9911796707
TMI Blog2021 (10) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... on the loans and repayment was also made as claimed - view taken by the AO towards bonafides of loans appears quite reasonable and plausible. This being as a rational view taken by the AO cannot be brushed aside in exercise of revisional powers. Observations made by the PCIT appear to be in the realm of suspicion and surmises. PCIT has ignored the fact of deduction of TDS and consequent taxability of such interest in the hands of lender. The fact of repayment of loan has not been taken into account despite such facts having been brought to his notice in the revisional proceedings. Apparently, the exercise of power by the PCIT on items unconnected to limited scrutiny is apparently unjustified and nonetheless, the assessee has placed reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue. 3. Briefly stated, the assessee is engaged in the business of flour and rice mill in proprietary concern M/s. Khandelwal Agro, Dhamtari (CG). For the A.Y. 2014-15 in question, the assessee filed return of income declaring taxable income at Rs.9,11,650/-. The case of the assessee was selected for limited scrutiny under CASS on certain points. The assessment was carried out vide order dated 03.10.201 whereby the income returned was assessed as such. 4. After completion of the assessment, the PCIT in exercise of revisionary powers issued show cause notice dated 04.02.2019 proposing revisionary proceedings under s.263 of the Act. As per show cause notice, the PCIT essentially alleged that the AO has failed to verify the genuinenes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 'limited scrutiny' does not include verifications on unsecured loans. The scope of enquiry in the limited scrutiny thus did not encompass a detailed and scrupulous enquiry into nature and source of loans taken in this year. (iii) Vide questionnaire dated 29.06.2016 & 20.07.2016, the requisite enquiries were made by the AO towards capital account of the assessee and also funds borrowed during the year together with bank statement etc. The assessee was specifically asked vide question no.3 of questionnaire dated 20.07.2016 by the AO towards genuineness, identity and creditworthiness of the lender. It is thus after making pointed enquiries, the assessment was carried out. (iv) The relevant evidences towards loans taken from the various l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d plausible. This being as a rational view taken by the AO cannot be brushed aside in exercise of revisional powers. Indulgence with the order of AO on allegations of inadequacy in enquiry from the point of view of PCIT would render the task of AO arduous and extremely difficult. Further, the observations made by the PCIT appear to be in the realm of suspicion and surmises. For instance, the PCIT has observed that assessee has merely credited the interest amount in the account of lender and has not been actually paid during the year. The PCIT has ignored the fact of deduction of TDS and consequent taxability of such interest in the hands of lender. The fact of repayment of loan has not been taken into account despite such facts having been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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