Riyaz S. Padvekar, J.M. ORDER This appeal by assessee is directed against order of CIT(A)-II, Calicut dt. 9th Jan., 2006 for asst. yr. 1995-96. 2. assessee has filed following concise grounds : "(1) order of learned Hon ble CIT(A) insofar as it is prejudicial to appellant is opposed to law and facts and circumstances of case. (2) Hon ble CIT(A) is in error in confirming addition of Rs. 7,00,000 as income from other sources without appreciating evidence produced by appellant. (3) Hon ble CIT(A) erred in not holding that AO committed serious breach of law in not putting to test evidence produced by appellant by not summoning all persons who had purchased gold from appellant. (4) Hon ble CIT(A) is in error in holding that appellant was resident during year, when evidence produced by appellant clearly showed that he was non-resident during year. (5) Hon ble CIT(A) is in error in making addition of Rs. 22,15,116 being remittances from abroad. appellant being non-resident these remittances were clearly not taxable in India. (6) Hon ble CIT(A) is in error in requiring appellant to prove source of remittances from abroad when there is no such statutory requirement. (7) Hon ble CIT(A) erred in rejecting evidence produced by appellant to prove foreign remittances, without adducing any valid reasons. (8) For these amongst other grounds that may be raised and evidence adduced at time of hearing, it is requested that Hon ble Tribunal may be pleased enough to cancel impugned additions made in assessment as well as in appeal and it is prayed accordingly." 3. first issue which arises for our consideration is whether CIT(A) is justified in confirming addition of Rs. 7 lakhs made by AO. 4. facts in brief can be stated as under : assessee filed his return of income for asst. yr. 1995-96 declaring total income of Rs. 13,840 which was initially accepted under s. 143(1)(a) of Act by AO. Subsequently, notice under s. 148 of Act was issued and in response to said notice, assessee filed return of income declaring income of Rs. 13,840 as it was in original return. assessee has declared half share of rent received from Sumaya Lodge. Subsequently, assessee filed revised return and declared income of Rs. 38,030. assessee s case was selected for scrutiny and completed under s. 143(3) of Act. During course of assessment proceedings, it was noticed by AO that in respect of SB Account No. 3536 which was in name of assessee s wife namely Mrs. Shamila, following deposits were made in cash : Amount Sr. No. Date (Rs.) 1. 12-7-1994 5,00,000 2. 27-3-1995 5,00,000 5. assessee admitted that deposits made in said account were out of his own funds. AO therefore, asked assessee to explain source wherefrom deposits were made. In respect of deposit made on 12th July, 1994, assessee s explanation was that same was remittance from abroad. By changing his stand as noted by AO, assessee stated that same were made from borrowings made by him from one NRE friend. Thereafter, again as noted by AO, assessee changed his explanation and stated that he had brought with him 12 gold bars weighing 1392 grams on 26th Oct., 1992 while returning from Muscat and said gold bars were sold to various relatives and sums received on sale of said gold bars were deposited and said deposit of Rs. 5 lakhs made on 12th July, 1994 was out of sale proceeds of gold. assessee submitted his passport to support that he has brought 12 gold bars on 26th Oct., 1992 wherein it was found by AO that there was due entry made in respect of gold bars brought by assessee. assessee also furnished confirmation letters from 12 persons claiming that gold was sold to them. AO has given details of 12 confirmation letters on pp. 4 and 5 of assessment order. AO recorded statement of five persons as under : (i) Shri P.K. Jamal (ii) Shri R.K. Mohammed (iii) Smt. B.P. Khayarunnisa (iv) Shri P.C. Siddique (v) Shri P.C. Mohammed Unni 6 . AO has given his analysis of statements with reasons for disbelieving those persons. AO asked assessee to produce remaining persons for examination, but assessee expressed his inability by stating that those persons were abroad at that time. It was further contended by assessee that he had no legal power to call persons but Department has same. In opinion of AO, persons to whom gold was sold were assessee s relatives and hence it was not difficult for him to produce them for examination before AO. AO rejected contention of assessee by giving following reasons and made addition of Rs. 5 lakhs in respect of deposit made in SB Account No. 3536 in name of assessee s wife on 12th July, 1994 : "5. entry in passport book show that Shri Sheraffuddin had brought 12 gold bars weighing 1392 grams on 26th Oct., 1992. It is unbelievable that assessee had kept it unsold for almost two years that too when he and his family were abroad. When gold biscuits were sold he must have realised some profit. He has not shown in return any profit on sale of gold bars. In submission made on 24th March, 1999 it is stated by assessee that sales were made to relatives and question of making profit did not enter his mind were made to relatives and question of making profit did not enter his mind at all. He has also stated that it was Rk only because of particular exemption on customs duty for import of gold up to 5 kg. that he felt he could oblige his friends and relatives. If he had brought gold bars to oblige his friends and relatives to give them at cost price, it is not understood why he had not obliged his friends and relatives for about two years as bars were brought on 26th Oct., 1992 but claimed to have been sold only in June and July, 1994. It is to ascertain from him personally genuineness of claim of sale of gold bars brought on 26th Oct., 1992 were sold in 1994, that representatives of