ORDER
Joginder Pall, A.M.
1. This is an appeal of the assessee filed against the order of the CIT(A). Bhatinda, for the asst. yr. 1993-94.
2. First effective issue raised in this appeal relates to enhancing the income of the assessee by Rs. 20,23,053 besides income of Rs. 3,58,679 assessed in original assessment. The facts of the case are that the IT authorities had carried out survey action under Section 133A at the premises of the assessee on 10th March, 1993. It is the allegation of the assessee that during the course of survey, the assessee was pressurised to surrender income of Rs. 2 lakhs. The assessee did not succumb to such pressure. Thereafter, the assessee reported the matter to chamber of commerce. Such action resulted in Jammu Bandh on the call given by the business community and the stock inventory could not be drawn and completed. Thereafter, the IT authorities converted the survey action into search and seizure action under Section 132(1) of the IT Act, 1961, and thereafter stock inventory was prepared as per which the stock worked out to Rs. 15,88,757 as on 13th March, 1993. The assessee also filed stock list indicating the value of closing stock as on 31st March, 1993, at Rs. 13,76,975. After making adjustments for the purchases and sales made during the period from 13th March, 1993 to 31st March, 1993, the AO worked out the increase in the closing stock during the period at Rs. 2,22,514. After reducing the same from the stock shown by the assessee at Rs. 13,76,975 on 31st March, 1993, the AO worked out the closing stock as per books on the date of survey, i.e., 13th March, 1993, at Rs. 11,54,461, i.e., (Rs. 13,76,975 – Rs. 2,22,514). Thus, the AO found that there was difference of Rs. 4,34,297 in the stock as per books and as found on 13th March, 1993. The AO also observed certain defects and discrepancies in the books of account. The assessee had shown GP rate of 7.49 per cent on sales of taxable goods and 2.39 per cent on local sales. However, according to the AO the GP rate worked out to 14 per cent by including the value of closing stock as computed by the search party at Rs. 15,88,757. However, he observed that neither the books of account of the assessee nor the stock inventory drawn at the time of survey was reliable and, therefore, income was required to be estimated by rejecting the book results. The AO also enhanced the sale of the assessee by Rs. 10 lakhs as done for the asst. yr. 1992-93 and after rejecting the book results and by applying GP rate of 8.5 per cent, the AO made trading addition of Rs. 2 lakhs. Besides, the AO also made an addition of Rs. 1,51,000 on account of difference in the cost of construction of the office building as shown in the books of account and as determined by the Valuation Officer of the Department.
3. Being aggrieved, the assessee carried the matter in appeal before the CIT(A). The learned CIT(A) vide his Order dt. 26th March, 1996, reduced the trading addition to Rs. 75,000 and allowed a relief of Rs. 1,25,000. The addition of Rs. 1,51,000 made on account of difference in the cost of construction as shown in the books and as determined by the Valuation Officer was deleted by the CIT(A).
