Sudhir Chadha Vs ACIT (ITAT Delhi)
ITAT Delhi held that it is settled law that the revenue cannot travel beyond the issues involved in the limited scrutiny cases, except in exceptional circumstances and hence addition confirmed beyond the limited scrutiny case is unsustainable.
Facts-
During the course of assessment proceedings, the Assessing Officer, noticed that the Assessee had debited expenses of Rs.4,80,000/- to its profit and loss account under the head “commission to others”, therefore the Assessee was show caused to explain the commission expenses incurred by the Assessee, being a Medical Doctor by profession.
AO, after considering the reply of the Assessee observed that the Assessee is a Doctor and is barred by Medical Counsel Rules from giving of and receiving any commission, gifts or gratuity and bonus paid to any person/entity and therefore, the commission of Rs.4,80,000/- paid to others is not a valid business expense and ultimately by passing order u/s 143(3) of the Act, disallowed the same and added it to the income of the Assessee.
Commissioner sustained the disallowance. Being aggrieved, the present appeal is filed.
Conclusion-
As it is settled law that the Revenue Authorities are not allowed to travel beyond the issues involved in limited scrutiny cases, except in exceptional circumstances and by completing the relevant formalities before proceeding to other issues, which in the instant case does not appears to have adhered to. Hence, we deem it appropriate to delete the addition in hand. Consequently, the appeal of the Assessee is liable to be allowed.
In the result, the appeal filed by the Assessee stands allowed.
