HARGOVIND MOTIBHAI DESAI,AHMEDABAD vs. ITO WARD 3(3)(8), AHMEDABAD (EXISTING ITO WARD 3(3)(1), AHMEDABAD), AHMEDABAD

The assessee has raised the following grounds of appeal:-

That the notice issued under section 143(2) of the Act and all the subsequent proceeding are bad in law and therefore the Order passed by Assessing Officer is required to be quashed and the additions made therein are to be deleted in full

That the learned National Faceless Appeal Centre, Delhi has erred in law and facts by confirming the addition of Rs. 27,63,050/- (Rs.32,57,364- Rs.4,94,314), under section 68 of the Act, on the account of treatment of ITA Nos. 2190-2191/Ahd/2024 Asst. Years : 2015-16 & 2016-17 - 2–

That the learned National Faceless Appeal Centre, Delhi has erred in law and facts by treating rent income of Rs. 6,60,000/- as income from other sources, out of offered business income and against which expenses of Rs. 88,114/- has been allowed, while computing the income from other sources and finally computed income from other sources of Rs. 5,71,886/

That the learned National Faceless Appeal Centre, Delhi has erred in law and facts by confirming the addition of Rs.1,00,450/- (Rent Rs.1,43,500 statutory Deduction Rs. 43,050) under the head Income from House Property and therefore the learned AO should be directed to treat said rent income Rs.1,43,500/-, as business income while computing the total income.

That the learned National Faceless Appeal Centre, Delhi has erred in law and facts by confirming the addition of Rs. 16,00,000/- under section 68 of the Act for cash deposit of cars sales and therefore the learned AO should be directed to delete the said addition while computing the total income.

That the learned National Faceless Appeal Centre, Delhi has erred in law and facts by confirming the addition of Rs.3,00,000/- under section 68 of the Act for the advance cash received for agriculture produce and therefore the learned AO should be directed to delete the said addition while computing the total income.

That the Learned National Faceless Appeal Centre, Delhi has erred in law and facts by confirming the addition of capital gain on sale of assets of Rs.1,36,642/- as the block of asset has not been exhausted and it is continue and the amount of Rs.1,36,642/-is the net gain on sale of cars as per the books of account and therefore the Ld.AO should be directed to delete the said addition while computing the total income.

The assessee is engaged in the business of leasing/renting properties and agricultural activities. The return of income was filed on 18.01.2016 declaring total income at Nil. The case was selected for limited scrutiny under CASS for the issue of (i) Income from heads other than ITA Nos. 2190-2191/Ahd/2024 Asst. Years : 2015-16 & 2016-17 - 3–

1 The assessee challenged these additions before the Ld. CIT(A), who confirmed the action of the Assessing Officer.

Before us, the Ld. AR submitted that the case was selected for limited scrutiny for the issue of "Agricultural Income". However, the Assessing Officer made several additions unrelated to the limited scrutiny issue without seeking prior approval for conversion into complete scrutiny. The Ld. AR, in this regard, placed reliance on the decision of the Co- ordinate Bench in the case of Shri Rajnikanth S. Bhalavat vs. ACIT in ITA No. 495/Ahd/2019, wherein the assessment was quashed for similar reasons.

1 We observe that apart from agricultural income, the Assessing Officer made additions in respect of Sale of cars, Advances for agricultural produce Capital gain, Disallowance of expenses, rental income etc. We find that none of these issues were covered under the scope of the original limited scrutiny notice under section 143(2) and the Revenue has not brought on record any approval obtained from the competent authority for converting

2 Since we are setting aside the assessment order on juri ictional grounds, we do not express any opinion on the merits of the case. The assessee is at liberty to raise all legal and factual contentions during the course of the de novo proceedings.

In the result, both the appeals of the assessee are allowed for statistical purposes.

अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file.