Smt. Sarika Jain Vs CIT (Allahabad High Court)
The appeal under Section 260A of the Income Tax Act challenged the Income Tax Appellate Tribunal’s order dated 20.12.2007. The issue before the High Court was whether the Tribunal was justified in adding ₹12,20,000 under Section 69A after deleting the addition made by the Assessing Officer and confirmed by the CIT(A) under Section 68. The assessee had introduced capital of ₹12,20,000 in a partnership firm, explaining it as gifts of ₹5,00,000 and ₹7,20,000 received through banking channels from two donors, supported by gift deeds and statements recorded under Section 131. The Assessing Officer treated the gifts as non-genuine and added the amount under Section 68, which was affirmed by the CIT(A), although the CIT(A) accepted the identity and creditworthiness of the donors and the completeness of the documentation. The Tribunal held that the addition under Section 68 could not be sustained but proceeded to treat the amount as income under Section 69A. The High Court held that under Section 254(1), the Tribunal’s jurisdiction is confined to the subject matter of the appeal. Since the dispute before the Tribunal concerned only the addition under Section 68, the Tribunal travelled beyond the scope of the appeal by making an addition under Section 69A. Holding that the Tribunal was not competent to make such an addition, the High Court set aside the Tribunal’s order dated 20.12.2007, remanded the matter to the Tribunal for fresh decision in accordance with law, and allowed the appeal.
