Limited scrutiny assessment cannot cover an unconnected addition for purchase of immovable property without valid conversion to complete scrutiny.

In a limited scrutiny assessment, the Assessing Officer could not make an addition on account of purchase of immovable property when the case was selected only for specified issues relating to large cash deposits and transfer of property. The recorded scrutiny reason covered sale or transfer transactions, not purchase or acquisition, and the governing CBDT circular prohibited enlargement of the enquiry into an unrelated matter without valid conversion to complete scrutiny. As there was no material showing proper authorisation for such conversion, the addition was held to be without jurisdiction and was deleted.

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Issues: Whether, in a limited scrutiny assessment, the Assessing Officer could make an addition on account of purchase of immovable property when the scrutiny was confined to large cash deposits and transfer of property by the assessee.

Analysis: The assessment was selected for limited scrutiny only on specified issues. The recorded reason relating to transfer of property referred to sale or transfer transactions, not purchase or acquisition of property. Under the governing CBDT circular, the Assessing Officer could not enlarge the scope of limited scrutiny and travel into an unconnected issue without converting the case into complete scrutiny through proper authorisation. The impugned addition arose from purchase of immovable property and therefore lay outside the permitted scope of enquiry. In the absence of any material showing valid conversion to complete scrutiny, the addition was held to be without jurisdiction.

Conclusion: The addition for purchase of immovable property was not sustainable in a limited scrutiny assessment and was deleted.

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