Limited scrutiny cannot support additions on unselected issues without approval or correction of the scrutiny reason.

Limited scrutiny is confined to the issue for which the case is selected, and an Assessing Officer cannot sustain an addition on an unselected matter without obtaining the required approval or correcting the scrutiny reason. Where the scrutiny reason referred to transfer of immovable property but the addition was made on the basis of acquisition of immovable property, the distinction was material and could not be stretched to cover the new issue. The proper course was to rectify the reason or secure competent approval before examining that matter. On that basis, the addition based on acquisition of immovable property was held unsustainable and liable to be deleted.

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Issues: Whether, in a case selected for limited scrutiny on the ground of transfer of immovable property, the Assessing Officer could sustain an addition on account of acquisition of immovable property without obtaining the requisite approval or correcting the scrutiny reason.

Analysis: The scope of limited scrutiny is confined to the issues for which the case is selected. The scrutiny reason in the present matter referred to transfer of property, whereas the addition was made on the basis of acquisition of property by the assessee. The distinction between transfer and acquisition is material: transfer presupposes existing rights in the asset capable of being conveyed, while acquisition by a purchaser does not answer that description. The use of the term transfer could not be stretched to cover acquisition so as to justify the addition within the limited scrutiny mandate. If the word used in the scrutiny reason was erroneous, the proper course was to rectify it or obtain approval from the competent authority before examining the unselected issue.

Conclusion: The Assessing Officer exceeded the scope of limited scrutiny. The addition based on acquisition of immovable property could not be sustained and was liable to be deleted.

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