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TMI Blog2024 (12) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ated from the order of the Learned Assessment Unit, Income-tax Department, passed under section 143(3) read with section 144B of the Act, date of order 06/09/2022. 2. The assessee has taken the following grounds of appeal:- "1. On given facts, circumstances and judicial pronouncements Ld. Pr. CIT-6 erred in concluding that the assessment order passed by the Ld. AO is erroneous and pre-judicial to the interest of the Revenue. Therefore, the order u/s 263 is liable to be quashed. 2 On given facts, circumstances and judicial pronouncements Ld. Pr. CIT-6 erred in concluding that the assessment order was passed without making specific inquires thereby setting aside the assessment order and directing the Assessing Officer to reassess the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144B of the Act. The case was selected under the Computer-Assisted Scrutiny Selection (CASS) system to verify substantial additions or the introduction of intangible assets during the relevant financial year, as disclosed in the Income Tax Return filed by the assessee. Specifically, it was to be examined whether the assessee had reported the actual value of the intangible assets or inflated their value to claim higher depreciation. Verification of the source of investment in these intangible assets was also mandated. The assessee acquired three units through a slump sale during the impugned assessment year. Upon examination of the computation of income and the Tax Audit Report (TAR), it was noted that the assessee had claimed an excess dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crutiny matter. In argument, it is placed that the Ld.AO had properly completed the assessment after verification as directed in the limited scrutiny and after taking the entire verification of investment in intangible asset, the assessment order was passed with no demand. The reliance was placed in the order of Hon'ble Supreme Court in the case of CIT, Kolkata vs Smifs Securities Limited (2012) 24 taxman.com 222 (SC) where the goodwill is treated as an asset and under Explanation 3(b) to section 32(1), the depreciation on the goodwill is eligible expense. In this case, the Ld.PCIT has taken the issue which is already covered by the order of the Hon'ble Apex Court. In further argument, the Ld.AR argued on the second issue related to the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n up for complete scrutiny with the prior approval of the PCIT/CCIT concerned. The another condition put forth by the CBDT is that such approval thereof accorded by the PCIT in writing after being satisfied about imports of the issues necessitating complete scrutiny in that particular case. Further condition that such cases shall be monitored by the Range Head and procedure indicated in Sub- clauses (a) (b) (c) above no longer be remain pending in such cases, which means and reading together clause (b) and (d) itself clarified that in case, the limited scrutiny cases are picked up for scrutiny assessment, the AO shall remain confine to the only reasons/issues for which case has been picked up for scrutiny and the scope of enquiry be restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that there is no direction related the verification of the impugned depreciation claimed under section 32 of the Act. The relevant paragraph-2 of the impugned assessment order, related page 3 is reproduced as below: - "2. Addition of intangible assets: The assessee vide their submissions explained the intangible assets acquired during the financial year 2019-20, in which the company has been incorporated. Intangible assets include assets acquired as a part of business acquisition process. Incidental costs incurred by the Company in relation to intangible assets like professional fees paid to obtain valuation reports, stamp duty for business transfer agreements/consultancy agreements/share subscription agreement/share certificates are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced for examination under Section 263. This position was reaffirmed by the Hon'ble High Court of Calcutta in PCIT vs. Naga Dhunseri Group Ltd[2023] 146 taxmann.com 424 (Calcutta), which reiterated that the powers under Section 263 cannot be used to revisit matters which was not the issue under limited scrutiny assessment. Furthermore, we note that the issue addressed by the Ld. PCIT pertaining to depreciation on intangible assets is squarely covered by the decision of the Hon'ble Supreme Court in Smif Securities Limited(supra), where the Hon'ble Apex Court upheld the eligibility of the claimed depreciation. The Ld. AR also placed reliance on the decision of the ITAT, Mumbai Bench-E, in Metallurgical Services Private Limited vs. Princip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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