Remand scope and unsupported additions: fresh jurisdictional objections fail, while wage, salary and purchase disallowances were deleted.

A remand limited to reconsideration of additions on the existing record did not permit the first appellate authority to decide a fresh jurisdictional objection to compulsory scrutiny selection, so that objection failed. The text also states that deletions of additions for wages payable, salary payable, and alleged bogus purchases were upheld because part of the wages liability related to earlier years, the Assessing Officer's estimate lacked a proper basis, and the purchases addition was made without adequate opportunity or sustainable factual support. The Revenue succeeded only on the jurisdictional point, while the assessee succeeded on the additions.

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Issues: (i) Whether the first appellate authority was justified in deleting the jurisdictional objection relating to compulsory scrutiny selection for the relevant assessment year. (ii) Whether the deletions of additions made on account of wages payable, salary payable, and alleged bogus purchases were justified.

Issue (i): Whether the first appellate authority was justified in deleting the jurisdictional objection relating to compulsory scrutiny selection for the relevant assessment year.

Analysis: The scrutiny-selection procedure relied upon by the assessee related to a different financial year and could not govern the year in dispute. The matter had also been set aside earlier for fresh adjudication on the merits of the additions and not for deciding any jurisdictional challenge. The appellate authority was therefore expected to confine itself to the scope of remand.

Conclusion: The jurisdictional objection was not sustainable and the Revenue succeeded on this issue.

Issue (ii): Whether the deletions of additions made on account of wages payable, salary payable, and alleged bogus purchases were justified.

Analysis: The record showed that the assessee had a history of wages payable in earlier years and that part of the liability related to prior years, making that portion not taxable in the year under appeal. The estimate adopted by the Assessing Officer was treated as arbitrary in the absence of a proper basis, while the addition for salary payable was also found unjustified. As to the alleged bogus purchases, the addition was made without properly affording the assessee an opportunity and without a sustainable factual basis for a separate disallowance.

Conclusion: The deletions were upheld and this issue was decided in favour of the assessee.

Final Conclusion: The order was sustained only to the extent of deleting the disputed additions, while the finding on the scrutiny-selection jurisdiction was reversed in favour of the Revenue, leaving the Revenue appeal partly successful and the cross-objection without independent relief.

Ratio Decidendi: A remand confined to reconsideration of additions on the existing record does not permit adjudication of a fresh jurisdictional objection unrelated to the scope of remand, and additions for liabilities or purchases must rest on a reasoned and non-arbitrary factual basis.

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