2020 (4) TMI 531

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....legal, without jurisdiction and unsustainable in law. 2. That under the facts and circumstances both the lower authorities erred in law as well as on merits in making and sustaining addition of Rs. 9,08,59,835/- u/s.43CA of the I.T. Act. 2.1 That the provisions of Sec.43CA are not at all applicable to the facts and circumstances of the case, more so and including for the reason that in all 13 cases, the agreement to sell was entered much prior to the date of coming into existence and operation of provisions of See.43CA. 2.2 That without prejudice, under the facts and circumstances, Ld. A.O. grossly erred in law as well as on merits in making an addition of Rs. 9,08,59,835/- by adopting the stamp duty circle rate as the deemed sale value without making the reference to the DVO as required vide Sec.43CA(2) r/w Sec,5GC(2)/(3) of the I.T. Act. 2.3 That the findings of Ld. A.O. as well as Ld. CIT(A) are based on a lot wrongly taken facts and wrongly taken inferences, hence the findings and the consequential addition is not sustainable. 2.4 That without prejudice, even on merits, no addition u/s.43CA should have been made and sustained." 3.....

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.... to plead that in the absence of complying with these instructions and directions no other issue can be examined in limited scrutiny assessments. The ld. CIT (A) further held that since additions made are borne out of the transactions in the Real Estate, the same is integral part of inventories in the trade of the assessee. 9. Aggrieved the assessee filed appeal before us. Heard the arguments of both the parties and perused the material available on record. 10. We find that the instructions of CBDT are very clear for examination of issue other than the reasons taken up in limited scrutiny case. The instructions of the CBDT are as under: INSTRUCTION NO.20/2015 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes North Block, New Delhi, the 29th of December, 2015 Subject: Scrutiny Assessments-some important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection ('CASS')-reg .- The Central Board of Direct Taxes ('CBDT'), vide Instruction No. 7/2014 dated 26-9-2014 had clarified the extent of enquiry in certain category of cases specified therein, which are sel....

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....r, the scope of enquiry shall be restricted to the 'Limited Scrutiny' issues. c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for 'Complete Scrutiny' with the approval of the Pr. CIT/CIT concerned. However, such an approval shall be accorded by the Pr. CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating 'Complete Scrutiny' in that particular case. Such cases shall be monitored by the Range Head concerned. The procedure indicated at points (a), (b) and (c) above shall no longer remain binding in such cases. (For the present purpose, 'Metro charges' would mean Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Ahmadabad). 4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or dis....

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....ibility of under assessment of income if the case is not examined under 'Complete Scrutiny'. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable. 3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on record for forming such view; b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct nexus between the available material and formation of such view. 4. It is further clarified that in cases under 'Limited Scrutiny', the scrutiny assessment proceedings would initially be confined only to issues under 'Limited Scrutiny' and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case to 'Complete Scrutiny' after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in 'Limited Scrutiny'. The AO shall also expeditiousl....