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2023 (11) TMI 405 - ITAT BANGALOREAdditions beyond the scope of limited scrutiny assessment - Conversions of Limited Scrutiny to Extensive Scrutiny - as a result addition of long term capital gain AND disallowing the deduction claimed u/s. 54F - AR argued that the notice issued u/s. 143(2) was a limited scrutiny to verify the huge cash deposit - HELD THAT:- CASS is a system driven identification of returns for limited scrutiny. The picking up of a return under CASS for scrutiny must be restricted only to the selected reason. Therefore procedurally, the Ld.AO must confine the scrutiny to the limited reasons selected under CASS. Details in respect of sale deed / purchase deed, the exemption claimed by the assessee in the return of income were also called for along with the details of large cash deposits. However we note that no steps has been taken to convert the limited scrutiny into complete scrutiny wherein the AO could have had the jurisdiction to verify other details. Under such circumstances, we are of the considered view that the Ld.AO has overstepped his jurisdiction by making an addition in the hands of the assessee by disallowing the deduction claimed u/s. 54F. We direct the Ld.AO to delete the disallowance so made. Unexplained Cash Deposits/income u/s. 69A r.w.s 115BBE - cash received from contract receipts is not acceptable as Assessee has not provided any confirmation or any documents/contract agreements from his clients to prove that he has undertaken and performed the contract work, nor submitted the statement of affairs of his business to support the income earned - HELD THAT:- Total cash deposited during the relevant Financial Year is Rs. 41,19,500/-. AO has made disallowance of Rs. 43,39,000/- u/s. 69A r.w. 115BBE of the act. There is a disparity in the cash deposit as per the statement filed by the assessee, scanned and reproduced hereinabove vis-a-vis the observation of the Ld.AO in para 5 of the assessment order. The summary of the total deposits provided by the assessee reveals that in Canara Bank account there is a deposit of Rs. 37 Lakhs and in State Bank of Mysore account, a sum of Rs. 4,19,500/- was deposited. Assessee has not provided any details as to the source of such cash deposited for the relevant financial year except for stating that these are business receipts - we remand this issue back to the Ld.AO for necessary verification in accordance with law. Assessee is directed to file all relevant details in respect of the source of actual cash deposited into the bank accounts in order to exonerate himself from the rigour of section 69A r.w. 115BBE of the Act. Ground partly allowed for statistical purpose
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