AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 1534
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....prima facie fai led to carry-out proper investigation and failed to give a specif ic finding as regards appellant's claim of expenditure for the purpose of business and hence, assessment order passed by A.O is erroneous and prejudicial to the interest of Revenue. Order passed u/s. 263 is bad in law and needs to be quashed. 2. On the facts and circumstances of the case and in law, inspite of details of expenses debited to Prof it & Loss A/c were speci f ical ly cal led upon by Ld. A.O and was also submi t ted by the appel lant during the assessment proceeding, Ld. PCIT erred in holding that assessee company has fai led to furnish any documentary evidence in support of its claim that the expenditure is incurred for the purpose of the business. The order passed u/s. 263, is bad in law and needs to be quashed. 3. The appellant craves leave to add, to amend, alter/delete and/or modify the above grounds of appeal on or before the final hearing." 2. Briefly stated, the assessee company which is engaged in the business of real estate development had e-filed its return of income for A.Y. 2014-15 on 22.09.2014, declaring a loss of Rs. 69,59,128/-. The return of income filed by th....
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....essee being aggrieved with the order passed by the Pr. CIT under Sec. 263, dated 12.03.2019, has carried the matter in appeal before us. The ld. Authorized Representative (for short "A.R‟) for the assessee had raised multiple contentions in order to impress upon us that as the A.O after due application of mind had allowed the claim of the business expenses raised by the assessee, therefore, the Pr.CIT had exceeded his jurisdiction and in the garb of the revisional powers vested with him under Sec. 263, had factually sought to review the order passed by the A.O. Apart there from, the ld. A.R had assailed the validity of the order passed by the Pr. CIT under Sec. 263 of the Act. It was submitted by the ld. A.R that as the case of the assessee was selected for limited scrutiny under CASS for the reason viz. "large investment in property (AIR) as compared to total income", therefore, the A.O was divested of his jurisdiction to have adverted to the other aspects except for those on the basis of which the case was taken up for scrutiny assessment. In order to fortify his aforesaid contention the ld. A.R had placed on record a "Snap shot‟ of the reason for selection of the cas....
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....C expenses: Rs. 1,60,000/-; and (iii) property tax: Rs. 5,59,158/-, therefore, the same clearly fell within the realm of the purpose for which the case of the assessee was selected for limited scrutiny viz. "Large investment in property (AIR) as compared to total income". It was submitted by the ld. A.R that as the A.O had failed to consider the allowability of the aforesaid expenses in the course of the assessment proceedings, therefore, the Pr. CIT had rightly exercised his jurisdiction under Sec. 263 and directed him to readjudicate the said issue after affording a reasonable opportunity of being heard to the assessee. It was submitted by the ld. A.R that as the matter had merely been restored by the Pr. CIT to the file of the A.O, therefore, no prejudice would be cause to the assessee as he could substantiate the allowability of its aforesaid claim of expenses on the basis of supporting documentary evidence in the course of the "set aside‟ assessment proceedings. In the backdrop of his aforesaid contentions, it was submitted by the ld. D.R that as the appeal of the assessee was bereft of any force, therefore, the same did not merit acceptance and was liable to be dismisse....
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....ur region. Yours faithfully, (AjayGoyal) Director (ITA.II)" Now, the case of the assessee before us was selected for limited scrutiny, for the reason, that there was viz. "large investment in property (AIR) as compared to total income". A perusal of the queries raised by the A.O in the course of the assessment proceedings reveals, that though he had queried the assessee as regards justifiability of certain expenses etc., which though did not form part of the reason for which the case was selected for limited scrutiny, but then, no addition/disallowance on those issues was made by him while framing the assessment vide his order passed under Sec. 143(3), dated 10.10.2016. Accordingly, it can safely be concluded that the assessment framed by the A.O fell within the realm of the limited purpose for which the case of the assessee was selected for scrutiny assessment viz. "large investment in property (AIR) as compared to total income". 7. As observed by us hereinabove, as per the CBDT Instruction F. No.225/26/2006-ITA-II (Pt.), dated 08.09.2010, in a case which had been selected for scrutiny assessment on the basis of information received through the AIR returns, the scruti....
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....erted to issues pertaining to incurring of the expenses in respect of the said property, for the reason, that the same could also be construed as a part of the investment made by the assessee in the aforesaid property. 8. We shall now in the backdrop of our aforesaid observations deliberate on the validity of the order passed by the Pr. CIT under Sec. 263. As observed by us hereinabove, the Pr. CIT had held the order passed by the A.O under Sec. 143(3), dated 10.10.2016 as erroneous, in so far it was prejudicial to the interest of the revenue, for the reason, that he had failed to carry out proper investigation as regards the allowability of the expenditure claimed by the assessee to have been incurred for the purpose of its business. We are of a strong conviction that now when the case of the assessee was selected for limited scrutiny for the reason viz. "large investment in property (AIR) as compared to total income", therefore, no infirmity could be attributed to the assessment framed by the A.O on the ground that he had failed to deal with other issues which did not fell within the realm of the limited reason for which the case of the assessee was selected for scrutiny assess....