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2022 (1) TMI 629 - ITAT CHANDIGARHRevision u/s 263 by CIT - Unexplained investments in foreign financial - as per CIT AO had failed to make due inquiries relating to the investments made by the assessee in the shares of a company of United Kingdom, M/s Crownstar Ltd., during the year - Contention of the assessee is that the assessment in the impugned case was a limited scrutiny assessment solely for the purpose of examining whether the investment and income relating to foreign financial interest were duly disclosed and during assessment proceedings the assessee had filed reply to the same duly substantiated with evidences stating that the investment made in M/s Crownstar Ltd was duly reflected in the Balance Sheet of the assessee and also in the income tax return filed and it had also been explained to the AO that the investment had been sourced from the return of loan given by the assessee to one M/s Abhilash Growth Pvt. Ltd - HELD THAT:- Assessee disclosed the source of investment made in the said company as being from loan given by it to M/s Abhilash Growth Pvt. Ltd. returned to it during the year and has evidenced/substantiated the same with copy of ledger account of M/s Abhilash Pvt. Ltd. and also the bank statement of the assessee reflecting the transaction. There is no iota of doubt, therefore, that the issue which was required to be examined during assessment proceedings was duly replied to by the assessee and substantiated with evidence and the AO, it can be unhesitatingly said, was rightly satisfied with the reply of the assessee. No anomaly in the replies filed by the assessee has been pointed out, by the Ld. Pr.CIT.to cast any doubt on the nature of the transaction Only grievance is that the AO had not inquired into the nature of the business activities carried out by M/s Crownstar Ltd. This error pointed out by the Ld. Pr.CIT, we find, is totally misplaced. First and foremost this was not the purpose for the limited scrutiny assessment, which only required the AO to inquire whether the investment were duly disclosed. The AO having examined the same, he was not required to go beyond the stated purpose. The assessment order cannot be said to be erroneous therefore for not having examined an issue which it was not required to. Even otherwise, we find that the nature of the business activities carried out by M/s Crownstar Ltd. had been stated by the assessee in the assessment proceedings relating to assessment year 201718 and was very much part of the record of the assessee. For this reason also, the finding of error by the Ld. Pr.CIT of not having inquired into the nature of business activities of M/s Crownstar Ltd. is totally misplaced. As for the income earned by the assessee from the said investment not being inquired into by the Ld. Pr.CIT, the assessee, we find, had stated to the Ld.Pr.CIT that no income had been earned and had also substantiated the same with his financial statements disclosing so. Nothing has been pointed out by the Ld. Pr.CIT to doubt this explanation of the assessee calling for further investigation into it - Pr.CIT has failed to point out any error in the order of the AO and the revisionary power exercised by him, therefore, u/s 263 of the Act is not sustainable in law. There has to be a specific finding that non- inquiry had resulted in a prejudice being caused to the Revenue and section 263 of the Act itself empowers the Pr. CIT to conduct inquiries and arrive at this findings. He cannot exercise his revisionary power to restore the matter to the AO for arrive at this finding of error. In view of the above, we set aside the order of the Ld.Pr.CIT finding no error pointed out by him in the order passed by the AO. - Decided in favour of assessee.
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