Addition based on reasons beyond limited scrutiny is unsustainable

Madhusoodan Paliwal Vs ITO (ITAT Jodhpur)

ITAT Jodhpur held that addition on the basis of reasons not forming limited scrutiny is unsustainable as Assessing Authority cannot exceed the jurisdiction beyond the reasons specified for limited scrutiny.

Facts- The case of the assessee was selected for limited scrutiny for the reason large cash deposits in saving bank accounts and the assessee had also transferred one or more properties during the year. Thereafter, AO assessed the income of the assessee u/s 143(3) of the Act at INR 51,25,510/-. AO while assessing the income at INR 51,25,510/-, had made addition in respect of unexplained cash deposit of INR 10,10,500/- and unexplained investment of immovable property u/s 69 of the Act at INR 34,77,600/.

Aggrieved against this, the assessee preferred appeal before CIT(A), who after considering the submissions, partly allowed the appeal. Thereby, Ld.CIT(A) sustained the addition made u/s 69 of the Act. However, in respect of bank deposits, Ld.CIT(A) accepted the contention of the assessee and deleted the addition.

Aggrieved against the sustaining of addition of INR 34,77,600/- by Ld.CIT(A), the assessee is in appeal before this Tribunal.

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