4. The Revenue filed an appeal against the order of the CIT(A) both on the point of deleting the addition of Rs. 1,51,000 made on account of difference in the cost of construction as shown in the books and as determined by the Valuation Officer, and also allowing a relief of Rs. 1,25,000 in respect of trading addition. It was argued before the Tribunal that the learned CIT(A) had allowed a relief of Rs. 1,25,000 in a summary manner without applying his mind and passed a non-speaking order. After hearing both the parties, the Tribunal vide its order dt. 29th May, 2003, in ITA No. 502/Asr/1996 for the asst. yr. 1993-94 upheld the order of the CIT(A) on the point of deleting the addition of Rs. 1,51,000 made on account of difference in the cost of construction. However, as regards allowing relief of Rs. 1,25,000 from trading addition, the Tribunal observed in para 3.6 of its order that the learned CIT(A) had not assigned any cogent reasons in reducing the trading addition from Rs. 2 lakhs to Rs. 75,000. Besides, proper opportunity of being heard had not been allowed to the assessee while deciding the appeal. The Tribunal held that such order was not valid in the eyes of law and, therefore, issue was restored to the file of the CIT(A) for deciding the same afresh on merits and in accordance with law and after allowing reasonable opportunity of being heard. The relevant findings given in para 3.6 of the order of the Tribunal are as under:
3.6 We have considered the rival submissions and also gone through the material available on the records. In our view, there is merit in this contention of the learned Departmental Representative that the order of the learned CIT(A) is non-speaking order. It is well-settled that the order/judgment unsupported by reasons is not judgment in the eyes of law. It is also true that the reasons are links between the material on record and conclusion arrived at by the Court/appellate authority. In our view, the learned CIT(A) while reducing the addition from Rs. 2 lakhs to Rs. 75,000 has not assigned any cogent reason. In our view, the learned CIT(A) should have made reasoning in support of his conclusion. It is also apparent from the record that the learned CIT(A) had not afforded an opportunity of being heard to the assessee. It seems that the submission of the AO had simply been accepted by the learned CIT(A). Considering the totality of the facts, we are of the view that the learned CIT(A) had not passed any appropriate order in the eyes of law. We, therefore, deem it proper to set aside the order of the learned CIT(A) and remand the matter back to his file with the directions to decide the issue afresh on merits in accordance with law. It is also made clear that a reasonable opportunity of being heard be given to both the parties. These two grounds, i.e., ground Nos. 1 and 2 are accordingly disposed of.
5. Subsequently, CIT(A) took up the set aside appeal proceedings. During the course of such proceedings, it appears that the learned CIT(A) issued enhancement notice on 17th Aug., 2004, under Sub-section (2) of Section 251 proposing to enhance assessee’s income by adopting GP of Rs. 13,20,564. In the enhancement notice, the learned CIT(A) mentioned that closing stock as calculated by the survey and search party was at Rs. 15,88,757 and if this figure was adopted, the GP would work out at Rs. 13,20,564. It was also stated in the show-cause notice that the AO had wrongly allowed an expenditure of Rs. 64,000 estimated to have been incurred outside the books of account as there was no justification in allowing such deduction. The assessee submitted a detailed reply vide its letter dt. 27th Aug., 2004, stating therein that the inventory of the stock was drawn only in one hour as there was a law and order problem because the entire trading community of Jammu had called Jammu Bandh. Moreover, the AO had checked various items with reference to purchases and sales and had recorded in para 14 of the assessment order that in none of the items, the assessee had earned GP rate of 14 per cent. It was also submitted that the AO enhanced the sale by Rs. 10 lakhs without any basis and, therefore, the proposed notice for enhancement of income of Rs. 13,20,564 was absolutely baseless and without any material. These submissions did not find favour with the CIT(A) who observed that the assessee was dealing in sanitary-ware and hardware items. The contention of the assessee was that inventory was drawn in one hour on 10th March, 1993, was factually incorrect because the search party remained present outside the premises of the assessee till 13th March, 1993. Such inventory was drawn both on 10th March, 1993, and completed on 13th March, 1993. He further observed that the assessee misled the AO that the GP rate did not work out at 14 per cent in respect of any of the items. He observed that the GP rate worked out at 14 per cent after the figure of Rs. 15,88,757 was adopted as closing stock. He also observed that the AO was prevailed upon to such a degree that he framed the assessment on an imaginary statement from the side of Captain B.B. Gupta, Inspector, who was associated with the survey as well as survey party. He, therefore, had no authority, no occasion, no possibility of having stated in the manner incorrectly utilized by the AO. He found that assessment was completed by the AO in a collusive manner with a view to help the assessee. He also noted specific defects in para 6 on p. 7 of the impugned order. The learned CIT(A) observed that the AO had himself pointed out variation in the closing stock to the tune of Rs. 2,22,514 for remaining period of 18 days, i.e., 13th March, 1993 to 31st March, 1993. If the same is included the variation would work out to Rs. 20,23,053 for unaccounted stock not disclosed in the regular IT return. Accordingly, he enhanced the income by Rs. 20,23,053 though in the show-cause notice, he proposed to enhance income by Rs. 13,20,564. It is relevant to reproduce hereunder paras 6 and 7 of the impugned order:
6. Defects pointed out by appellant unwittingly vide letter dt. 17th May, 1995, addressed to Dy. CIT, Special range, Jammu, the appellant had highlighted the following defects in stock taking:
(i) Counting of certain stock was not possible without the help of labour, which was neither available nor arranged by the Department or the appellant.
