JUDGMENT G.P. Singh, C.J. This is a reference made by the Income Tax Appellate Tribunal on direction of the High Court in Misc. Civil Case No. 302 of 1971, decided on 2nd November 1972, referring for our answer the following questions of law:- (l) Whether in the facts and circumstances of the case, the Tribunal was justified in deleting a sum of Rs. 2,30,000/- freshly added by the Appellate Assistant Commissioner? (2) Whether the sum of Rs. 2,30,000 was added by the Appellate Assistant Commissioner on new sources of income or items not considered by the Income-tax Officer from the point of view of assessability ? (3) Whether the Appellate Assistant Commissioner had no jurisdiction or power to enhance the sum of Rs. 2,30,000/- under the facts and circumstances in which he was added the same? 2. The reference relates to assessment year 1956-57. The Income Tax Officer completed the assessment by his order dated 11th March 1957. During the assessment proceedings for the succeeding year the Income Tax Officer noticed certain entries relating to Hundi loans which were not genuine and which could be considered as income from undisclosed sources for the assessment year 1956-57. Reassessment proceedings were then started. In these proceedings the Income-Tax Officer considered twelve bogus entries ostensibly relating to Hundi loans and he assessed the amount of undisclosed income at Rs. 2,45,000/- by working out the "peak credit." In the appeal preferred by the assessee, the Appellant Assistant Commissioner, on a scrutiny of the cash-book, discovered ten more bogus entries totaling Rs. 2,30,000 and added the same as income from undisclosed sources. These entries were not at all considered by the Income Tax Officer and were neither mentioned in the return nor in the order of assessment In the second appeal preferred by the assessee the Tribunal held that the Appellate Assistant Commissioner had no jurisdiction to add Rs. 2,30,000 as income from undisclosed sources when these sources were not considered at all by the Income Tax Officer. 3. The powers of the Appellate Assistant Commissioner in disposing of an appeal filed by the assessee are contained in section 251 of the Income Tax Act, 1961. 2,30,000 as income from undisclosed sources when these sources were not considered at all by the Income Tax Officer. 3. The powers of the Appellate Assistant Commissioner in disposing of an appeal filed by the assessee are contained in section 251 of the Income Tax Act, 1961. This section corresponds to section 31 (3) of the 1922 Act which was construed by the Supreme Court in Commissioner of Income-tax, Bombay v. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC) and Commissioner of Income Tax (Central), Calcutta v. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC), In Mistry's case, the Appellate Assistant Commissioner in appeal filed by the assessee considered an item of Rs. 40,000/- which had not been considered by the Income Tax Officer and added the same as income from undisclosed sources. The Supreme Court held that the Appellate Assistant Commissioner exceeded his jurisdiction under section 31 (3) as he had no power to enhance the assessment by discovering new sources of income not mentioned in the record, that is to say, the return filed by the assessee and the assessment order passed by the Income Tax Officer. In Chamaria's case, the Appellate Assistant Commissioner considered an entry of Rs. 5,85,000/- which had not been considered from the point of view of its taxability by the Income Tax Officer and added the amount a s income from undisclosed sources. The Supreme Court held that the power of enhancement under section 31 (3) was restricted to the subject-matter of assessment or the source of income which had been considered expressly or by clear implication by the Income Tax Officer from the point of view of taxability and that the Appellate Assistant Commissioner had no power to assess a source of income which had not been processed by the income Tax Officer and which was not disclosed either in the return filed by the assessee or in the assessment order. In holding so, the Supreme Court observed: "It is not open to the Appellate Assistant Commissioner to travel outside the record. In holding so, the Supreme Court observed: "It is not open to the Appellate Assistant Commissioner to travel outside the record. i.e., the return made by the assessee or the assessment order of the Income Tax officer with a view to find out new sources of income and the power of enhancement u/s 31 (3) of the Act is restricted to the sources of income which have been the subject-matter of consideration by the income Tax Officer from the point of view of taxability. It was further observed: "Consideration does not mean incidental or collateral examination of any matter by the Income Tax Officer in the process of assessment. There must be something in the assessment order to show that the Income Tax Officer applied his mind to the particular subject matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection" Although the entry of Rs 5,85,000/- was noticed by the Income Tax Officer collaterally as it was not considered by him from the point of view of its taxability it was held that the Appellate Assistant Commissioner had no jurisdiction in taxing the same. Both these cases were relied upon and applied in Additional Commissioner of Income Tax. Gujrat v. Gurjargravures P. Ltd. (1978) 111 ITR 1 (SC) which related to section 251 of the 1961 Act. In this case, an item was brought to tax by the Income Tax Officer and no exemption in respect of it was claimed under section 84 by the assessee before him. The Appellate Assistant Commissioner allowed the exemption. It was held by the Supreme Court that the Appellate Assistant Commissioner had no power to do so as the Income-tax Officer had not considered the item from the point of view of its non-taxability. This decision proceeds on the basis that section 251 of the 1961 Act being similar to section 31 (3) of the 1922 Act must bear the same interpretation. 4. On the principles laid down in the aforesaid cases, it is clear to us that the Appellate Assistant Commissioner had no jurisdiction to consider the new entries which were not considered at all by the Income Tax Officer and to add the amount of Rs. 2, 30,000/- to the total income of the assessee. 4. On the principles laid down in the aforesaid cases, it is clear to us that the Appellate Assistant Commissioner had no jurisdiction to consider the new entries which were not considered at all by the Income Tax Officer and to add the amount of Rs. 2, 30,000/- to the total income of the assessee. The items totaling that amount constituted the new sources of income which were not the subject-matter of assessment before the Income Tax Officer and, therefore, It was not open in appeal to consider these sources and to assess them. The learned Standing Counsel does not dispute the position that this would be the result if the interpretation put upon section 31 (3) of the 1922 Act is followed in interpreting section 251 of the 1961 Act. He, however, submits that section 251 contains an Explanation which was not present in section 31 (3) of the 1922 Act and that this Explanation gives a wider power to the Appellate Assistant Commissioner in disposing of an appeal. The explanation reads as follows: Explanation.-In disposing of an appeal, the Appellate Commissioner may consider and decide any matter arising out of the proceedings in which the order appealed against was passed not withstanding that such matter was not raised before the Appellate Assistant Commissioner by the appellant. The Explanation empowers the Appellate Assistant Commissioner to "Consider and decide any matter arising out of the proceedings in which the order appealed against was passed." In our opinion, the words "any matter arising out of the proceedings" are not wide enough to include a matter which could have been raised before or considered by the Income Tax Officer but was not raised before him or considered by him. These words, in our opinion, mean any matter which was processed by the Income Tax Officer or was raised before him for being processed. The proceedings before the Income Tax Officer are limited to the matters expressly or impliedly raised by the assessee and the Income Tax Officer and the processing done by him of these matters. The Explanation does not authorise consideration of any matter by the Appellate Assistant Commissioner which was not raised or processed beore the Income Tax Officer. The explanation, therefore, on its true construction does not help the Department. 5. The Explanation does not authorise consideration of any matter by the Appellate Assistant Commissioner which was not raised or processed beore the Income Tax Officer. The explanation, therefore, on its true construction does not help the Department. 5. For the reasons given above, we answer all the questions in the affirmative in favour of the assessee and against the Department. There shall be no order as to costs.