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TMI Blog2021 (10) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer (AO) dated 03.10.2016 under s. 143(3) of the Act concerning AY 2014-15 was sought to be set aside for reframing assessment in terms of supervisory directions. 2. As per its grounds of appeal, the assessee has challenged the revisional action of the PCIT whereby the Assessing Officer (A.O.) was directed to pass the assessment order de novo after making enquiries on the points set out in the notice which has already examined and considered during the original assessment proceedings concerning A.Y. 2015-16. The assessee has challenged the assumption of jurisdiction by the PCIT under section 263 of the Act on the ground that the Assessment Order under revision is neither erroneous nor prejudicial to the interest of the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order, the assessee contends that; (i) The case was selected for limited scrutiny for below mentioned reasons: (a) Substantial increase in capital in a year. (b) Huge interest paid which are not commensurate to loans raised and assessee has shown less turnover. (c) Mismatch in sales turnover reported in Audit report and ITR. (d) Mismatch in amount paid to related to persons u/s 40A(2)(b) reported in Audit report and ITR. (e) Mismatch between income/Receipt credited to P&L A/c. With reference to above points, the PCIT has alleged that the AO has not conducted any specific enquiry with reference to point nos. a & b above. (ii) It is contended that the verification of increase in capital required in 'limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of substitution of his view with that of AO. (vi) The powers under s.263 of the Act cannot be exercised to merely find out the probability of order being erroneous. 7. On cumulative reading of the facts brought out on record, it appears that the limited scrutiny was not strictly meant for verification of loans which is inherently different from capital of the assessee. The AO was expected to verify increase in capital and not on procurement of loans. Notwithstanding, the assessee has presented the relevant data before the AO in support of loans obtained. The interest was paid on the loans and repayment was also made as claimed. In such situation, the view taken by the AO towards bonafides of loans appears quite reasonable and plausible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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