(ii) Many items had covering of coaltar and were not counted for the reason that the clothes of the individuals would be spoiled in the course of counting.
(iii) GI pipes tied in bundles and could not be counted before segregation, which was not done by the party,
(iv) China wares cannot be counted unless the coverage of straw packing is removed. The bundles were not unpacked.
(v) GI fitting could not be counted unless the packing bags are opened and segregation as per different sizes. This was again not done by the search party.
(vi) Some miscellaneous items could not be counted unless containers were opened and segregated. No container was opened.
(vii) This was not done by the Department.
(viii) Each page of the stock statement should have been signed by both the parties, which was not done.
(ix) The remarks given by the appellant at the concluding page of inventory list were as under:
‘Approximate counting by the income-tax staff without our presence’…’actually not counted’.
6.1 In view of the above discrepancies, I hold that whatever has actually been counted is correct and authoritative since the appellant openly and clearly admits that the inventories were prepared from catalogues, collected by the Department from the appellant (in size and specification).
6.2 The above discrepancies clearly lead me to one conclusion alone: If at all there is any error and discrepancy embedded in the inventories its scales deviate heavily against the Revenue. Much had been left out and look who point it out the appellant himself. But whatever has been counted is without any blame since, once again, appellant himself pointed out that the same is as per his guidance given from the catalogues and other authoritative source. It is no doubt a part counting. The items have been counted in 10s and 100s. It implies that main bundles are properly counted but loose material is left out as also that material which remained unpacked, unopened, unsegregated and untouched (as per the open admission of appellant himself). So, I estimate the actual figure of the real stock count would be much higher. I hold on estimate basis from above observations that only 50 per cent of the stock has actually been counted. I, therefore, proceed to adopt the same figure of Rs. 31,77,514 instead of Rs. 15,88,757.
6.3 I may add here that the income-tax recognizes the would ‘assessment’ of income and not computation/determination of the same. The word assessment is not defined and, therefore, we seek the assistance from dictionary entries, which provide meaning of this word as akin to ‘estimate’. So, there is no error in my resorting to estimation.
6.4 Errors do not necessarily lead to rejection of AO’s order in toto.
I may also point out that merely because there is a fault in some computation/calculation/derivation-it does not imply that the total process/conclusion is to be discarded. If there is defect in building we do not demolish it; we amend it. So, I have amended accordingly. The position would have been different if the assessee could point out any of the following type of errors in the inventory making by the Department:
(1) Totalling mistake
(2) Details of items counted twice or thrice
(3) Price adopted by the Department is higher
(4) An item included in inventory but assessee could show from bills, etc. that it is non-existent
(5) Item name is different.
6.5 Since none of the above type of mistakes are pointed out, the errors/ shortcomings in coming do not support the appellant in calculation. On the other hand, the discrepancies considered by me in para 6 as above do essentially force me to conclude one and only one proposition that in stock counting major portion is rather left out. To compensate the same I reiterate that the figure of Rs. 31,77,514, being the double of the figure before me, could be both fair and reasonable.
I may also add here that my predecessor learned CIT(A) had also observed in his order dt. 26th March, 1996, that lack of time, non-co-operative attitude of the appellant and stressful environment together resulted in a situation, which unduly went into the favour of the appellant. His observations are as under:
‘But the inadequacy or deficiency in the calculation of the stock by the Department has only benefited the appellant.”
6.6 This order is not punishment for misbehaviour
The fact of appellant recording his dissent ‘not counted in his presence’ does not help him. His non-co-operative attitude should not win reward for him. Neither do I intend to punish him. I adopt a reasonable and fair figure to the best of my estimate. Punishment if at all would be considered in separate penalty proceedings under Section 271(1)(c) which I initiate hereby in view of clear-cut finding of fact of concealment of particulars of the income and for not including the correct particulars of stock in the computation of income submitted by the appellant in his IT return (as per addition calculated below).
