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TMI Blog2013 (1) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... - on 6.7.2007 which was later revised on 19.2.2009 declaring income of ₹ 1,89,160/-. The case was processed under Section 143(1) and later selected for scrutiny assessment under CASS through issue of notice under Section 143(2). An order under Section 143(3) was framed on 15.5.2009 accepting the income declared by the assessee at ₹ 1,89,160/-. Subsequently it was noticed that:- i) The assessee was regularly involved in the purchase and sale of shares and mutual funds, and hence, the same should have been treated as income from business; ii) The assessee had claimed an amount of ₹ 20,479/- as exempt under Section 10(33) of the Income Tax Act, 1961. The same was wrongly allowed as deduction; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck-in-trade. Previous years balance sheets were furnished along with the return of income of earlier years; b) during the earlier years as well as in the current year the income from purchases and sale of shares/mutual funds were disclosed as short term capital gain and that the same was accepted by the A.O. for the Assessment Year 2006-07 in an order passed under Section 143(3) of the Income Tax Act, 1961; c) that no borrowed funds were involved and the purchases were made out of her own funds; d) no expenses were claimed by the assessee under the head business or profession . The other points raised in the notice under Section 263 with regard to taxability of income under the head income from house proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al funds which are placed on records. After discussion income declared by the assessee at ₹ 1,89,160/- is accepted. 8. The scope of enquiry under CASS is defined by the Board in CBDT Circular F.No.225/26/2006-ITA-II(Pt.) dt. 23rd May,2007. This is extracted for ready reference. F.No.225/26/2006-ITA-II(Pt.) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dt. 23rd May,2007 To: All Chief Commissioners of Income Tax All Directors General of Income Tax Sir/Madam, Sub: Selection of cases for scrutiny on the basis of data in AIR returns and subsequent assessment proceedings reg. Kindly refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s invited to Board s letter of even number dt. 23rd May,2007 regarding scope of enquiry in the scrutiny cases selected only on the basis of information received through the AIR returns. 2. The above mentioned guidelines have been reconsidered by the Board and it has been decided that the scrutiny of such cases would be limited only to the aspects of information received through AIR. However, a case may be taken up for wider scrutiny with the approval of the administrative Commissioner, where it is felt that apart from the AIR information there is a potential escapement of income more than ₹ 10 lacs. 3. It has also been decided that in all the cases which are picked up for scrutiny only on the basis of AIR information, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case has been selected for scrutiny only on the basis of information received through the AIR returns. In our view there is no error, much less prejudice caused to the Revenue warranting revision under Section 263 of the Income Tax Act, 1961. 13. The CIT, Delhi IX, after extracting the arguments of the assessee from pages 2 to 12, concluded as follows:- I have carefully considered the facts and circumstances of the case, the submissions of the assessee and I find that:- 1) The assessee s reliance on Circular no.4 of 2007 is well placed. Accordingly the Assessing Officer is directed to examine the sale and purchase of shares and mutual funds in the light of the above circular and tax the income accordingly. 2) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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