assessee first Shri C.R. Harish and then Shri C. Ravindranathan were asked to bring assessee when it was known from them that assessee had come to India. When he was not responded to request made through his representatives summons was issued to him for appearance on 2nd Feb., 1999. assessee has not responded to summons also. In letter dt. 24th March, 1999 assessee states that he was to leave shores of India before issue of summons or before representatives were asked to bring him. This is far from truth. assessee was very much in India when I requested through his representatives to appear and informations that he was in India even when summons was issued. He very frequently visits India. Hence argument that concerns of company who employed him demand that he do certain jobs at stipulated time is false justification for non- compliance of summons. fact of case would be that he must have sold gold bars immediately after it were brought to India and utilised it for his various economic activities in India. When he was asked to explain source of deposit in saving account of his wife and found no source to explain entry in passport regarding 12 gold bars brought on 26th Oct., 1992 come in handy and then approached his relatives and friends for giving confirmation letters to effect of purchase of gold bars from assessee. If sale was genuine and deposit of Rs. 5,00,000 in bank account of wife dt. 12th July, 1994 was out of sale proceeds of gold bars assessee could have explained it at first instance itself instead of shifting stance 3 times. 6. For reasons stated above I hold that source of fund from which amount of Rs. 5,00,000 was deposited by assessee in saving account No. 3536 of his wife Smt. Shamila Sheraffudin with State Bank of India, Shornur Branch was not proved and hold that same was out of his unexplained income. Rs. 5,00,000 is added to total income of assessee as income from other sources." 7. In respect of cash deposit of Rs. 5 lakhs made on 27th March, 1995, AO accepted explanation of assessee to extent of Rs. 3 lakhs which assessee has stated that he has sold some lands and residential house at Cheruthuruthy, but AO made addition of Rs. 2 lakhs treating same as unexplained investment under s. 69 of Act. 8 . assessee challenged said addition before CIT(A), but CIT(A) confirmed same by giving following reasons : "5.3 I have gone through assessment order and submissions made during appellate proceedings and paper book submitted during appellate proceedings. It is seen that there is cash deposit of Rs. 5 lakhs in SB account No. 3536 in name of appellant s wife dt. 12th July, 1994. It is further seen that there is further cash deposit of Rs. 5 lakhs in SB account No. 3536 in name of appellant s wife on 27th March, 1995. appellant had brought 12 gold bars in 1992 weighing 1392 grams. appellant had claimed that these gold bars were sold to 12 persons. Out of these 12 persons, AO summoned 5 persons. Statement of these five persons were recorded during assessment proceedings. It is seen that there are various discrepancies in these submissions vis-a-vis confirmation letters filed by them. Sri P.K. Jamal purchased jewellery stated to be made out of gold bar purchased from appellant. It is however seen that in this gold jewellery emblem of RV was inscribed against claim of Ayodhya Jewellery by Sri P.K. Jamal. It was further noticed that Sri P.K. Jamal had no regular source of income. He was having only meagre income from one acre of land owned by family. Similarly it was seen that Sri R.K. Mohammed spent more than 9 lakhs during relevant period for constructing house and discharging part of his debit. Sri R.K. Mohammed had claimed that gold bar was converted to jewellery at shop of T. P. Devassy & Sons, Chavakkad. Further he could not produce relevant bills and in support of this claim it was seen that Smt. Kairunissa had also exhausted her retirement benefits. She had even taken advance from provident fund account and also borrowed from brothers and brothers of husband. During period she had also incurred huge expenditure on construction of residential house on education of her son. It was submitted that she had purchased gold biscuit to make gold for her servant at time of future marriage was not very convincing. Similarly there was discrepancy in statement of Sri P.C. Siddique and Sri P.C. Mohammed Unni. It is seen that in all cases appellant could not produce convincing evidence of purchase of gold biscuits by these persons from appellant during relevant period. In no case conversion of gold biscuit to ornaments or bills were produced except in case of Sri P.K. Jamal. converted jewellery was not having emblem of Ayodhya Jewellery as claimed by Sri P.K. Jamal. It is seen that these persons were of small means. They had already incurred heavy expenditure for which known sources were not sufficient. In such circumstances, purchase of gold from appellant is not proved by any third party evidence. It is further seen that these persons were related to appellant. In view of these facts, evidences of all these persons are not very relevant. There were various discrepancies in statements recorded from these persons. Even appellant was shifting stand regarding source of evidences during assessment proceedings. It is noted that appellant was supposed to have brought gold biscuit during 1992. appellant has claimed that these gold bars were sold during current assessment year. It is further seen that no where, profit of sale of gold bars have been reflected in return filed by appellant during year. If story of sale of gold bar was correct appellant should have shown it in return filed by him in current assessment year. This has not been done. It is further seen that appellant could produce evidence for source of cash deposit to extent of Rs. 3 lakhs on 27th March, 1995 in appellant s wife s savings bank account. It was explained that Rs. 3 lakhs was received on account of sale of land and residential house at Cheruthuruthy. Once this explanation was given, AO had already accepted this explanation to extent of Rs. 3 lakhs in assessment order. From these facts and circumstances, it is seen that appellant has failed to furnish satisfactory explanation for cash deposit to extent of Rs. 7 lakhs in savings bank account No. 3536 in name of appellant s wife Smt. Shamila Sherafuddin during year. Considering these facts and circumstances, I hereby confirm addition of Rs. 7 lakhs as unexplained deposit in savings bank account of appellant s wife in SB account No. 3536 during year as done in assessment order dt. 30th March, 1999." 