The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, Shri Mahavir Prasad, JM & Shri Waseem Ahmed, AM held that the AO can convert the Limited to Comprehensive scrutiny on some needs exclusively with the approval of PCIT in writing.
The petitioner is a doctor who runs a hospital in Ahmedabad. The taxpayer has brought an immovable property via an enrolled sale amounting to a total of Rs 1,42,27,200 The jantri value according to the stamp duty authority is Rs.2,59,34,694/- and the appellant furnished the stamp duty of Rs.12,70,800/-. There was a distinction of Rs.1,17,07,495/ between the jantri value of Rs,2,59,34,694/- The Assessing Officer taxed this difference as income via the provisions of section 56(2)(vii)(b) of the I.T. Act.
The petitioner said that the notice was given by AO u/s 142(1) of the Income Tax Act towards the limited investigation for the examination of 7 various problems listed in the mentioned notice and the points concerning the verification of buy and sale of the immovable property was not get covered or prescribed in the specified notice. The petitioner made the payment via overdraft with the Bank of Baroda and imposed an interest of Rs.2,20,524/ in the profit and loss account that was not to be permitted as business expenditure. The AO has permitted the interest of Rs 2,20,524 for the revenue expenses.
This was seen that according to CBDT rules the assessing officer for the limited scrutiny could investigate those problems for which the case has been chosen or the problem mentioned in it. When AO thinks that there is a concealment of the income, he might have converted the Limited Scrutiny into Complete Scrutiny however these must be reasonable on the credible data or material available on the record. Moreover, it is seen that needing substantial verification on any other issue(s), then ‘Complete Scrutiny’ can be accomplished with the approval of the PCIT/CIT concerned in writing post being satisfied with the advantage of the problems mandating full scrutiny.
The Tribunal sees that PCIT has increased the power of needing the information of the sales and buying of the immovable property in the limited scrutiny and permits the appeal Sri PB Parmar appeared on the grounds of Appellant Shri Mod. Usman and Shri Purshottam Kumar appeared on the ground of the respondent.
