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TMI Blog2024 (9) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... erly enquired by the AO in original proceedings accepting the submission of the assessee. After verification while passing order giving effect u/s 263 of the Act, the AO has verified the issues raised by ld. PCIT and proceeded on the other issue raised by the learned PCIT on cost of second improvement, this was not the issue raised in show cause notice. Once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the A.O. while completing the assessment and it is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. See ARONI COMMERCIALS LTD. VERSUS THE AS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d; iii) That in admitted and undisputed facts of the case, impugned revision order passed u/s 263 of 1961 Act by PCIT 4 DELHI impugned revision order passed u/s 263 transgresses beyond the scope of SCN issued u/s 263 vis a vis aspect of 2nd cost of improvement (Rs. 72.86.67) is concerned as scn issued was limited to aspect of a) cost of acquisition and b) first cost of improvement without any iota of SCN on aspect of 2nd cost of improvement (Rs.72,86,367) which vitiates the impugned order for violation of principle of natural justice. 2. Brief facts of the case Assessee has filed his return for income for assessment year 2017- 18 on 31.12.2017 declaring nil income. The case was selected for scrutiny under CASS on the issue of large investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act was issued and served on the assessee. In response assessee submitted that the assessing officer specifically asked for relevant information on cost of improvement and acquisition notice u/s 142 dated 11.7.2019. The reply of the assessee is re-produced at pages 4-6 of the order. After consideration of the submission of the assessee, PCIT has observed that assessee in his reply has stated that AO has made exclusive enquiry about cost of acquisition and improvement. They also stated that copy of sale deed, invoice of cost of improvement was filed. With the above acknowledgement, learned PCIT observed that however, the assessee has not given clear reply whether documents related to indexed cost of acquisition and indexed cost of impr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that learned PCIT observed that assessing officer has not verified the cost of acquisition and improvement and also stamp duty valuation u/s 50C of the Act. In this regard he brought to our notice page 5 of the Paper Book and submitted that two issues were highlighted in the notice that assessing office has not made enquiry about indexed cost and indexed cost of improvement and no such property was existed in the balance sheet. AO has not made any enquiry whether the property sold by the assessee at Narela Industrial Area, Delhi is the same as E-715 or D-715. He submitted that in the order learned PCIT has raised the issue of cost of second improvement. The same was not raised in show cause notice. He brought to our notice order givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings accepting the submission of the assessee. After verification while passing order giving effect u/s 263 of the Act, the AO has verified the issues raised by ld. PCIT and proceeded on the other issue raised by the learned PCIT on cost of second improvement, this was not the issue raised in show cause notice. After considering the above facts on record the same issue was considered by the Hon ble Bombay High Court in the case of Nilkanth Tech Park Private Limited(supra) and it is held as under: 10. A point was raised by Mr Sharma that there is no discussion on this in the assessment order. It is settled law as held in the judgment of this court in Aroni Commercials Ltd vs Deputy Commissioner of Income Tax- 2(1) that once a query is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings and the respondent assessee s response to it. In fact this Court in the case of Idea Cellular Ltd vs Deputy CIT(2008) 301 ITR 407(Bom) has held that if a query is raised during the assessment proceedings and responded to by the assessee, the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it. Moreover, from the nature of expenditure as explained by the petitioner to the Assessing Officer during the assessment proceedings itself indicates that the view that the same were in the realm of revenue expenditure, is a possible view. Therefore, we find no fault in the impugned order having followed the binding decision of the Supreme Court in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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