Nisha Gupta Vs ITO (ITAT Kolkata)
In the case of Nisha Gupta vs ITO, the Income Tax Appellate Tribunal (ITAT) Kolkata dealt with two issues arising in the assessment year (AY) 2014-15. The first pertained to an addition of ₹15,32,600 made under Section 56(2)(vii)(b) of the Income Tax Act. This arose due to a difference between the purchase price of a property and its stamp duty valuation. The Assessing Officer (AO) added the differential amount to the assessee’s income, citing provisions that mandate such additions if the difference exceeds ₹50,000. However, the ITAT held that since the valuation difference was less than 10%, it fell within the permissible range specified under Section 50C and related provisions. Citing previous judicial precedents, the ITAT concluded that no addition was warranted and directed the AO to delete the amount.
An addition which is beyond the scope of limited scrutiny is without jurisdiction and has to be deleted
The second issue concerned an addition of ₹1,50,624, attributed to an unexplained difference in the assessee’s capital account balance. The ITAT found that the case was selected for limited scrutiny, and the AO had not obtained necessary approvals to convert it into a complete scrutiny. Since the addition was outside the scope of limited scrutiny, the Tribunal held it to be without jurisdiction, relying on the Calcutta High Court’s judgment in PCIT vs Weilburger Coatings (India) (P.) Ltd. Consequently, the ITAT set aside the CIT(A)’s order and deleted the addition. The appeal was allowed in full, providing relief to the assessee.
