2021 (2) TMI 730

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....ACIT-1(1), Indore. 2. Assessee has raised following grounds of appeal:- 1. That on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in sustaining the order passed by AO u/s. 143(3) without appreciating guidelines/ direction issued by CBDT for completion of cases of Limited scrutiny selected through CASS module. The action of Ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. 2. That on the fact and in the circumstance of the case and in law, Ld. CIT (A) erred in confirming the action of Ld AO. in making addition of Rs. 680000/ - by unauthorized expansion of scope of limited scrutiny. The action of Ld CIT (A) is violation of mandatory jurisdictional condition as s....

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.... at Rs. 1,64,84,390/-. Aggrieved assessee preferred appeal before Ld. CIT(A) wherein the assessee raised the grounds on merits challenging the disallowance and also challenging the jurisdiction of the Ld.A.O made the addition for the reasons not identified by him. However Ld. CIT(A) dismissed both the grounds. Now the assessee is in appeal before the Tribunal. 4. Ld. Counsel for the assessee submitted that the reasons provided in the limited scrutiny were towards custom duty payment mismatch, sales turn over mismatch and payment to related person mismatch. However the Ld. A.O without taking necessary permission for conducting scrutiny exceeded its jurisdiction and made the addition u/s 40A(2)(b) of the Act. On merits, Ld. Counsel for the....

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....s which could show that under limited scrutiny what needs to be examined by Ld. A.O for the reasons "payment to related persons mismatch". In absence of these details which have not been provided by either the parties, the legal ground raised by the assessee deserves to be dismissed. 8. As regards the ground raised on merits we observe that Rs. 4,40,000/- each were paid as salary to Smt. Kashmira Ben A Patel and Smt. Puneeta Pragnesh Patel who are the wives of the partners of the firm. The Ld. A.O on his own notion and considering the legitimate needs of the business restricted the claim of the salary to Rs. 1,00,000/- each to both the partners which shows that the Ld.A.O has made "an adhoc disallowance". Both the parties receiving the s....