AGRATA REAL ESTATE PRIVATE LIMITED,THANE WEST vs. ACIT, CC-2(2), MUMBAI, MUMBAI

In the instant case, the Assessee declared its total income at Rs. ‘Nil’ by filing its return of income on dated 17.03.2018, which was subsequently selected for limited scrutiny under CASS by issuing notice dated 09.08.2018, u/s. 143(2) of the Act, for the following issues:

The AO, thus vide assessment order dated 09.12.2019, u/s. 143(3) of the Act ultimately made the addition of Rs. 25,73,000/- on account of cash deposits made during demonetization period in the bank account maintained with Axis bank, as unexplained income/money u/s. 69A of the Act, as per 03rd issue raised vide notice dated 19.02.2019, u/s. 142(1) of the Act and added the said amount to the total income of the assessee taxing the same u/s. 115BBE of the Act.

Admittedly, the case of the assessee was selected for limited scrutiny for two issues such as ‘firstly’ expenses incurred for earning exempt income and ‘secondly’ investments/advances/loans but not for the 3rd issue qua abnormal increase in cash deposit during demonetization period, as compared to pre demonetization period, which resulted into making the addition without converting the case into full scrutiny and/or without taking approval of the Appropriate Authority, as required as per CBDT instruction no. 20/2015. Thus, the addition made by the AO and affirmed by the Ld. Commissioner, is liable to be deleted. Resultantly, the same is deleted.