THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER I.T.A. No. 11/Ran/2022 (Assessment Year-2017-18)

(Virtual Hearing)

Ashok Kumar Pandey, Pr.CIT, Durga Mandir Road, Master Para, Aaykar Bhawan, Luby Vs.

Hirapur, Dhanbad-826001 (Jharkhand) Circular Road, PAN No. AKUPP 5745 P Dhanbad-826001 Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri M.K. Choudhary, Adv.

Department represented by Shri Shiv Swaroop Singh, CIT-DR Date of hearing 24/03/2025 Date of pronouncement 24/03/2025

O R D E R

PER: BENCH

1. This appeal by the appellant is directed against the order of the learned Principal Commissioner of Income Tax, Dhanbad [in short, the ld. PCIT] passed under Section 263 of the Income Tax Act, 1961 (in short, the Act) dated 09/02/2022 for the Assessment Year (AY) 2017-18 by raising following grounds of appeal:

"1. Forthattheorderpassedu/s263isunjustifiedonfactsandinlaw, illegalandliabletobequashed.

2. ForthatLd.PCIT,erredinnotappreciatingthatthiswasnotacaseof noenquiryoflackofinquiry.Assuchtheorderpassedisunjustified, arbitraryandliabletobequashed.

3. Forthat no defect hasbeenfound by Learned. PCIT onthespecific reason of Real Estate Business with High Closing Stock, the specific reason for which the case was selected for scrutiny under Computer AssistedScrutinySelection(CASS).Ld.PCITalsoerredinpointingout howtheviewtakenbyLd.AO waserroneousandprejudicialtothe interest of the revenue. As such the order passed is unjustified and withoutanycogentbasis.

4. ForthatLd.PCITerredinnotappreciatingthattheLd.AO hasmade detailedenquiriesandhastakenoneofthepossibleviewassuchno order u/s 263 could have been passed setting aside the order u/s

143(3).

5. For that Ld. PCIT erred in not appreciating that he could not have enlargedthescopeofenquiryinproceedingu/s263.

6. For that as such the view taken by Ld. AO cannot be said to be erroneousandprejudicialtotheinterestoftherevenue.

7. Forthatanyotherground(s)ifany,willbeargued/takenupatthetime ofhearing."

2. Facts of the case, in brief, are that, in this case, return of income was filed by the assessee declaring total income of ₹ 9,13,750/- for the assessment year under consideration. The return was duly processed under Section 143(1) of the Act and subsequently the case was selected for complete scrutiny through CASS on specific reason i.e. "Real Estate business with high closing stocks". Statutory notices under Section 143(2) and 142(1) of the Act were issued from time to time and duly served on the assessee. In response to the said notice, the assessee filed his submission online with copy of acknowledgement of the ITR, bank statements, computation of income, audit report, Form 26AS, audited books of account, ledger accounts, Challans regarding PMGKY Scheme alongwith other details and documents as called for through departmental ITBA Module which was duly examined by the Assessing Officer. It is further stated in the assessment order that the relevant papers and documents filed during the course of hearing were duly perused and considered. During the assessment year under consideration, the assessee was engaged in civil construction work under his proprietorship concern in the name and style of M/s Ashoka Builders and Developers, Hirapur, Dhanbad. It is further mentioned in the assessment order by the Assessing Officer that on going through the audited books of account, it was seen that the assessee had shown closing stock as work in progress to the tune of ₹ 12,37,58,750.43 for the financial year under consideration and when asked to explain the reasons for high closing stocks, the learned Authorised Representative (ld. AR) of the assessee submitted on 16/02/2019 that during relevant financial year, some projects were completed and most of the projects were shown under 'work in progress' since the registration of the same was still to be made. Further on analysis of the opening and closing stock of