6.7 I also reject the contention that each page of inventory should have been signed separately. Neither law nor the procedure lays down any such condition.
7. Now, this being stock position as on 13th March, 1993, there is further increase of Rs. 2,22,514 estimated by AO for remaining 18 days of the financial year. So, as on 31st March, 1993, the figure would be Rs. 34,00,028. As against this the figure disclosed by the appellant is Rs. 13,76,975 on 31st March, 1993. So, I make an addition of Rs. 34,00,028- Rs. 13,76,975 – Rs. 20,23,053 for unaccounted stock not disclosed in the regular IT return. The income stands enhanced to that extent,
7.1 Although it may seem so at first glance, it is not a high-pitched addition. The manner in which the appellant permitted hooligans to operate from inside his premises, the instance of illegally pushing the entire team of survey out of the building owned and occupied by the appellant and humiliating the ITO/officials and letting them wait outside for days and nights and much more together leads to one solitary conclusion, i.e., the appellant had extremely high stakes in true disclosure of full facts. Moreover, the time during which the survey team was forced to remain outside the premises left ample scope for manipulations. Lest this order be accused of being based on surmises and guess, may here clarify that even Hon’ble Supreme Court permits estimation, guess, surmises in view of their judgment ITR wherein the unaccounted sales of the assessee were detected only for a limited number of days but Hon’ble Supreme Court upheld the addition for the entire year. (Although no AO was present to compute the unaccounted sales for remaining days of the year). It was a pure guesswork so I hold that a reasoned and reasonable dependence on estimate does not vitiate the order and proceedings.
This was the only issue to be decided upon as per Tribunal order. The appeal of the assessee is not only dismissed but also the income gets enhanced.
The assessee is aggrieved by the order of the CIT(A). Hence, this appal before us.
6. The learned Counsel for the assessee, Sh. R.K. Dogra, submitted that at the time of completing original assessment, the AO has made additions of Rs. 3,51,000, i.e., trading addition of Rs. 2 lakhs and Rs. 1.51 lakhs being difference in the cost of construction as shown in the books and as determined by the DVO. The assessment was completed on a total income of Rs. 3,51,680. On appeal, the learned CIT(A) deleted the addition of Rs. 1.51 lakhs and reduced the trading addition from Rs. 2 lakhs to Rs. 75,000. On further appeal by the Revenue against the order of the CIT(A), the Tribunal upheld the order of the CIT(A) for deleting the addition of Rs. 1.51 lakhs. He also placed a copy of the order before us and also drew our attention to pp. 11 and 12 where the order of the CIT(A) for deleting Rs. 1.51 lakhs was upheld by the Tribunal. As regards the relief allowed of Rs. 1.25 lakhs, the Tribunal restored the issue to the file of CIT(A) for deciding the same afresh as the order passed by the CIT(A) was found to be without proper reasoning and without allowing proper opportunity to the assessee. He drew our attention to para 3.6 on pp. 8 and 9 of the order of the Tribunal, where the matter was restored to the file of the CIT(A). Thus, he contended that the issue was restored to the file of CIT(A) for deciding only an addition of Rs. 1.25 lakhs deleted by the CIT(A) at the time of passing first order. He submitted that once the matter was restored to the file of the CIT(A), the jurisdiction of the CIT(A) was confined only to the issue restored to his file. He could not have exceeded his jurisdiction in enhancing the income as the same was beyond his powers. He relied on the following judgments:
(1) CIT v. Late Jawahar Lal Nagpal, Through LRs (1987) 65 CTR (MP) 227 : (1988) 171 ITR 136 (MP)
(2) Sunendm Overseas Ltd v. CIT (1979) 120 ITR 872 (Cal)
(3) CIT v. Mahindm and Co.
(4) CIT v. S.V. Divakar
(5) Elel Hotels and Investments Ltd. v. Jt. CIT (2005) 2 SOT 659 (Mumbai).
Thus, he submitted that the learned CIT(A) exceeded his powers for enhancing the income while deciding the appeal remanded by the Tribunal.
