TaxTMI 
TaxTMI 
2025 (4) TMI 1486
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....f the Ld. CIT(A) to confirm the addition of Rs. 67,39,130/- made by the A.O. as unexplained investments by partly treating the bogus Sundry Debtors of A.Y. 2014-15 is against the settled principles of law and the addition is arbitrary, excessive and illegal. 3. That on the facts and in the circumstances of the case the action of the Ld. CIT(A) to hold that the sales for AY 2014-15 & 2015-16 were not genuine on the basis of expenses debited in the Profit & Loss Account is contrary to the material evidences on record and contrary to the expenses claimed and debited in the Profit & Loss Account and therefore, the addition confirmed by the Ld. CIT(A) of Rs. 67,39,130/- is illegal and bad in law. 4. That on the facts and in the circumstances of the case the action Ld. CIT(A) to confirm the assessment made by the AO by rejecting the scope of limited scrutiny having being expanded by the AO without prior permission is in violation of the provisions u/s 119 of the Act and the assessments is illegal and bad in law. 5. That the assessment framed by the AO and confirmed by the Ld. CIT(A) is unjust. legal, arbitrary and excessive." 3. The relevant facts giving ris....
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....ed on immediately preceding years observation, it is found that your claim of purchases, sales as well stock having no genuineness. There is nothing available to hold otherwise for the current assessment year as well. In such a situation, all receipts from trade receivable liable to be added to your total income as unexplained. You are requested to explain your position in this regard." In response the Ld. A/R of the assessee filed his submission on 05/12/2017. Relevant portion of his submission is as under: "During the year consideration company traded in shares & securities and Cotton Knitted Fabrics. The details of sales & Purchase in shares & Cotton Knitted Fabrics along with respective Sale & Purchase bills are enclosed as per Annexure "B" the respective sales proceeds and purchase value has been debited to the party a/c in the books of accounts maintained by the company the amount payable and or receivable from the parties has been either received or adjusted against amount due or receivable from them. The whole transactions are genuine routine business transaction." From, the perusal of the above submission it can be said that assessee has failed t....
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.... fall under any of the four parameters, as mentioned above, of limited scrutiny. Therefore, he argued that the action of the AO should be held void ab-initio as the assessment had been completed in disregard to the CBDT instructions with respect to limited scrutiny wherein it had been instated that the Assessing Officer (hereinafter, the 'AO') should not travel beyond the parameters for which the case was picked up for limited scrutiny unless the case is converted into complete scrutiny with the prior approval of the Commissioner/Principal Commissioner of the Income Tax. He submitted that the AO had not converted this case for complete scrutiny after taking approval of the Commissioner/Principal Commissioner of the Income Tax. Therefore, the AO could not travel beyond the parameters of the limited scrutiny. Thus, the addition on the score of non-genuine debtors was not justified. Hence, he prayed for setting aside the impugned order and annulling of the assessment order. 4.1 The Ld. Counsel contended that the AO had taxed the sundry debtors of Rs. 29,35,130/- existing as on 31.03.2014 relevant for the AY 2014-15 on the reasoning that the current year's purchases being bogus had ....
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....n this year's case being based on the finding of the assessment order for the AY 2014-15 should have met same fate. vii. When the AO had not given any adverse finding, in the assessment order of the AY 2014-15, that the sundry debtors of Rs. 29,35,130/- were bogus, the same could not be held otherwise in the subsequent assessment order. 5. We have heard both parties and have perused the material available on the record. The assessment order passed in this case has clearly held that the entire business transactions including trading and investments in shares are bogus/non-genuine. Therefore, such finding, being broad, is held falling within the following parameters of limited scrutiny: i. Low income in comparison to very high investments. ii. Low income in comparison to high loans/advances/investment in shares iii. Large increase in investment in unlisted equities during the year Therefore, the issue raising scope of limited scrutiny is decided against the assessee and in the favour of the Revenue. 6. The AO, in the assessment order passed in this case, has held that the entire business transactions including trading and investments in sh....