Pradeep Kumar Rochwani Vs Circle (Intl Tax) (ITAT Jaipur)
Facts
Assessee, an NRI residing in Dubai, filed return for AY 2018-19 declaring income of ₹5.51 Cr including LTCG of ₹5.45 Cr. Case was selected for limited scrutiny to verify refund claim. AO, after calling for details (bank statements, purchase agreement, sale deed, TDS etc.), accepted the return & completed assessment u/s 143(3) on 15.04.2021.
Later, CIT invoked revision u/s 263, alleging that AO wrongly allowed excess indexation benefit by reckoning acquisition from 2009 (allotment letter) instead of 2012 (agreement date), thereby reducing taxable capital gains.
Assessee’s Arguments
- Delay of 313 days in filing appeal explained via affidavit; delay condoned by Tribunal.
- AO had examined all documents during assessment; issue of cost/indexation was already verified.
- Limited scrutiny scope could not be expanded without CBDT approval; PCIT exceeded jurisdiction.
- As per CBDT Circulars 471 (1986) & 672 (1993), and case law (e.g., Vembo Vaidyanathan – Bombay HC, Vinod Kumar Jain – P&H HC), date of allotment letter is relevant for indexation, not agreement date.
- Relied on Jaipur ITAT in Ajay Agarwal (2025) & SC in Malabar Industrial Co. Ltd. (2000) – revision u/s 263 requires twin conditions (erroneous + prejudicial), which were absent here.
Tribunal’s Observations/ Decision
- AO had examined assessee’s explanations & supporting evidence during limited scrutiny.
- Once enquiry is made & a plausible view is taken, order cannot be termed “erroneous”.
- PCIT attempted to expand scope of limited scrutiny, which is impermissible.
- Jurisdictional Rajasthan HC in Ganpat Ram Bishnoi (296 ITR 292) held that once enquiry is conducted, 263 revision is not sustainable.
- CBDT circulars & judicial precedents support assessee’s claim that indexation date begins from allotment, not later agreement.
- Invocation of revisionary jurisdiction u/s 263 was unsustainable.
- ITAT set aside PCIT’s order & restored AO’s assessment.
- Assessee’s appeal allowed.
For capital gains indexation, allotment date is relevant. Where AO has already examined the issue in limited scrutiny, PCIT cannot invoke s.263 to substitute his view or expand the scope of scrutiny. Revision requires twin conditions (erroneous + prejudicial), which were absent here.
