9911796707
TMI Blog2023 (12) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have been allowed as deduction HELD THAT:- Case of the assessee was selected for limited scrutiny - On perusal of the notice, the case was selected for scrutiny whether deduction claim on account of depreciation is admissible so, it was a case of limited scrutiny and there was no option for the AO to verify anything other than the issue for which the case was selected for limited scrutiny. Ast here was no possibility for the AO to inquire whether the income shown by the assessee was to be assessed under the head business income or other sources unless the limited scrutiny is converted to regular scrutiny. Accordingly, we hold that the PCIT cannot exercise his power u/s 263 of the Act, to verify those items which were not subject ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was also accepted by the AO in the assessment framed u/s 143(3) of the Act vide letter dated 29/11/2018. However, the Ld. PCIT was of the view that such lease rent income should have been charged to tax under the head "other sources" and therefore other expenses such as remuneration/salary to the partner and other expenses of general in nature should not have been allowed as deduction. However, the Ld. PCIT, accepted to allow the deduction on account of depreciation u/s 32 of the Act even the income from lease rent is charged to tax under the head other sources. Accordingly, the Ld. PCIT held that the assessment framed u/s 143(3) of the Act is erroneous in so far prejudicial to the interest of the revenue for the reason that the income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se was selected for scrutiny "whether deduction claim on account of depreciation is admissible" so, it was a case of limited scrutiny and there was no option for the AO to verify anything other than the issue for which the case was selected for limited scrutiny. In other words, there was no possibility for the AO to inquire whether the income shown by the assessee was to be assessed under the head "business income" or "other sources" unless the limited scrutiny is converted to regular scrutiny. Accordingly, we hold that the Ld. PCIT cannot exercise his power u/s 263 of the Act, to verify those items which were not subject matter of the scrutiny. Thus, we hold that the Ld. PCIT has exceeded his jurisdiction by holding assessment as erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X
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