9 . Now assessee has challenged above findings of CIT(A) in this appeal. learned chartered accountant argued that assessee is non-resident and he was out of India way back in 1980 onwards and he was working abroad. learned chartered accountant referred to paper book filed, more particularly p. 129 where details of entries on arrival and departure from passport are given. learned chartered accountant also referred to pp. 131 to 145 where copies of passport of assessee are placed and submitted that there is no dispute as far as import of 12 gold bars are concerned as due entry is made in passport by customs officials. It is further argued that as assessee was non-resident, his affairs were looked after by his father-in-law and other friends. It is further argued that alleged unexplained investments to tune of Rs. 5 lakhs in respect of cash deposits made by assessee in SB Account No. 3536 is under s. 69. It is further argued that s. 69 is rule of evidence and there is primary burden on assessee to discharge identity of person, source and genuineness of transaction. It is argued that assessee has filed confirmation letters before AO and in fact, AO has recorded statement of five persons. It is further contended that assessee has given details in respect of names and addresses of those persons and on verification of five persons, nobody has denied that they have purchased gold from assessee. Merely because some small contradictions are there in respect of transactions which go back to financial year 1993-94, AO as well as CIT(A) cannot put burden like burden in prosecution while proving criminal charges. It is further argued that probability of burden is to be adopted and once primary burden is discharged, no addition is desired under s. 69. learned chartered accountant submitted that assessee has asked AO to issue summons to remaining seven persons and record same and assessee cannot force any person to come and stand before AO. 1 0 . In respect of addition of Rs. 2 lakhs, learned chartered accountant argued that AO himself admitted that Rs. 3 lakhs were deposits from sale of land and residential house, but in respect of remaining Rs. 2 lakhs without giving any proper reasoning AO proceeded to make addition under s. 69 which is not correct. It is further argued that assessee is in very sound financial position and he has made lot of investments, hence potential of investments is not disputed by AO also. 11. learned chartered accountant further submitted that ss. 68 and 69 are brought on statute book to check black money and not to apply said provisions to bona fide transactions. learned chartered accountant relied on following precedents : (i) Addl. CIT vs. Hanuman Agarwal (1984) 40 CTR (Pat) 15 : (1985) 151 ITR 150 (Pat); (ii) Addl. CIT vs. Bahri Bros. (P) Ltd. (1984) 42 CTR (Pat) 66 : (1985) 154 ITR 244 (Pat); (iii) CIT vs. Orissa Corpn. (P) Ltd. (1986) 52 CTR (SC) 138 : (1986) 159 ITR 78 (SC). 1 2 . Per contra, learned Departmental Representative supported orders of authorities below. 13. We have heard rival submissions of parties. We have also carefully considered facts as per record available before us. We have also gone through precedents relied on by learned chartered accountant. controversy is in respect of two cash deposits made by assessee in SB Account No. 3536 of his wife. assessee is non-resident and working in Muscat for long-time. assessee has made substantial investments in Mettupalayam, Palakkad. In respect of investment in Sumaya Lodge, AO himself has admitted that it is out of remittances through NRE account, though AO has rejected assessee s claim that his wife Smt. Shamila Sherafuddin was having independent source. In respect of addition of Rs. 5 lakhs which relates to deposit made in SB Account No. 3536 of his wife, though assessee has changed his stand, but he came with explanation that he has brought 12 gold bars of 1392 grams on 26th Oct., 1992. He has also produced passport before AO on which AO is also not disputing that there is entry made by customs officials on assessee s passport to prove that assessee has brought 12 gold bars on 26th Oct., 1992. only dispute is in respect of claim of assessee that he sold said gold to different relatives and proceeds received from sale of said gold were deposited in SB Account No. 3536. assessee also furnished confirmation letters from 12 persons claiming that gold is sold to them. AO recorded statement of five persons but was not satisfied with statements given by those five persons for reasons given on pp. 5 to 16 of his order. AO has tried to contradict statements made by those persons by giving his own reasons. There is no dispute that there are some contradictions in statements given by those persons, but merely there are contradictions in statements but otherwise when parties are admitting that they have purchased gold, then statements recorded from those persons for purpose of assessment can be decided in touch-stone like criminal proceedings while examining evidence led by prosecution. Our answer certainly is no . 