ITAT: AO exceeded jurisdiction, deposits wrongly treated as unsecured loans.

The ITAT determined that the Assessing Officer (AO) exceeded their jurisdiction by treating security deposits from sub-contractors as unexplained unsecured loans under section 68. The case was initially selected for limited scrutiny, requiring the AO to obtain permission from the Principal Commissioner of Income Tax (PCIT) for matters beyond the set parameters. The security deposits were linked to completed projects, with TDS deductions on payments to sub-contractors as evidence. The unsecured loans in the balance sheet involved different parties already reviewed by the AO. Consequently, the ITAT ruled in favor of the assessee, deeming the addition unsustainable. .....

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