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TMI Blog2021 (12) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... ere no inquiry as required under the law is done and it is not open to enquire in cases of inadequate inquiry. In the present case, as noted above, the AO had raised various queries and the same were also replied by the Assessee. In such a situation it cannot be said that there was lack of inquiry from the end of AO. Co-ordinate Bench of Tribunal in the case of M/S Pawansut Media Services Pvt. Ltd. [ 2021 (11) TMI 924 - ITAT DELHI] on identical facts and relying on the decision of Hon ble Delhi High Court in the case of Pr. CIT vs. Brahma Center Development P. Ltd.[ 2021 (7) TMI 347 - DELHI HIGH COURT] held that PCIT was not justified in assuming the jurisdiction. As far as the invocation of Explanation 2 to Section 263 by PCIT in the present case is concerned, we are of the view that only in a very gross case of inadequacy in inquiry or where inquiry is per se mandated on the basis of record available before the AO and such inquiry was not conducted, the revisional power so conferred can be exercised to invalidate the action of AO. PCIT was not justified in invoking the provisions of Section 263 of the Act to set aside the assessment order passed by AO u/s 143(3) of the Act. We th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted by Pr. CIT to support his finding that the order under revision is prejudicial to the interest of revenue and erroneous. 2. On facts and circumstances of the case, the finding of Ld Pr CIT that the order under revision is perverse is based on incorrect assumption of facts and in complete disregard to the evidences furnished before him during revision proceedings. 3. The appellant craves leave to add, delete, modify / amend the above grounds of appeal with the permission of the Hon'ble appellate authority." 4. Before us, at the outset, Ld AR submitted that though the assessee has raised several grounds but the sole controversy is the challenge to the proceedings initiated by PCIT u/s 263 of the Act. 5. Before us, the Ld. A.R. submitted that in the present case the pre-requisite conditions specified u/s 263 of the Act have not been satisfied and therefore the proceedings initiated u/s 263 of the Act lacks jurisdiction and are bad in law. He submitted that u/s 263 of the Act, the Ld. CIT/PCIT can revise an order passed by the AO only on the satisfaction of twin conditions namely (i) the order is erroneous and (ii) it is prejudicial to the interest of Revenue. If one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the payments made for the purchase of shares, invoice and delivery instructions. Learned AR therefore submitted that the AO after being satisfied with the submissions and explanations offered by the assessee, passed order u/s 143(3) of the Act without making any adjustment to the total income and computed the total income at ₹ 7,78,490/-. 7. Ld AR thereafter pointed to para 6 of the show cause notice dated 08.05.2018 issued by PCIT and from that he pointed that though PCIT accepts that on the point for which the case was selected for scrutiny, AO had examined the issue and had also examined the income derived from such investments but however PCIT found another reason, namely the application of provisions of Section 56(2)(viia), which was alien to the reason for selection of the case for scrutiny, for invoking the powers u/s 263 of the Act with respect to the investments made in purchase of shares of Indian Steel & Power Pvt. Ltd. He submitted that in a case which has been selected for limited scrutiny, the powers of the AO are limited to the reasons for which the case has been selected for scrutiny and he cannot enlarge the scope without complying the requirements stipula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) was ₹ 10.83 per share which being higher than the cost of acquisition of ₹ 10.00 per share by ₹ 0.83 per share, the variation in percentage would work out to 8.3% which could be considered to be within permissible limits and therefore cannot be considered to be the acquisition at much below the fair market value. He thereafter submitted from the Fair Market Value computed based on valuation made by PCIT and without going into the correctness of the calculation, the variation between the Fair Market Value and the consideration being of just 8.3% which can be considered to be permissible variation, in view of the accepted position of law that the valuation tools are not exact science and there is always possibility of the inaccuracies creeping in the process forming part of such exercise to work out liability under section 56(2)(viia) of the Act. He further submitted that Finance Act 2020 provided tolerance limit of 10% on difference between stamp duty value and actual consideration but even though the amendment is stated to be prospective but in the present case since the difference between the FMV under rule 11UA and the stated consideration of acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther held that the provision cannot be invoked to correct each and every type of mistake or error committed by the AO; when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law. 14. In the present case it is an undisputed fact that the return of income for the year under consideration was selected for limited scrutiny under CASS for making examination of the issue of investment in unlisted equity shares during the year. It is an undisputed fact that during the year under consideration assessee had made Investment in 2500 equity shares of Mukund Coalfields Pvt. Ltd. @ ₹ 10 per share. (Investment ₹ 25,000/-) and Investment in 7,70,000 equity shares of Indian Steel & Power Pvt. Ltd. @ ₹ 10 per share (Investment ₹ 77,00,000/-). We find that to examine the issue for which the case of the assessee was selected for limited scrutiny, notice u/s 143(2) and 142(1) of the Act was issued by A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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