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2023 (12) TMI 1291 - ITAT RAJKOTRevision u/s 263 - Limited scrutiny case of assessee - correct head of income - income from the lease rent ought to have been charged under the head “other sources” instead of “business income” - PCIT holding assessment framed u/s 143(3) as erroneous in so far prejudicial to the interest of revenue - PCIT was of the view that such lease rent income should have been charged to tax under the head “other sources” and therefore other expenses such as remuneration/salary to the partner and other expenses of general in nature should not have been allowed as deduction HELD THAT:- Case of the assessee was selected for limited scrutiny - On perusal of the notice, the case was selected for scrutiny “whether deduction claim on account of depreciation is admissible” so, it was a case of limited scrutiny and there was no option for the AO to verify anything other than the issue for which the case was selected for limited scrutiny. Ast here was no possibility for the AO to inquire whether the income shown by the assessee was to be assessed under the head “business income” or “other sources” unless the limited scrutiny is converted to regular scrutiny. Accordingly, we hold that the PCIT cannot exercise his power u/s 263 of the Act, to verify those items which were not subject matter of the scrutiny. As the contention of the Ld. Counsel that the limited scrutiny was not converted into regular scrutiny was also not controverted by the Ld. DR appearing on behalf of the revenue and that in the earlier AY, the income of the assessee was accepted as income under the head “business and profession” was not controverted by the Ld. DR. In view of the above, we hold that the revisional order passed by the Ld. PCIT is not sustainable. Decided in favour of assessee.
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