Criteria for selection of scrutiny Assessment u/s 143(3)

This query is : Resolved

BIJAY MITTAL (Querist)
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04 March 2008 Assessee is a partnership firm consisting of four partners.All the partner together introduces a sum of Rs 15 lakhs in the form of capital introduction.The query is whether the firm falls within the criteria for scrutiny selection considering that it comes under the non metro city

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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05 March 2008 In respect of non-corporates if the fresh capital introduced exceeds Rs 50 lakh in respect of cases in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad are liable for scrutiny. In respect of other places the monetary li mit for fresh capital introduction is Rs 10 lakh for scrutiny selection.

Where the unsecured loans introduced during the year exceeds Rs 25 lakh, such case is also covered.

Professionals with gross receipts of Rs 20 lakh or more but the income returned is less than 20 per cent are liable for scrutiny of their cases.

Cases were the CIT or ITAT has confirmed addition or disallowance of Rs 5 lakh or above in an earlier year and the identical issue arising in the current year.

All cases in which the appeal is pending before CIT or pending before ITAT in respect of appeal preferred by the Department relating to addition or disallowance of Rs 5 lakh and the identical issue arising in the current year.

All cases where deduction under Sections 10A/10B/10BA/10AA exceeds Rs 25 lakh.

Commission paid during the year if more than Rs 10 lakh.

All cases where depreciation claimed at the rates of 80 per cent and 100 per cent is more than Rs 25 lakh.

Deduction under Sections 80-IA (4), 80-IB, 80-IAB, 80-IC, 10(23C), 10A, 10AA, 10B or 10BA is claimed for the first time. All returns filed in response to notice under Section 148 shall be liable for scrutiny.

While above are some of the parameters set for selection of cases for scrutiny, there is no general exemption or relief from scrutiny for admitting higher income by the taxpayers