14. There is no dispute about proposition that ss. 68 and 69 are in nature of rules of evidence. Though in 1922 Act, this rule was given recognition by different judicial pronouncements, but there was no specific provision in said Act. In 1961 Act, this rule is given recognition by way s. 68/69. If it is found that assessee has made investments but is unable to explain source or which is not recorded in books of account, then to extent of investments made and source not proved, said sum is treated as income of assessee. 1 5 . As per different judicial pronouncements, primary burden is on assessee to disclose identity of persons and source of investment and genuineness of transactions. In present case, in our opinion, primary burden has been discharged by assessee by giving identity of persons, source and genuineness of transactions by way of disclosing identity of persons and confirmation letters. Moreover, AO has also recorded identity of persons and confirmation letters. Moreover, AO has also recorded statement of five persons but refused to accept genuineness of transactions as there are some contradictions in statements given by those five persons. We have already observed that once assessee has discharged his burden by proving identity, source and genuineness of transactions, AO cannot put burden on assessee for further explaining source o f source. As per facts available on record, it is not disputed that assessee has imported/brought 12 gold bars which is proved by way of passport o f assessee. Now, AO also insisted that assessee should produce remaining seven persons for which assessee s explanation was that all those persons were abroad. Moreover, assessee has no power to enforce attendance of any person but powers are vested in AO and he should have issued summons under s. 131 of Act as AO had full identity of remaining persons. Moreover, from assessment order there should not be dispute about fact that in respect of some persons, their residential houses were also visited. Though AO has noted that assessee has never requested for issuing summons but before that AO himself has stated contention of assessee that assessee has no power to enforce attendance of any person. In our opinion, assessee has discharged burden which is contemplated by legislature as far as cash deposit of Rs. 5 lakhs made on 12th July, 1994 in SB Account No. 3536 of his wife Smt. Shamila Sherafuddin is concerned. We do not find any justification to sustain said addition. We, therefore, delete addition of Rs. 5 lakhs made by AO. 16. next addition is of Rs. 2 lakhs which is out of cash deposit made by assessee in SB account No. 3536 on 27th March, 1995. It is seen that assessee tried to explain source of said deposit by stating that said deposit was out of cash withdrawn by him from time to time from his own NRE account No. 342 with State Bank of India. AO rejected assessee s argument that assessee could not correlate or identify withdrawals with deposit. assessee further stated that assessee has sold two properties i.e., land at Cheruthuruthy for Rs. 1,67,000 and residential house for Rs. 1,33,000 and sale proceeds of those were utilized for deposit of Rs. 5 lakhs. AO accepted deposit to extent of Rs. 3 lakhs but made addition of Rs. 2 lakhs. 17. We have carefully considered arguments advanced by learned chartered accountant. Admittedly, in respect of addition of Rs. 2 lakhs though it is contended that it was from withdrawals from NRE account, but nothing has been placed before us except copies of daybook to support contention. In our opinion, AO has rightly made addition of Rs. 2 lakhs as assessee has not discharged burden cast upon him under s. 68/69 of Act. We, therefore, confirm order of AO in respect of addition of Rs. 2 lakhs. 18. next issue is enhancement made by CIT(A) holding that income declared by assessee in receipts and payments account as income from abroad of Rs. 22,15,116 is liable to be taxed in hands of assessee. During course of appellate proceedings, it was noticed by CIT(A) that assessee has declared income from abroad of Rs. 22,15,116. CIT(A) perused returns filed by assessee, original filed on 22nd Aug., 1995 and revised return filed on 11th March, 1998 wherein assessee has claimed status as resident in opinion of CIT(A), as assessee has claimed status as resident in India, assessee should have offered global income for taxation during year. CIT(A) therefore, proceeded t o bring to tax income declared by assessee which was income from abroad at Rs. 22,15,116 and issued notice of enhancement under s. 251(1)(i) of Act on 25th Nov., 2005. assessee resisted proposal of CIT(A) for bringing to tax sum of Rs. 22,15,116 which was claimed as income from abroad. It was contended by assessee that though in return of income status was shown as resident, but in return of wealth which was filed on 29th Aug., 2005, status was shown as non-resident. It was further contended by assessee that all assessments have been completed and no income arising outside India has been taxed in hands of assessee. assessee claimed correct status as non-resident taking contention that due to mistake status was shown as resident in IT return. assessee also contended that this aspect has been examined by AO. further contention of assessee before CIT(A) was that assessment is completed after resorting to s. 147 and only reason recorded for reopening by AO was rental income from bank and hence as subject-matter of reassessment was not residential status, and income declared in respect of income earned abroad cannot be brought to tax in reassessment proceedings. It was further contended that CIT(A) has power of enhancement for hunting new source of income under s. 251(1)(i) of Act. assessee relied on following decisions to support said contention : (i) CIT vs. M.P. Iron Traders (2004) 189 CTR (P&H) 154; (ii) CIT vs. