INCOME TAX ACT, 1961

Section 251

Appeal (CIT(A) - Validity of order - CIT(A) did not issue show cause notice before enhancing addition made by AO -

AO made addition on account of sale out of books on presumption basis. Case of assessee was that CIT(A) enhanced the addition for credit allowed on account of expenditure @ 30% without serving notice under section 251(2).Held: It is pertinent to note that requirement of issuing show cause notice is must prior to enhancement of the assessment as envisaged in section 251(2) for each and every enhancement and it does not depend on overall outcome of the total income of the assessee in pursuant to the order of CIT(A). If AO made more than one addition to total income of assessee and some of additions were found to be not sustainable by CIT(A) and accordingly deleted then addition which was enhanced by CIT(A) shall satisfy the conditions of issuing show cause under sub-section 2 of section 251 as the same is not obliterated due to reason that certain other additions made by AO were deleted by CIT(A). Therefore, enhancement of assessment has to be considered in the context of each issue raised in the appeal before CIT(A).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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