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TMI Blog2021 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the capital gain earned by the assessee in mutual funds and other securities. There is no evidence placed before us that such a limited scrutiny assessment proceedings have been converted into complete scrutiny proceedings. The assessment order as well as the orders of the learned and CIT A also does not show any indication of the same. If the Assessing Officer desires to look into any other adjustment or examination of any issue, then what is mentioned as reasons for limited scrutiny, the CBDT has issued a clear instruction No. 5 of 2016 dated 14.07.2016 wherein after obtaining the administrative approval from the Pr. Commissioner of Income Tax or CIT, as the case may be, he can embark upon other issues by converting it into a complete scrutiny case from limited scrutiny case. In the present case, no such exercise has been shown to us. The AO is also required to intimate the assessee regarding such conversion of case into complete scrutiny. In the present case, it is apparent that the ld. AO has touched upon the issues, which are not part of the limited scrutiny. Therefore, the same deserves to be deleted on this account only. In view of this, we direct the ld. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of appeal as under:- 1. That on the facts and in the circumstances of the case and in law, Id C1T-A grossly erred in making re-characterization of the income from capital gains to business head qua subject share sale transaction firstly without any adequate and corresponding show cause notice of enhancement, secondly on extant facts said enhancement could not have been done as per dear proscription under the statute and thirdly only limited scrutiny proceedings was going on before Ld AO as per notice u/s 143(2) dated 20/09/2016 on issue of deduction claimed under the head capital gains which was never converted to complete scrutiny as per extant CBDT instructions and fourthly said re-characterization on its merits also is misdirected and clearly against the principle of consistency and CBDT circulars which covers the issue in favor of appellant on its merits. Therefore returned income may please be restored. 2. That on the facts and in the circumstances of the case and in law, Id C1T-A grossly erred in making re-characterization of the income from capital gains to business head qua subject share sale transaction and making resultant enhanced addition of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact assessee has incurred loss on sale of shares. The ld. CIT (Appeals) rejected the contentions of the assessee. He prepared trading account of both the scripts and determined profit by valuing closing stock of each script. He thus, enhanced the income of the assessee holding that the profit of ₹ 3,14,789/- and ₹ 1,25,376/- in the shares of Infosys Ltd. and Tech Mahindra Ltd. are chargeable to tax as business income. Thus, he dismissed the appeal and enhanced the income. 5. The ld. AR raised first ground of appeal that when the case of the assessee was selected under the limited scrutiny criteria, without converting same into complete scrutiny, the ld. Assessing Officer as well as the ld. CIT (Appeals) could not have gone on making additions and adjustments on issues other than issues of limited scrutiny. He submitted that there is a procedure aid down for the same. He referred to various instructions and circulars on this point. He also stressed the argument by placing reliance on several decisions. 6. On the merits of the issue he also raised several arguments contesting that the addition made by the Assessing Officer by disallowing the loss, enhancement b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no evidence placed before us that such a limited scrutiny assessment proceedings have been converted into complete scrutiny proceedings. The assessment order as well as the orders of the learned and CIT A also does not show any indication of the same. If the Assessing Officer desires to look into any other adjustment or examination of any issue, then what is mentioned as reasons for limited scrutiny, the CBDT has issued a clear instruction No. 5 of 2016 dated 14.07.2016 wherein after obtaining the administrative approval from the Pr. Commissioner of Income Tax or CIT, as the case may be, he can embark upon other issues by converting it into a complete scrutiny case from limited scrutiny case. In the present case, no such exercise has been shown to us. Further, the above instruction clearly shows that only after conversion of case to complete scrutiny and after following the detailed procedure contained therein, the Assessing Officer may examine the issues other than limited scrutiny issue. The AO is also required to intimate the assessee regarding such conversion of case into complete scrutiny. In the present case, it is apparent that the ld. AO has touched upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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