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC); (iii) CIT vs. N. Krishnan (1998) 23 3 ITR 646 (Ker); (iv) Vipan Khanna vs. CIT (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H); (v) CIT vs. Sardari Lal & Co. (2001) 170 CTR (Del)(FB) 431 : (2001) 251 ITR 864 (Del)(FB). assessee finally contended before CIT(A) that proposal for bringing to tax income earned abroad should be dropped. 1 9 . CIT(A) rejected first objection of assessee that as subject-matter of assessee is assessment made under s. 147 r/w s. 143(3) and while initiating reassessment proceedings under s. 147 subject- matter of reassessment proceedings was not status or income earned by assessee abroad and hence, CIT(A) has no power to go into that issue and to do enhancement under s. 151 of Act. CIT(A) gave his reasons for same which are as under : "It is seen that appellant has taken strong objection to considering matters which were not in reasons recorded before issue under s. 148 in present case. It is seen that assessment for present case is made under s. 143(3) r/w s. 147. reason recorded for issue of s. 148 notice was non- inclusion of rent received from Union of India pertaining to Gazala Inn property during year. appellant has contended that other matters which were not in reasons recorded in reopening of assessment cannot be considered during reassessment proceedings. appellant has cited various decisions of Hon ble Supreme Court, P&H and also Hon ble Cochin Bench. It is however seen that these decisions have been overruled by amendment to IT Act s. 147 w.e.f. 1st April, 1989. Sec. 147 after 1st April, 1989 reads as under : If AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to, provisions of ss. 148 to 153 assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section. It is thus seen that w.e.f. 1st April, 1989, AO is empowered to include any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section. It is thus seen that due to this amendment, decision of Hon ble Supreme Court in case of CIT vs. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC) has been overruled. From 1st April, 1989, AO has got full power not only to assess income which is recorded before s. 148 notice but also other income chargeable to tax which comes to his knowledge subsequently in course of proceedings in this section. Reference is made to Supreme Court decision in case of CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC). In this decision it was held that appellate authority has every plenary power while disposing of appeal and scope of his power is co-terminus with that of ITO. He can do what ITO can do and can also direct him to do what he has failed to do. Reference is also made to decision of CIT vs. Devichand Pan Mal (1986) 52 CTR (Raj) 34 : (1986) 160 ITR 545 (Raj). In this decision it was held that powers of AAC are wider that those of ordinary appellate Court under CPC. His competence is not restricted to dealing with subject-matter of appeal. He may examine all matters covered by assessment order and correct assessment in respect of all such matters even to prejudice of assessee, and may remand case to ITO for inquiring into items which were not subject-matter of appeal. It is thus seen that after 1st April, 1989, AO and also CIT(A) can look into is thus seen that after 1st April, 1989, AO and also CIT(A) can look into matter which are not recorded as reasons before issue of notice under s. 147...." 2 0 . By rejecting objection of assessee for enhancement of foreign income in hands of assessee, CIT(A) made addition by giving following reasons : "It is thus seen that if appellant is resident , his global income becomes taxable. income claimed to be earned from abroad Rs. 22,15,116 thus becomes taxable. Even if appellant is not ordinarily resident , appellant has to explain source of income from abroad Rs. 22,15,116. There is no evidence to prove that this income was from abroad during year. appellant has already accepted in receipt and payment statement that income of Rs. 22,15,116 was earned during year. appellant has gone abroad since 1988. appellant thus cannot be non-resident at maximum, appellant can be non-ordinarily resident on verification of facts. appellant has further explained source of income claimed to be earned from abroad at Rs. 22,15,116. This is not proved in spite of opportunity being given from time to time. In view of these facts and circumstances I hereby enhance income of appellants by sum of Rs. 22,15,116 on account of unexplained income in receipt and payment statement...." Now, assessee is in appeal before us. 2 1 . We have heard rival submissions of learned chartered accountant for assessee and learned Departmental Representative for Revenue. We have also carefully considered all precedents relied on by learned chartered accountant. issue before us is whether CIT(A) has rightly invoked power of enhancement in assessee s case. There is no dispute about fact that assessment which is subject-matter of assessee before CIT(A) was completed by initiating proceedings under s. 147 and issuing notice under s. 148 of Act to assessee. On perusal of assessment order, it is seen that AO issued notice under s. 148 as he was of opinion that rental income shown from Sumaya Lodge at 50 per cent was not correct and in fact, assessee should have declared entire income from said property as his income. AO had made said discussion in assessment order more particularly in paras 2 and 3. It is further seen that during course of assessment proceedings, AO also went into enquiry of deposits made in SB Account of assessee s wife, more particularly SB Account No. 3536 which was admitted by assessee that said deposits are from his funds. Finally, AO completed assessment by adopting entire income from house property in hands of assessee and also making addition in respect of unexplained deposit in SB Account of his wife at Rs. 7 lakhs and capital gain in respect of sale proceeds of land and residential house. 