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2023 (5) TMI 735 - ITAT RAJKOTRevision u/s 263 - Validity of assessment order passed u/s 143(3) - unexplained credit on account of capital contribution from 2 partners of the assessee firm, the outstanding balance of the sundry creditor and alleged suppressed production - HELD THAT:- AO during the course of assessment proceedings, raises specific query on the issue capital contribution by the partners and required the assessee to furnish supporting evidence which can be verified from the notice issued u/s142(1) and SCN. It is not the case that the AO has not made any enquiry with regard to capital introduction by the 11 partners, as such the AO carried out adequate inquiry with regard to all the 11 partners who introduced capital in the assessee firm and thereafter made addition u/s 68 on account of capital introduced by the 2 partner only. Thus, the allegation of Pr. CIT for initiated proceedings u/s 263 of the Act on the ground that the AO has not made enquiries or verification with regard to other partners is factually incorrect. Even on merit of the case, we note that the honourable courts in series of the cases have held that the capital contribution made by the partner of the firm cannot be subject to the addition in the hands of the partnership firm. In this regard, we find support and guidance from the judgment of Pankaj dyestuff Industries [2005 (7) TMI 601 - GUJARAT HIGH COURT] - In view of the above we hold that the allegation framed by the learned PCIT cannot be made subject matter of revision under the provisions of section 263. AO made addition of outstanding sundry creditor on ad-hoc and actual amount worked out for supressed production and amount added while computing assessed income are different - Regarding both the issues, we note that the assessee is in appeal before the learned CIT(A). This fact can be verified from the memo of appeal filed by the assessee before the learned. Once the issue is pending before the learned CIT(A), the same cannot be made subject matter of revision under the provisions of section 263 - we note that in case of CIT vs. Vam Resorts & Hotels (P.) Ltd. [2019 (8) TMI 1418 - ALLAHABAD HIGH COURT] as held that when an appeal is pending before the appellate commissioner, then the power under section 263 of the Act cannot be exercised.
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