INCOME TAX ACT, 1961

Section 143(3)

Assessment - Addition to income - AO made addition beyond direction of ITAT in set aside proceedings -

AO noticed that assessee had not furnished necessary details about quantification of amount of commission. Accordingly, AO in absence of requisite details of commission expenses rejected claim of deduction under section 37(1). CIT(A) confirmed order of AO holding that such deduction could not be allowed in the absence of requisite evidences. Assessee carried the matter before ITAT which restored issue to AO. Assessee, in the set-aside proceedings, filed necessary details in support of its claim, however, AO disallowed deduction for want of TDS. Held: Admittedly, in the set aside proceedings, scope before concerned authority for resolving the dispute is limited to the extent of the direction provided by the higher authority until and unless it was directed to make the fresh/de novo assessment. If it does so, he would certainly exceed his jurisdiction which is unwanted. In the instant case, assessee in the set-aside proceedings duly complied with direction of the ITAT and AO had not pointed out any infirmity in submission of assessee. Thus, in such circumstances, AO had no power to make disallowance of commission expenses as claimed by assessee for any other reason, i.e., Non-deduction of TDS which was beyond his power.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2004-05 & 2005-06

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