Case Law Details
ACIT Vs Versatile Polytech P. Ltd (ITAT Delhi)
Conclusion: Although the powers of the CIT(A) were co-terminus with that of the powers of AO, yet, it had jurisdiction only on those items which had been considered by AO irrespective of the fact whether the issue was subject matter of appeal or not. Thus, where AO in the assessment order had neither discussed the issue nor made any addition u/s 56(2)(viib), CIT(A) had no power to adjudicate the issue by introducing a new source of income and his order had to be confined to those items of income which was subject matter of original assessment.
Held: AO in the instant case made addition of Rs.3,73,00,120/- u/s 68 on account of share application money received by assessee on the ground that assessee failed to establish the identity, credit worthiness and genuineness of the parties wherever funds received by the investors of assessee who were also group companies of assessee group. CIT(A) deleted the addition of Rs.14,34,620/- on the ground that no incriminating material was found during the course of search and, therefore, addition of the same could not be made u/s 153A. However, department invoked the Rule 27 of ITAT Rules and tried to argue the relief granted by the CIT(A). It was held in view of finding while deciding the appeal for assessment year 2009-10, the argument of the department that the relief granted by CIT(A) should be reversed did not hold good. Since no incriminating material were found during the course of search and the assessment was completed and the order was passed u/s 143(1) and the assessment was not pending on the date of search, therefore, while deciding the appeal for the assessment year 2009-10, the addition made by AO was liable to be quashed. Coming to the addition made by CIT(A) by invoking the provisions of section 56(2)(viib) was concerned, it was an admitted fact that AO in the body of the assessment order had neither discussed this issue nor made any addition on this account. Although the powers of the CIT(A) were co-terminus with that of the powers of AO, yet, it had jurisdiction only on those items which had been considered by AO irrespective of the fact whether the issue was subject matter of appeal or not. However, it did not have any jurisdiction over an issue which had not been considered by AO. In case it was accepted that CIT(A) had power to consider an issue which was not considered by AO then, the provisions of section 263 or 147 would become otiose. Thus, considering the fact that AO in the assessment order had neither discussed this issue nor made any addition u/s 56(2)(viib), therefore, CIT(A) had no power to adjudicate the issue by introducing a new source of income and his order had to be confined to those items of income which was subject matter of original assessment.
FULL TEXT OF THE ITAT JUDGEMENT
ITA No.2257/Del/2018 filed by the Revenue is directed against the order dated 5th January, 2018 of the CIT(A)-26, New Delhi, relating to assessment year 2009-10.
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