22. When matter reached in appeal before CIT(A), assessee filed receipt and payment summary for year ended 31st March, 1995 in which assessee has declared income from abroad at Rs. 22,15,116. CIT(A) was of opinion that in original return as well as in revised return filed by assessee, assessee himself has declared his status as resident in India and hence if he is resident in India then income earned outside India in words of CIT(A) global income was also taxable in hands of assessee under IT Act. CIT(A) therefore, proposed to make enhancement by bringing to tax foreign income of assessee which was declared in receipt and payment account at Rs. 22,15,116. CIT(A) also issued notice under s. 152(1) of Act proposing to bring to tax income earned outside India as declared by assessee in receipt and payment account. assessee s objection was that as status of assessee as well as income/declared by assessee which was earned outside India was not subject-matter of reassessment and hence, CIT(A) cannot go into that aspect and bring to tax by using his power under s. 251(1) of Act. CIT(A) rejected assessee s objection in respect of invoking his powers of enhancement under s. 251(1) as in opinion of CIT(A) he has plenary powers to examine all matters even if subject-matter of enhancement was not considered by AO. 23 . Sec. 251 of Act reads as under : "251. (1) In disposing of appeal, CIT(A) shall have following powers (a) in appeal against on order of assessment, he may confirm, reduce, enhance or annul assessment; (b) in appeal against order imposing penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce penalty; (c) in any other case, he may pass such orders in appeal as he thinks fit. (2) CIT(A) shall not enhance assessment or penalty or reduce amount of refund unless appellant has had reasonable opportunity of showing cause against such enhancement or reduction. Explanation. In disposing of appeal, CIT(A) may consider and decide any matter arising out of proceedings in which order appealed against was passed, notwithstanding that such matter was not raised before CIT(A) by appellant." 24. As noted by CIT(A), after 1st April, 1989 s. 147 has undergone amendment and hence, after said amendment, decision of Hon ble Supreme Court in case of Sun Engg. Works. (P) Ltd. (supra) has been overruled. Now, we have to examine this particular statement of CIT(A). In respect of present case, there is no dispute of fact that assessment of assessee was completed under s. 143(3) r/w s. 147 of Act; i.e., by initiating proceedings under s. 147. CIT(A) himself admits (refer p. 25 para 7.3) that reasons recorded for issue of notice under s. 148 was non-inclusion of rent received from Gazala Inn property during year. There is no dispute about proposition that CIT(A) has plenary powers as that of civil Court, but at same time, it is well-settled principle of law that appellate authority has no power to enhance assessment by discovering new source of income not mentioned in return and which is not subject-matter of assessment order. CIT(A) has no jurisdiction to assess source of income which is not disclosed either in return or in assessment order. It is well- settled principle by different judicial pronouncements that CIT(A) cannot travel outside subject-matter of assessment order under challenge with view to find out new source of income and power of enhancement of CIT(A) is restricted to sources which are subject-matters in appeal before CIT(A). 25. In present case, contention of assessee is that as far as his status is concerned, that was wrongly stated in return of income, but at same time, correct status was stated in WT return as well as in GT return. assessee has filed copy of acknowledgement of WT return which is placed at p. 146 of paper book which pertains to asst. yr. 1995- 96 and it is seen that assessee has declared his status individual non- resident. assessee has also filed copy of order of CIT(A) in respect of gift-tax assessment placed at pp. 147 to 149 of paper book. It is seen that said appeal also relates to asst. yr. 1995-96 wherein CIT(A) has stated that assessee is non-resident Indian during asst. yr. 1995-96 who made investment in properties in name of his wife. It appears that subject-matter of gift was also relating to Sumaya Lodge. We may make reference to s. 147 of Act which reads as under : "147. If AO has reason to believe that any income chargeable to tax h s escaped assessment for any assessment year, he may, subject to provisions of ss. 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section, or recomputed loss or depreciation allowance or any other allowance, as case may be, for assessment year concerned (hereafter in this section and in ss. 148 to 153, referred to as relevant assessment year) : Provided that where assessment under sub-s. (3) of s. 143 or this section has been made for relevant assessment year, no action shall be taken under this section after expiry of four years from end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under s. 139 or in response to notice issued under sub-s. (1) of s. 142 or s. 