TMI Blog2021 (10) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... PCIT does not form part of the issues raised in the notice under section 142(1) dated 24.07.2017. A.O. was having no mandate to expand the scope of enquiry beyond the points for which case was put under limited scrutiny. The action of the A.O. for not making alleged enquiry on increase in the expenses thus cannot be levelled as erroneous. Thus, looking from any perspective, the action of the PCIT cannot be countenanced on this score. Allegation towards non-verification of nature and source of loan from Goldfeather Ventures PCIT issued show cause notice for verification merely because the Company is a Kolkata based Co. This approach, in our view, is highly untenable. Consequent directions of the PCIT is clearly in the realm of suspicio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents : R.K. Singh, CIT, D.R. ORDER Per Pradip Kumar Kedia , Accountant Member The captioned appeal has been filed at the instance of the assessee against the revisional order of the Principal Commissioner of Income Tax (Central) (PCIT in short), Raipur communicated to assessee on 26.03.2021 passed under section 263 of the Income Tax Act, 1961 (the Act in short) whereby the assessment order passed by the Assessing Officer (A.O.) dated 29.12.2017 under section 143(3) of the Act concerning Assessment Year (A.Y.) 2015-16 was sought to be set aside for reframing the assessment in terms of supervisory jurisdiction. 2. As per its grounds of appeal, the assessee has challenged the revisional action of the PCIT whereby the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax audit report, the turnover shown is ₹ 63,19,22,626/-. ii) Some of the expenses have considerably increased as compared to last year which required verification. iii) The assessee has shown unsecured loan from Goldfeather Ventures Pvt. Ltd., which being a Kolkata based company, verification regarding source/genuineness of transaction and identity was required which remained to be verified during the course of assessment proceedings. 4.1. The revisional Commissioner thus alleged that there was no application of mind by the A.O. on issues noted above and no enquiry whatsoever was carried out. The PCIT accordingly passed a revisional order under section 263 of the Act and directed the A.O. to frame the assessment in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Profit Loss account. The action of the PCIT on this issue thus fails. ii) In so far the other allegation towards variation in some of the expenses claimed, we find that the direction given by the PCIT is on absolutely vague considerations. A mere increase in expenses qua previous year does not necessarily warrant full-fledged enquiry in every case unless it is shown that such increase in expense is disproportionate to the scale of operation. The accounts of the assessee are audited and certified. The PCIT has not brought on record that while turnover has remained static and expenses have been inflated. On the other hand, we observe that the revenue from operation has increased from 55.14 crores to 72.19 crores this year. The PCIT whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that the loan has been availed from a Kolkata based Company. Such action, if endorsed, may tantamount to saying that all loans given by a Company addressed at Kolkata carries lesser bona fides in financial transactions. We cannot reckon such approach on judicial parameters. Secondly and importantly, the aforesaid issue also did not form part of the subject matter of limited scrutiny. Thus, the A.O. was actually prevented from carrying out enquiries on the point beyond the scope of limited scrutiny having regard to the guidelines issued by CBDT vide Instruction No. 5 dated 14.07.2016 in this regard. The PCIT cannot ask the A.O. to travel beyond the scope of enquiry assigned by him under 'limited scrutiny'. A reference can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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