SHRI VINAY CHAURASIA,CHHATARPUR V. P. CIT, GWALIOR

ITA 89/AGR/2016

AI Insights

The case involves Shri Vinay Chaurasia, who appealed against the revisionary order passed by the Pr. Commissioner of Income Tax, Gwalior, under section 263 of the Income Tax Act, 1961. The revisionary order was based on the grounds that certain entries in the assessee's capital account and issues related to interest income and loans were not adequately examined by the Assessing Officer during the limited scrutiny assessment for the Assessment Year 2011-12. The Tribunal found that the issues raised by the Pr. CIT were beyond the scope of the limited scrutiny for which the case was selected, and thus, the revisionary jurisdiction was improperly exercised.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126450 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR YADAV LD.
• Assessee Lawyers: RAJENDRA SHARMA; LD
• Keywords: Revision of order; Disallowance of expense; Commissioner; Sources of cash; Commissioner of Income Tax; Suppressed Sale; Restored; Source of cash deposit
• Section: 143(3); 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.89/Agr/2016 (िनधा \u0010रणवष\u0010 / Assessment Year: 2011-12) Shri Vinay Chaurasia Devi Road, Chhatarpur(MP) बनाम/ Vs. Pr. CIT Gwalior. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. ADZPC-8976-B (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Sh. Rajendra Sharma, Adv. – Ld. AR थ कीओरसे/Respondent by : Dr. Arun Kumar Yadav – Ld. CIT-DR सुनवाईकीतारीख/Date of Hearing : 19-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this appeal, the assessee assails invocation of revisionary jurisdiction u/s 263 by Ld. Pr. Commissioner of Income Tax, Gwalior (Pr.CIT) for Assessment Year (AY) 2011-12 vide impugned order dated 21-03-2016 in the matter of an assessment framed by Ld. AO u/s 143(3) of the Act on 11-02-2014. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 2. Upon perusal of Para-2 of impugned order, it could be seen that the assessee’s return of income was selected for limited scrutiny in order to verify the sources of cash deposit in savings bank account as per AIR information. The Ld. AO framed an assessment on 11-02- 2014 after making addition of suppressed sale and disallowance of expenses. Subsequently, Ld. Pr. CIT, upon perusal of case records, 2 alleged that there was credit entry of Rs.50 Lacs in the capital account which remained to be examined by Ld. AO. Another observation was that differential of interest income as credited in capital account was to be brought to tax. Thirdly, the assessee being a shareholder in M/s Peptech Housing Pvt. Ltd. took loan from the said entity for Rs.42.75 Lacs and Ld. AO failed to explore the possibility of invoking the provisions of Sec.2(22)(e). The assessee opposed the same on the ground that credit in capital account represents contribution by a member of Joint Venture entity which was formed to bid tenders for obtaining excise contracts from MP government. The differential of interest of Rs.0.63 Lacs was stated to be not received. On the issue of Sec. 2(22)(e), it was stated by the assessee that the assessee was rather a creditor in M/s Peptech Housing Pvt. Ltd. and moreover, the assessee was not holding any share in that entity during the year. However, rejecting the same, Ld. Pr. CIT held the assessment order to be erroneous and prejudicial to the interest of the revenue and directed Ld. AO to pass fresh order on three issues. Aggrieved, the assessee is in further appeal before us. 3. At the outset, it could be observed that the case was selected for limited scrutiny to verify the source of cash deposit. The issue of interest income and invocation of Sec.2(22)(e) was not subject matter of limited scrutiny assessment proceedings. Therefore, no infirmity could be attributed to the assessment framed by Ld. AO on the ground that he failed to deal with other issues which did not fall in the 3 realm of the limited reason for which the case of the assessee was selected for scrutiny assessment proceedings. In other words, Ld. Pr. CIT, in the garb of revisionary jurisdiction u/s 263, could not be permitted to traverse beyond the jurisdiction that was vested with Ld. AO while framing the assessment. The revisionary jurisdiction could not be exercised for broadening the scope of jurisdiction that stood vested with Ld. AO while framing the assessment. As a matter of fact, which could not be done directly could not be done indirectly. Accordingly, the assessment could not be said to be erroneous and prejudicial to the interest of the revenue on these two issues. So far as the capital introduction in cash is concerned, it could be seen that the case was scrutinized specifically to examine the source of cash deposit. The same was duly verified by Ld. AO with due application of mind. Secondly, the assessee had duly explained the sources of capital contribution of Rs.50 Lacs which fact has not been rebutted in the impugned order. Under these circumstances, the impugned revisionary order is liable to be quashed. We order so. The assessment as framed by Ld. AO stand restored back. Delving into other arguments has been rendered academic in nature. 4. The appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) 6ा ियक सद7 /JUDICIAL MEMBER लेखा सद7 / ACCOUNTANT MEMBER Dated: 22.04.2025 4 आदेश की 9ितिलिप अ;ेिषत / Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु3/CIT 4. िवभागीय ितिनिध/DR 5. गाड9फाईल/GF ASSISTANT REGISTRAR ITAT AGRA "