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Explanation 1. Production before AO of account books or other evidence from which material evidence could with due diligence have been discovered by AO will not necessarily amount to disclosure within meaning of foregoing proviso. Explanation 2. For purposes of this section, following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely : (a) where no return of income has been furnished by assessee although his total income or total income of any other person in respect of which he is assessable under this Act during previous year exceeded maximum amount which is not chargeable to income-tax; (b) where return of income has been furnished by assessee but no assessment has been made and it is noticed by AO that assessee has understated income or has claimed excessive loss, deduction, allowance or relief in return; (c) where assessment has been made, but (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low rate; or (iii) such income has been made subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed." 26. If any income has escaped assessment, then by way of machinery provision, legislature has vested power to bring to tax escaped income by initiating proceedings under s. 147 of Act. It is pertinent to note here that proceedings under s. 147 can be initiated by AO alone and legislature has nowhere vested that power in CIT(A). It is belief of AO on basis of information available with him that any income chargeable to tax has escaped assessment. Much water has flown on interpreting jurisdiction of AO to initiate proceedings under s. 147 of Act. 27. In case of Sun Engg. Works. (P) Ltd. (supra), Hon ble Supreme Court has interpreted scope of jurisdiction of AO by laying down proposition that ITO (now AO); cannot make order of reassessment inconsistent with original order of assessment in respect of matters which are not subject-matter of proceedings under s. 147. It is necessary to refer to some of observations of their Lordships in case of Sun Engg. Works (P) Ltd. (supra) which are as under : "As result of aforesaid discussion, we find that, in proceedings under s. 147 of Act, ITO may bring to charge items of income which had escaped assessment other than or in addition to that item or items which have led to issuance of notice under s. 148 and where reassessment is made under s. 147 in respect of income which has escaped tax, ITO s jurisdiction is confined to only such income which has escaped tax or has been underassessed and does not extend to revising, reopening or reconsidering whole assessment or permitting assessee to reagitate questions which had been decided in original assessment proceedings. It is only underassessment which is set aside and not entire assessment when reassessment proceedings are initiated. ITO cannot make order of reassessment inconsistent with original order of assessment in respect of matters which are not subject-matter of proceedings under s. 147. assessee cannot resist validly initiated reassessment proceedings under this section merely by showing that other income which had been assessed originally was at too high figure except in cases under s. 152(2). words such income in s. 147 clearly refer to income which is chargeable to tax but has escaped assessment and ITO s jurisdiction under section is confined only to such income which has escaped assessment. It does not extend to reconsidering generally concluded earlier assessment. Claims which have been disallowed in original assessment proceeding cannot be permitted to be reagitated on assessment being reopened for bringing to tax certain income which had escaped assessment because controversy on reassessment is confined to matters which are relevant only in respect of reassessment is confined to matters which are relevant only in respect of income which had not been brought to tax during course of original assessment. matter not agitated in concluded original assessment proceedings also cannot be permitted to be agitated in reassessment proceedings unless relatable to item sought to be taxed as escaped income . Indeed, in reassessment proceedings for bringing to tax items which had escaped assessment, it would be open to assessee to put forward claims for deduction of any expenditure in respect of that income or non- taxability of items at all. Keeping in view object and purpose of proceedings under s. 147 of Act which are for benefit of Revenue and not assessee, assessee cannot be permitted to convert reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in original assessment proceedings, unless relatable to escaped income , and reagitate concluded matters. Even in cases where claims of assessee during course of reassessment proceedings relating to escaped assessment are accepted, still allowance of such claims has to be limited to extent to which they reduce income to that originally assessed. income for purposes of reassessment cannot be reduced beyond income originally assessed." 28. We are unable to agree with statement of CIT(A) that after 1st April, 1989 s. 147 has undergone substantial change and hence, decision of Hon ble Supreme Court in case of Sun Engg. Works (P) Ltd. (supra) has been overruled. statement made by CIT(A) is only contrary to legal position. After 1st April, 1989, salient features of old provisions of s. 147 and new provision of s. 147 can be summarized as under : (i) Separate provisions contained in cls. (a) and (b) have been merged into single new section which provides that if AO has reason to believe that income chargeable to tax for any assessment year has escaped assessment he can assess or reassess same. (ii) Under new provisions, power to reopen assessment is much wider and can be exercised even if assessee has disclosed fully and truly all material facts. (iii) requirement in old provisions, i.e., prior to 1st April, 1989 of s. 147 that AO should have information in his possession before taking action to assess or reassess income escaping assessment has been dispensed with. (iv) By virtue of proviso to new section in respect of assessment made under s. 143(3) or s. 147 can only be reopened after expiry of four years from end of relevant assessment year if income has escaped assessment due to failure on part of assessee to file return of income or to disclose fully and truly all material facts necessary for his assessment. 