7. The learned Departmental Representative, on the other hand, heavily relied on the order of the CIT(A) and submitted that once the matter was restored to the file of the CIT(A) he was competent to enhance the income of the assessee.
8. We have heard both the parties and carefully considered the rival submissions with reference to facts, evidence and material on record. We have also gone through the orders of the authorities below. From the facts discussed above, it is obvious that at the time of completing the assessment under Section 143(3), the AO had made additions of Rs. 3,51,000, out of which addition of Rs. 1,51,000 was deleted and the order of the CIT(A) was upheld by the Tribunal. As regards trading addition of Rs. 2 lakhs made by the AO, the learned CIT(A) reduced the same to Rs. 75,000 and on appeal filed by the Revenue, the Tribunal only restored the addition of Rs. 1,25,000 to the file of the CIT(A). The assessee had even accepted the addition of Rs. 75,000 (which) was not in appeal before the Tribunal. Now, the question that requires to be considered is whether the CIT(A) had powers to enhance the income during the set aside appeal proceedings when the matter was restored to his file only for a limited purpose of deciding the trading addition. It is no doubt true that as per provisions of Section 251 of the IT Act, CIT(A) is vested with wide powers co-terminus with that of the AO. He could do what the AO could do but has not done. He has powers to confirm, reduce, enhance or annul the assessment. However, such powers of the CIT(A) extend only when the first appeal is before him. However, when the order is set aside or remanded by the Tribunal, the power of CIT(A) remains confined to the issues which have been restored to his file and within directions given by the Tribunal. From the perusal of the order of the Tribunal, we observe that the entire appeal was not restored to the file of the CIT(A) for fresh adjudication. It was only for a limited purpose of deciding the grievance of the Revenue of allowing relief from trading addition by Rs. 1.25 lakhs. As regards the enhancement made by the CIT(A), the same in our view falls outside the scope of powers of CIT(A) because the matter has not come before him for the first time. Earlier, the matter was decided by the CIT(A) where on appreciation of evidence and material on record, the learned CIT(A) thought it proper to reduce the addition to Rs. 75,000. In the present order, the learned CIT(A) has enhanced the income by Rs. 20,23,053, which amounts to review of the first order dt. 26th March, 1996, of the CIT(A). The power to review is not vested with the CIT(A). Therefore, in our view, the order of the CIT(A) for enhancing the income by travelling beyond the directions given by the Tribunal suffers from this infirmity.
9. Besides, once the order was restored by the Tribunal, the scope of powers of the CIT(A) was limited to decide the specific issue restored to his file. He could not have travelled beyond the scope of the directions given by the Tribunal. The following judgments also support this view:
(1) In the case of Surrendra Overseas Ltd. v. CIT (supra), it was held that during the course of set aside assessment proceedings, the scope of powers of the ITO was limited only to the direction given by the first appellate authority. He could not conduct enquiry beyond the direction and make fresh assessment.
(2) In the case of CIT v. Late Jawahar Lal Nagpal (supra), the Hon’ble High Court held that once the assessment was set aside by the AAC with direction to ITO to afford opportunity to assessee to be heard with regard to specific items of income, ITO had no jurisdiction to add new sources of income in fresh assessment.
(3) Similar view was taken by the Rajasthan High Court in the case of CIT v. Mahindra and Co. (supra) and Hon’ble Orissa High Court in the case of CIT v. S.V. Divakar (supra).
