AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1105
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....e revenue's appeal for the assessment year 2015-16 wherein revenue has raised following grounds :- 1. "On the facts and circumstances of the case, the Id. CIT(A) erred in deleting the addition of- Rs.4,40,57,000/-. made on account of Suppression of closing stock. 2. "On the facts and circumstances of the case, the Id. CIT(A) erred in deleting the disallowance of Rs. 7,09,000/- made u/s 37 of the I.T Act, 1961." 3. Brief facts of the case are that assessee was engaged in the business of purchase, construction, development and sale of commercial IT space at Gurgaon, Haryana. The assessee company filed its return declaring total income of Rs. 98,15,610/- for the assessment year 2015-16, the case was selected for scrutiny, ....
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....of necessary requirements for real estate projects for smooth operation of the same, assigned valuation to the same, which has been rightly deleted by the Ld. CIT(A) after considering the facts in detail. The Ld. Counsel for the assessee has relied on the order of the Ld. CIT (A) in so far as deleting the said addition is concerned and prayed for dismissal of the appeal filed by the Revenue. 7. We have heard the parties perused the material on record and gave our thoughtful consideration. 8. The Ld. A.O. while making the addition on account of suppression of stock, observed that assessee had a closing stock of space of semi finished land as also a package of land tagged as 'non saleable area' for common facilities which quantified to ....
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....e addition which requires no interference at our hands. Accordingly, the Ground No. 1 of the Revenue is dismissed. 11. In so far as deleting the disallowance of Rs. 7,09,000/- is concerned, the assessee had debited license renewal fee of Rs. 13,34,000/- in its expenses which was disallowed by the A.O by working out the rightful license of the said area at Rs. 6.25 lakhs in respect of Iris Project. On the other hand, the Ld. CIT(A) has deleted the addition by observing that the A.O had not taken into consideration that the 50% of the License fee received reimbursement from other party to whom it had sold the 50% land with 50% FSI way back in 2005. Further found that the assessee had merely claimed 6,67,000/- as its expense, while other ha....
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....ing years.-1,48,421/-" Additional ground 1. That the Ld. A.O and CIT(A) erred in making additions on grounds which were beyond the scope of reasons given under limited scrutiny selection of cases under CASS. No permission was taken by the Pr. CIT/DIT concerned to convert this case to complete scrutiny." 14. The Ld. Counsel for the assessee submitted that the Ld. AO and Ld. CIT(A) had committed an error in treating the rent of Rs. 3,62,200/- and maintenance charges of Rs. 95,254/- paid for Assessee's Bangalore office to look after its business/operation/assets in Bangalore as capital expenditure whereas those expenses are of revenue in nature and allowable under section 37 of the Act. Ld. Counsel for the assessee further....
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.... 18. The assessment of the assessee company was selected for limited scrutiny for the reasons mentioned above, the Ld. Assessing Officer moved further to verify closing stocks of the assessee company along with other expense heads debited in the revenue account and ultimately made addition/disallowances which are not part of the reasons mentioned in the limited scrutiny. The said action of the Ld. A.O is contrary to the procedure prescribed by the CBDT Instruction No. 20/2015 dated 29/12/2015 which reads as follows:- "3. As far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year - one is 'Limited Scrutiny' and other is Complete Scruti....