29. From above discussion, we fail to understand how principles laid down by Hon ble Supreme Court in case of Sun Engg. Works (P) Ltd. (supra), have been nullified. We are, therefore, unable to accept such observation of CIT(A). 30. Now, important issue before us is whether under s. 251(1) of Act, considering facts of present case, CIT(A) is justified in enhancing assessment by bringing to tax income earned by assessee outside India taking his status as resident. While completing assessment, AO has taken into consideration rental income from Sumaya Lodge and also considered capital gain as well as unexplained investment which was noticed by AO during course of assessment proceedings to bring to tax income of Sumaya Lodge and unexplained investment. While examining issue of unexplained investment, every material was before AO in respect of t h e assessee s foreign income wherever assessee has made different investments and as AO was of opinion that there is no case to bring to tax foreign income of assessee, hence he did not consider it to assess same in hands of assessee. Another aspect to be considered here and that is very important aspect as we think is that assessment which is subject-matter of appeal before CIT(A) is off-shoot of proceedings under s. 147. Can CIT(A) enter into shoes of AO for further hunting any other escaped income to bring to tax. We have already observed that as far as s. 147 is concerned, it is only AO who can decide to initiate proceedings under s. 147 as it is his belief to bring to tax escaped income. enhancement contemplated under s. 251 cannot be equated with power of AO vested in him under s. 147 for bringing to tax escaped income. Moreover, we find that there is force in argument of learned chartered accountant that while completing wealth-tax assessment as well as gift-tax assessment of assessee for same assessment year status of assessee is accepted by Department as non-resident. 31. learned chartered accountant has placed his heavy reliance on Full Bench decision of Hon ble Delhi High Court in case of Sardari Lal & Co. (supra) to contend that Hon ble High Court has already considered effect of decisions of Hon ble Supreme Court in case of CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC), CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC) and CIT vs. Nirbheram Daluram (1997) 139 CTR (SC) 484 : (1997) 224 ITR 610 (SC) and has held that wide powers of CIT(A) contemplated under s. 251 for enhancement of income does not include power to discover new source of income and bring to tax. 32. In Sardari Lal & Co. s case (supra), after explaining decisions of Hon ble Supreme Court in case of Nirbheram Daluram (supra), Shapoorji Pallonji Mistry (supra) and Rai Bahadur Hardutroy Motilal Chamaria s case (supra) it was held as under : "In CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC) matter related to provisions of Indian IT Act, 1922. It was held, inter alia, that in appeal filed by assessee, AAC has no power to enhance assessment by discovering new source of income not considered by ITO in order appealed against. similar view was expressed in CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC). That also related to case under s. 31(3) of old Act. It was held that power of enhancement under s. 31(3) of old Act was restricted to subject-matter of assessment or source of income, which had been considered expressly or by clear implication by AO from point of view of taxability and that AAC had no power to assess source of income, which had hot been taken into consideration by AO. In CIT vs. Nirbheram Daluram (1997) 139 CTR (SC) 484 : (1997) 224 ITR 610 (SC), it was observed by apex Court that appellate powers conferred on first appellate authority under s. 251 of IT Act, 1961, were not confined to matter, which had been considered by ITO, as first appellate authority is vested with all wide powers that AO may have while making assessment, but issue whether these wide powers also include power to discover new source of income was not commented upon. Consequently, view expressed in CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC) and CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC) still holds good. Whenever question of taxability of income from new source which had not been considered by AO is concerned, jurisdiction to deal with same in appropriate cases may be dealt with under s. 147/148 of Act and s. 263 of Act, if requisite conditions are fulfilled. In presence of such specific provisions similar power is not available to first appellate authority." (headnote) 33. In present case also, CIT(A) has brought to tax income of assessee from abroad by utilizing powers under s. 251(1) of Act and that is nothing but as held in case of Sardari Lal & Co. (supra), new source of income which was not subject-matter in assessment which was in challenge before CIT(A). In our opinion, principles laid down by Hon ble Delhi High Court (Full Bench) in case of Sardari Lal & Co. (supra) are squarely applicable to facts of this case. We are, therefore, of considered opinion that CIT(A) is not justified in enhancing assessee s income by including income from abroad by using his powers under s. 251 of Act. We, therefore, do not find any justification to sustain enhancement made by CIT(A) and we delete enhancement of Rs. 22,15,116 and cancel order of CIT(A) on this issue. 34. In result, assessee s appeal is partly allowed. *** B.P. SHERAFFUDIN v. ASSISTANT COMMISSIONER OF INCOME TAX