All these judgments, no doubt, deal with the scope of powers of the AO in set aside assessment. But the ratio of the same would equally be applicable to the powers of the CIT(A) when the matter is restored to his file by the Tribunal because his powers are co-terminus with that of the AO. In the case of Elel Hotels and Investments Ltd. v. Jt. CIT (supra), where the Tribunal, Bombay Bench, dealt with the scope of powers of CIT(A) in set aside appeal proceedings, it was held that in second round of appeal, the learned CIT(A) had no jurisdiction to give direction to tax another source of income, which had not been taxed by the AO in original assessment. This matter also came to be considered in detail by the Tribunal, Amritsar Bench, in the case of Asstt. CIT v. Sachdeva and Sons in ITA No. 226/Asr/2003 for the asst, yr. 1988-89 [reported at (2005) 97 TTJ (Asr) 1101] and Sachdeva and Sons v. Asstt. CLT, in ITA No. 138/Asr/2003 for the asst. yr. 1989-90 where it was held that once the matter is restored to the file of the CIT(A), the scope of powers of the CIT(A) was confined only to the issue which was restored to his file. He could not travel beyond the scope of directions given by the Tribunal in regard to specific issues. It would be in the fitness of things to reproduce hereunder the findings recorded by the Tribunal in para 13.1 of the said order:
13.1. It is trite law, when the assessment has been set aside on specific issues by the appellate authority, the scope of powers of the authorities concerned to whom the matter has been restored is limited only to issues on which the assessment was set aside by the Tribunal. This view finds support from the judgment of Hon’ble Allahabad High Court in the case of Sri Vindhya Vasini Prasad Gupta v. CIT , where it was held that in a case where matter is remanded by the Tribunal on a limited issue, the ITO’s jurisdiction is confined to such issue alone. The ITO cannot enlarge the scope of proceedings. Even the jurisdictional High Court of Punjab and Haryana in the case of Kartar Singh v. CIT (1978) 111 ITR 184 (P and H) has expressed the same view that when an assessment is set aside by the Tribunal and the case remanded to the ITO, it is not open to him to introduce into the assessment new sources of income so as to enhance the assessment. The Court further observed that any power to enhance is confined to the old sources of income, which were the subject-matters of appeal to the Tribunal, This was also the view of the Hon’ble Calcutta High Court in the case of Kathiar Jute Mills (P) Ltd. v. CIT , where it was also held that once an assessment is set aside by AAC and case remanded to ITO, entire assessment does not become open. The power of the ITO is confined to the point on which the case was remanded. Neither the ITO can deal with such point nor the AAC on appeal can consider such point on remand. Even the apex Court in the case of Pulipati Subbamo and Co. v. AAC has held that the scope of powers of the ITO in a case where the matter is remanded by the appellate authority is confined only to consider only that issue which has been referred to him. In case the AO covers some other issues not remanded to him, he would certainly be transgressing the limits set down by the law. In the case of CIT v. Hope Textiles Ltd. , the Hon’ble Madhya Pradesh High Court has also held that when the matter is set aside by the appellate authority on a specific issue, the AO cannot make further additions on points which have not been restored to his file by the appellate authority. This issue also arose before the Hon’ble Allahabad High Court in the case of S.P. Kochhar v. , where two questions were considered, i.e., whether, after remand of the case by the Tribunal, ITO could have gone beyond the directions given in the remand order and look into the matters which were not subject-matters of appeal before the Tribunal and second whether, a notice under Section 148 could be issued when the assessment proceedings were still pending. The Hon’ble High Court held that where an assessment is set aside by the Tribunal and remanded to the ITO, it is not open to him to introduce into the assessment new sources of income so as to enhance the assessment. Any power to enhance is confined to the old sources of income, which were the subject-matters of appeal of the Tribunal. As regards the second issue, the High Court held that so long the assessment is pending, the assessing authority cannot have any such ‘reason to believe’ that income for the year has escaped the assessment. Thus, the picture that emerges from the above discussion is that once the assessment is set aside by the Tribunal, the scope of powers of the ITO was confined only to issues, which were remanded to him. When we apply the ratio of these judgments to the present case, it is clear that while completing the set aside assessment, the AO could have not covered the present addition made by the AO by initiating the reassessment proceedings by issue of notice on 24th March, 1999, as such course of action on the part of the AO would have been illegal and beyond the scope of powers conferred under the Act.
Thus, from the above, it is absolutely clear that once the order was restored to the file of the CIT(A) for deciding the addition of Rs. 1,25,000, the enhancement so made by the CIT(A) is without jurisdiction, illegal and void ab initio.
