TaxTMI 
TaxTMI 
2019 (11) TMI 599
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....g large pits and was much below normal ground level. In support of the same, an affidavit was duly filed before the A.O. Thus addition under this head at Rs. 20,90,319/- (Indexed value of mud) is uncalled for & unjustified. 4) That the lower courts have erred to deny the claim u/s 54EC as claimed by the assessee. The assessee invested Rs. 50,00,000/- on 31/05/2013 towards REC bonds (Rs. 16,80,000/- for A.Y 2013-14 & Rs. 33,20,000/- for A.Y 2014-15). The sale value of plots prior to 31/05/2013 were at Rs. 77,80,000 (Details were duly filed before A.O & learned CIT(A). 5) That the learned CIT(A) has not appreciated the above facts and confirmed the disallowance as mad by A.0 on the grounds that plots were sold after 31/05/2013. He has not considered the fact that sale of plots before 31/05/2013 were at Rs. 77,80,000/- and thus the investment in bonds on 31/05/2013 is fully covered out of sale of plots. Total sale of plots were at Rs. 2,05,34,000/-as under:- Rs. 77,80,000/- During April 2013 (Investment in REC bonds Rs. 33,20,000/- on 31/05/2013) Rs. 96,87,000/- During June & August 2013 Rs. 30,64.000/-During Oct. 2013 (In....
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....n 54EC of the Act, raised in the additional ground No.7, the ld. A.R. of the assessee submitted that in the present case the Limited Scrutiny is on two issues. Firstly, on account of large deduction under section 5B, 54C, 54D etc. and secondly, large cash deposits in savings bank account; that the AO has made addition on account of indexed cost of acquisition Rs. 17,59,545/- and indexed cost of improvement of Rs. 20,90,319/-; that this addition has been made by exceeding the jurisdiction, as the same was outside the purview of limited scrutiny by making an illegal reference to the DVO; that the limited scrutiny means, scrutiny on point raised and not the entire issues; that the computation of capital gains is separate from deduction claimed under sections 54B, 54C, 54D etc.; and that the deduction claimed under section 48 is a separate issue and its working is not under challenge. In this regard, the assessee has relied on CBDT Instruction F.No. DGIT(Vig.)/HQ/SI/2017-18 dated 30/11/2017. The ld. A.R. of the assessee further submitted that the approval of the Principal CIT is mandatorily required for scrutiny and in this case, there was no such approval. In support of his argument, ....
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....d 30/11/2017, for facility, is reproduced as under: "F.No. DGIT(Vig.)/HQ/SI/2017-18 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi-110001 Dated: 30th November, 2017 Subject: Unauthorized expansion of the scope of limited scrutiny - instructions - reg., CBDT has issued detailed guidelines/ directions for completion of cases of limited scrutiny selected through CASS module. These guidelines postulate that an Assessing Officer, in limited scrutiny cases cannot travel beyond the issues for which the case was selected. The idea behind such stipulations was to enforce checks and balances upon powers of an AO to do fishing and roving inquiries in cases selected for limited scrutiny. 2. Further, the guidelines for proper maintenance of order sheets have been given in the Manual of Office Procedure issued by the Directorate of Organisation and Management Services. The Manual clearly lays down: - A. The minutes of the hearing must be entered with date, in the ordersheet. B. Make proper order-sheet entries for each posting, hearing and seeking and granting of adjournments. ....
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....ause the case has been selected for limited scrutiny only on two issues, i.e. (i) Large deduction under section 54B, 54C, 54D etc., and (ii) Large cash deposits in savings account of the assessee; whereas the additions have been made on the indexed cost of acquisition at Rs. 17,59,545/- and indexed cost of improvement at Rs. 20,90,319/-, which is covered under section 48 of the Act, and is outside the scope and purview of the reasons of limited scrutiny. Moreover, the approval of the PCIT is mandatorily required for converting the Limited Scrutiny to a Complete Scrutiny. So, the proper course for the AO before making these additional enquiries would have been to take approval from the administrative Commissioner to widen the scrutiny. This, however, was not done and therefore, the action of the AO is violative of the CBDT Instruction. Thus, the addition so made by the Assessing Officer, in gross violation of the CBDT Instruction, is liable to be deleted. 18. In this view of the matter, finding merit in the grievance sought to be raised by the assessee by way of additional Ground No. 7, the same is accepted, resultant to which ground Nos. 1 to 3 originally raised by the assessee ....