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2023 (1) TMI 707 - AT - Income TaxSelection of cases for scrutiny - Addition u/s 68 or 69A - investment made by the firm, the financial transactions of the appellant were scrutinised and eventually the cash deposits made into her bank accounts were brought to tax - scope of limited scrutiny proceedings under CASS selected for the reason of verification of source of investment in immovable property which was not at all, purchased by the assessee individual but by the partnership firm wherein the assessee was a partner - appellant’s case was selected for scrutiny under CASS mechanism limiting the scope thereof to verification of large investment made by the assessee - HELD THAT:- In the absence of any large investment made by the appellant during the impugned assessment year under adjudication, the scope of limited scrutiny meets dead-end, however the Ld. FAA without following the CBDT instruction No. 7/2014, 20/2015 and 5/2016 and also the CBDT letter dated 13 No. 2017, plagiarized the firm’s investment into the hands of assessee and opined that the said addition should have been carried out u/s 69A as unexplained money instead of bringing to tax as cash credit u/s 68 of the Act. All the more we find that, the very basis of initiation of scrutiny assessment is the large investment made by the firm wherefore the appellant is one of the signatory partners. However it shall be worthy to note that, for the impugned year the appellant has made no investment in her individual capacity so has to trigger any basis for scrutiny assessment on the prescribed criteria of investment, thus the very basis of initiation of scrutiny in the appellant’s case fails, consequently the impugned assessment stand with no legs in the eyes of law, and we hold as such in the light of ratio laid down in the case of “CIT Vs Best Plastics (P) Ltd” [2006 (4) TMI 53 - HIGH COURT, DELHI] Also it shall not be out of the box to quote the decision of Hon’ble Jurisdictional Bombay High Court in “Bombay Cloth Syndicate Vs CIT” [1992 (9) TMI 7 - BOMBAY HIGH COURT] whereby their lordship have held that, the instruction issued by the mother body i.e. CBDT undisputedly are binding on the department and any action in violation thereof renders it as untenable in law, consequently in the extant case, assessment been carried out in violation of instruction issued by CBDT deserves to be quashed, ergo we set-aside the first appellate order passed u/s 250 and quash the order of assessment passed u/s 143(3) of the Act as bad in law. Appeal of assessee allowed.
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