9911796707
TMI Blog2019 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... und: 9,66,577/-) 2.1. Without prejudice, the learned assessing officer has erred in disallowing depreciation allowance without following the due process in law for converting appellant's limited scrutiny into complete scrutiny. 2.2 The learned assessing officer's failure to seek prior approvals for disallowance of appellant's claim for deduction which is outside the scope of limited scrutiny, makes the entire assessment process bad in law and the impugned order is therefore liable to be quashed. 2.3.The learned Commissioner of Income Tax (Appeals) instead of quashing the assessment order has erred in confirming the same. The orders as passed being bad in law and are liable to be quashed. (Tax Effect of above ground: 9,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umulative tax effect of all the grounds above: 9,66,577/-)" 3. It was submitted by ld. AR of assessee that ground no. 1 is general and the same is not pressed. Accordingly this ground is rejected as not pressed. 4. Thereafter it was submitted that in the present case, this issue was decided by CIT (A) as per Para no. 5 of the impugned order. He submitted that in this Para, issue was decided by CIT (A) on merit instead of deciding the issue on technical aspect. He submitted that on page no. 47 of paper book is the copy of notice issued by the AO and from the same, it is apparent that this notice u/s. 143(2) is for limited scrutiny and on two aspects i.e. i) Payment to related persons mismatch ii) Other expenses claimed in the Profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue(s), then, the case may be taken up for 'Complete Scrutiny' with the approval of the Pr. CIT/CIT concerned. He further submitted that on page no. 51 of the paper book is the instructions dated 14.07.2016 and these instructions are applicable for the cases selected under CASS 2015 and CASS 2016 and therefore, these instructions are applicable in the present case and in this instruction also, it was specified that the general scope of enquiry in scrutiny proceedings should be restricted to the relevant parameters which formed the basis for selecting the case for scrutiny and only in revenue potential cases, it was further provided that 'Complete Scrutiny' could be conducted, if there was potential escapement of income above a prescribed mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrongly claimed depreciation @ 30% on the vehicles owned by him claiming that the appellant is in to transportation business, On verification from the records, it is seen that the appellant utilizing its own vehicles to transport the mining material involving extraction of boulders from crushing area and from there to delivering them to the blasting site. The Assessing Officer has given a finding that such transportation is part and parcel of the mining business and as such there is no regular transportation activity whatsoever. Therefore Assessing Officer after considering the explanation to the show cause notice issued during the course of scrutiny has restricted the depreciation @ 15% as against 30% claimed by tile appellant. As there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, examination of depreciation is not covered in the two issues selected for examination for limited scrutiny. This is not the case of the revenue that the approval was taken by the AO from CIT/Pr. CIT for converting the scrutiny from limited scrutiny case to total scrutiny case. Hence, in my considered opinion, the AO is not justified in taking up the examination of depreciation claimed which is beyond the issues selected for limited scrutiny without obtaining prior approval from CIT/Pr. CIT. I, therefore, hold that AO was not justified in making disallowance out of the depreciation claim of the assessee and therefore, the same is deleted. 9. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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