10. Even otherwise, we find that in the show-cause notice the learned CIT(A) proposed to enhance the income by Rs. 13,20,564. But in the order, the learned CIT(A) enhanced the income by Rs. 20,23,054, i.e., much beyond what he had proposed in the show-cause notice. This fact shows that the learned CIT(A) was swayed by the feeling of personal bias and prejudice against the assessee. This approach and attitude do not befit to a quasi judicial authority of the rank of a CIT(A). If the assessee had obstructed the IT authorities in the legal discharge of their functions, it amounts to an offence for which prosecution proceedings could be separately launched against the assessee. Even action under the criminal law could be taken against him. But this does not and ought not affect the mind of CIT(A) while deciding the appeal. Such approach affects the merits of such order. In any case there are other provisions of the Act where action can be taken by the appropriate authorities under Section 147 or 263 if the facts of the case so warrant. It is not necessary that such action can be taken only by CIT(A) more so, when he was dealing with limited issue of addition of Rs. 1,25,000 restored by the Tribunal.
11. Even on merits, we do not find any justification for enhancing the income. by Rs. 13,20,564 mentioned in the enhancement notice. The AO had made an addition of Rs. 2 lakhs by applying GP rate of 8.5 per cent. Now, even if GP rate of 14 per cent was to be applied on turnover of Rs. 1.07 crore, further addition on this account would have worked out to Rs. 5.85 lakhs. As per AO closing stock as per books worked out to Rs. 11,54,461 as against found by the survey party at Rs. 15,88,757. At the most, addition of Rs. 4.24 lakhs could have been made on the excess stock. Since no such addition was made by the AO at the time of completing the original assessment, the CIT(A) could have not made any such addition as it would have amounted to making addition for a new source, i.e., under Section 69. This power is not vested with the CIT(A) even in the first round of appeal much less when the matter was restored to his file by the Tribunal, Thus, at the most, addition of Rs. 5.85 lakhs could have been possible. But by no stretch of imagination, an addition of Rs. 13,20,564 could have been made. As regards enhancement of Rs. 20,23,053 finally made, the same is without any basis. It is wrong to assume that since complete stock inventory was not allowed to be drawn at the time of survey the stock must be double the amount of inventory drawn by the survey/search party. These are only imaginary figures which bear no relationship with the purchases and sales in the books of account. Besides, further enhancement made by the CIT(A) is illegal because the learned CIT(A) has not issued any further show-cause notice as required under Section 251(2) of the Act.
12. In the light of these facts and circumstances of the case and legal position discussed above, we find no merit in the addition of Rs. 20,23,053 enhanced by the CIT(A) except addition of Rs. 2 lakhs made by the AO at the time of completing the assessment. Accordingly, we quash the order of the CIT(A) for enhancing the income and consequently addition made by CIT(A) is deleted. These grounds of appeal are allowed.
13. Ground No. 7 relates to addition of Rs. 1,51,000 made on account of building valuation. The grievance of the assessee is that the addition of Rs. 1,51,000 made at the time of completing the original assessment on account of difference in the cost of construction which was deleted by the CIT(A) and the order of the CIT(A) was upheld by the Tribunal has again been included by the CIT(A) while deciding the present appeal. This is not clear from the perusal of the impugned order that the CIT(A) has upheld such addition. There is absolutely no discussion in the present order. In any case, this matter has attained finality vide Tribunal’s order dt. 29th May, 2003 (supra), where the order of the CIT(A) was upheld. Therefore, there is no question of making any addition of Rs. 1,51,000 at the time of set aside appeal proceedings because this issue was not restored to his file. Therefore, this ground of appeal is disposed of in these terms.
14. As regards the trading addition of Rs. 1,25,000 restored to the file of the CIT(A) by the Tribunal, the learned Counsel has not advanced any specific arguments on the same. In fact, there is no specific ground taken before us challenging the addition of Rs. 1,25,000 restored by the Tribunal. Therefore, we refrain from making any comments on the same as no grievance for the same has been projected before us. This means that the addition of Rs. 1,25,000 made at the time of completing the original assessment for which relief was allowed and Tribunal restored the same to CIT(A) would stand.
15. In the result, the appeal filed by the assessee is disposed of in these terms.