MEDITATION PROPERTIES PVT LTD,NEW DELHI vs. ITO WARD-16(3), NEW DELHI

आयकर अपीलीय अिधकरण
िदʟी पीठ “एस एम सी”, िदʟी
ŵी िवकास अव̾थी, Ɋाियक सद˟

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “SMC”, DELHI
BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER

आअसं.9394/िदʟी/2019(िन.व. 2015-16)
Meditation Properties P. Ltd.,
Flat No. 10, C-1/2, Model Town,
New Delhi 110009
PAN: AAACM-1194-N

...... अपीलाथᱮ/Appellant
बनाम Vs.

Assistant Commissioner of Income Tax,
Appeal-6, Laxmi Nagar, District Centre,
New Delhi 110092

..... ᮧितवादी/Respondent

अपीलाथŎ Ȫारा/ Appellant by : Shri Parveen Kumar, Executive Employee
ŮितवादीȪारा/Respondent by : Shri Manoj Kumar, Sr. DR

सुनवाई कᳱ ितिथ/ Date of hearing

:
19/05/2025

घोषणा कᳱ ितिथ/ Date of pronouncement :
:
19/05/2025

आदेश/ORDER

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-6, Delhi (hereinafter referred to as 'the CIT(A)') dated
27.09.2019, for assessment year 2015-16. 2. Shri Parveen Kumar, appearing on behalf of the assessee submits that the short issue in appeal is that the case of assessee was selected for limited scrutiny for the following reasons:
“(i) There is a large difference in the opening stock of the current year and the closing stock of previous year in P&L account as per return of income; &

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(ii) Mismatch in sales turnover reported in audit report and ITR.”

The Assessing Officer (AO) expanded the scope of scrutiny without approval from the Competent Authority and after rejecting books of accounts made GP addition of Rs.20,19,990/-. He submitted that without approval from Competent
Authority, the AO could not have travelled beyond the scope of limited scrutiny.
3. Per contra, Shri Manoj Kumar representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.
The ld. DR submits that AO rejected books of accounts of the assessee and thereafter, made best judgment assessment estimating GP of assessee for the impugned assessment year at 30% of total sales.
4. Both sides heard, orders of the authorities below examined. A perusal of assessment order dated 19.02.2017 shows that the case of assessee was selected for limited scrutiny, notice u/s. 143(2) of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) was issued to the assessee on 06.04.2016. The case of assessee was selected for limited scrutiny for the following reasons:
“(i) There is a large difference in the opening stock of the current year and the closing stock of previous year in P&L account as per return of income; &
(ii) Mismatch in sales turnover reported in audit report and ITR.”
5. The assessee is engaged in the business of financing, advancing of loans, investments and trading. The AO was required to restrict its inquiries only on the issues which were approved for limited scrutiny. The AO expanded the scope and made inquiries with regard to assessee’s investment in shares and valuation of shares. The AO made enquiries beyond the mandate of limited scrutiny and finally

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rejected assessee’s books and made GP addition of 30% of total sales. If at all, the AO was of the opinion that further investigation is require. The AO ought to have taken approval to convert limited scrutiny into complete scrutiny. In light of the fact that the Assessing Officer has travelled beyond his juri iction in making inquiries which were not part of the limited scrutiny, the assessment order is without juri iction. Hence, unsustainable.
6. In the result, impugned order is set aside and appeal of the assessee is allowed.

Order pronounced in the open court on Monday the 19th day May, 2025. (VIKAS AWASTHY)

᭠याियक सद᭭य/JUDICIAL MEMBER
िदʟी/Delhi, ᳰदनांक/Dated 19.05.2025

NV/-
ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to :
1. अपीलाथᱮ/The Appellant ,
2. ᮧितवादी/ The Respondent.
3. The PCIT/CIT(A)
4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी
5. गाडᭅ फाइल/Guard file.

BY ORDER,
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(Dy./Asstt.