CLAIMED U/ S.54 OF THE ACT.AS PER THE SETTLED PRINCIPLES OF TAXATION JURISPRUDENCE THE FAA HAS ALL THE POWER TH AT AN AO HAS,BUT HE CANNOT MAKE AN ADDITION BY PROCESSING A NEW SOURCE OF INCOME.IT IS SAID THA T THE FAA IS NOT ALLOWED TO TRAVEL OUTSIDE THE RECORD, I.E., THE RETURN MADE BY THE ASSESSEE OR TH E ASSESSMENT ORDER OF THE AO WITH A VIEW TO FIND OUT NEW SOURCES OF INCOME AND THE POWER OF ENHANCEM ENT UNDER SECTION 151(2) OF THE ACT IS RESTRICTED TO THE SOURCES OF INCOME WHICH HAVE BEEN THE SUBJECT-MATTER OF CONSIDERATION BY THE INCOME-TAX OFFICER FROM THE POINT OF VIEW OF TAXABI LITY. IN THIS CONTEXT, CONSIDERATION DOES NOT MEAN INCIDENTAL OR COLLATERAL EXAMINATION OF ANY MA TTER BY THE AO IN THE PROCESS OF ASSESSMENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW THAT THE AO HAD APPLIED HIS MIND TO THE PARTICULAR SUBJECT-MATTER OR THE PARTICULAR SOURCE OF INCOME WITH A VIEW TO ITS TAXABILITY OR TO ITS NON TAXABILITY AND NOT TO ANY INCIDENTAL CONNECTION .AS STATED EARLIER,THE AO HAD NOT CONSIDERED THE ISSUE FOR WHICH THE FAA HAD MADE ENHANCEMENT.AS THE ENHANCEMENT RELATES TO NEW SOURCE OF INCOME,THEREFORE,FOLLOWING THE JUDGMENT OF HONBLE APEX COURT DELIVERED IN THE CASE OF RAI BAHADUR HARDUTROY MOTILAL CHAMARIA,WE ALLOW THE GRO UND RAISED BY THE ASSESSEE.IN THE ABOVE REFERRED CASE THE HONBLE COURT HAD HELD AS UNDER: THE APPELLATE ASSISTANT COMMISSIONER HAS NO JURISDI CTION UNDER SECTION 31(3) OF THE INDIAN INCOME-TAX ACT, 1922, TO ASSESS A SOURCE OF INCOME WHICH IS NOT DISCLOSED EITHER IN THE RETURNS FILED BY THE ASSESSEE OR IN THE ASSESSMENT ORDER. I T IS NOT THEREFORE OPEN TO THE APPELLATE ASSISTANT COMMISSIONER TO TRAVEL OUTSIDE THE RECORD, I.E., TH E RETURN MADE BY THE ASSESSEE OR THE ASSESSMENT ORDER OF THE INCOME-TAX OFFICER, WITH A VIEW TO FIN DING OUT NEW SOURCES OF INCOME AND THE POWER OF ENHANCEMENT UNDER SECTION 31(3) IS RESTRICTED TO TH E SOURCES OF INCOME WHICH HAVE BEEN THE SUBJECT-MATTER OF CONSIDERATION BY THE INCOME-TAX O FFICER FROM THE POINT OF VIEW OF TAXABILITY. IN THIS CONTEXT 'CONSIDERATION' DOES NOT MEAN 'INCIDEN TAL' OR 'COLLATERAL' EXAMINATION OF ANY MATTER BY THE INCOME-TAX OFFICER IN THE PROCESS OF ASSESSM ENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW THAT THE INCOME-TAX OFFICER APPLIED H IS MIND TO THE PARTICULAR SUBJECT-MATTER OR THE PARTICULAR SOURCE OF INCOME WITH A VIEW TO ITS TAXA BILITY OR TO ITS NON-TAXABILITY AND NOT TO ANY INCIDENTAL CONNECTION. 5 ITA NO. 4530/M/2014 VINAY VERMA 7. NEXT TWO GROUNDS OF APPEAL ARE ABOUT NOT GIVING REA SONABLE TIME TO PRODUCE THE DETAILS IN SUPPORT OF THE CLAIM MADE BY THE ASSESSEE WITH REGA RD TO DEPOSIT IN PASS BOOK AND PAYMENT AGAINST CREDIT CARDS. 8. AS PER THE AR THE FAA HAD MADE ADDITIONS TO THE INC OME OF THE ASSESSEE WITHOUT GIVING HIM OPPORTUNITY OF PROPER HEARING,THAT THE ASSESSEE HAD THE EVIDENCES THAT THE ENTRIES APPEARING IN THE PASS BOOK REPRESENTED HIS EXPLAINED MONEY,THAT THE FAA HAD REFUSED THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE WITH REGARD TO THE CREDIT CARD PAYMENTS,THAT THE FAA ONLY CONSIDERED ONE SIDE OF THE BANK STATEMENT,THAT FOR ARRIVING AT A LOGICAL CONCLUSION CREDIT AND DEBITS SIDES SHOULD HAVE BEEN LOOKED IN TO,THAT THE FAA IGNORED THE SECOND REPORT SUBMITTED BY THE AO,THAT EVIDENCES WERE FURNISHED ABOUT THE ADDITION OF RS.3 0 LAKHS,THAT THE SPOUSE OF THE ASSESSEE HAD NOT CLAIMED DEDUCTION U/S.54 OF THE ACT.HE REFERRED TO THE DECISION OF MUMBAI TRIBUNAL DELIVERED IN THE CASE OF SHAH RUKH KHAN(PG.47 OF THE PAPER BOOK) .DR SUPPORTED THE ORDER OF THE FAA. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE DOCUMENTS FURNISHED BY THE ASSESSEE IN FORM OF ADDI TIONAL EVIDENCE GIVE DETAILS OF BALANCE RECEIVED FROM CERTAIN BUILDER AS WELL AS PAYMENT RE CEIVED BY THE ASSESSEE,AMOUNTING TO RS.30 LAKHS.OTHER PAPERS ARE RELEVANT FOR EFFECTIVE DISPO SAL OF THE ISSUES RAISED BY THE ASSESSEE.AS THE AO OR THE FAA DID NOT HAVE BENEFIT OF GOING THROUGH THE DOCUMENTS,THEREFORE,IN THE INTEREST OF JUSTICE WE ARE RESTORING BACK THE MATTERS,RELATED W ITH GROUND NO.5 AND 6,TO FILE OF THE AO FOR FRESH ADJUDICATION.BOTH THE GROUNDS ARE ALLOWED IN FAVOUR OF THE ASSESSEE,IN PART. AS A RESULT, APPEALS FI LED BY THE ASSESSEE STANDS PARTLY ALLOWED. 9): '() ; < + 7 8): = + ) >?. ORDER PRONOUNCED IN T HE OPEN COURT ON 25TH,MARCH,2015 . 8 + -.# A B' 25 EKPZ , 201 5 . + 7 C SD/- SD/- ( / VIJAY PAL RAO) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, B' /DATE: 25.03 . 2015. SK 8 8 8 8 + ++ + &) &) &) &) D #) D #) D #) D #) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ E F , 4. THE CONCERNED CIT / E F 5. DR C BENCH, ITAT, MUMBAI / G7 &)' LH LHLH LH , . . . 6. GUARD FILE/ 7 9 ' ' ' ') )) ) &) &)&) &) //TRUE COPY// 8' / BY ORDER, H / > DY./ASST. REGISTRAR , /ITAT, MUMBAI.