Criteria-for-Scrutiny-Cases in DETAIL

In Detail –
The Board has laid down the following procedure for selection of returns / cases of *Non-Corporate Assessees* for scrutiny during the current financial year i.e. 2007-08.

The following categories of cases shall be compulsorily scrutinized; -

i) All assessment pertaining to search and seizure cases.


ii) All assessment pertaining to surveys conducted u/s 133A of the Income tax Act.

iii) All returns where deduction claimed under Chapter VIA of the Income tax Act is Rs. 25 lakhs or above in stations other than the cities on computer network.

iv) All returns, including those of non-residents, where refund claimed is Rs. 5 lakhs or above in stations other than the cities on computer network.

v) (a) All cases in which the CIT (Appeals) or ITAT has confirmed an addition / disallowance of Rs.5 lakhs or above or if the assessee has conceded on addition in any proceeding Assessment year and Identical issue is arising in the current year. But if the issue involves a substantial question of law, the cases may be picked up for scrutiny irrespective of the quantum of tax involved. However, if the addition has been deleted by a superior appellate authority and the Department has accepted that decision, the case need not be taken up for scrutiny.

vi) All cases in which an appeal is pending before the CIT (Appeal) against an addition / disallowance of Rs.5 lakhs or above, or the department has filed an appeal before the ITAT against the order of the CIT (Appeal) deleting such an addition / disallowance and an identical issue is arising in the current year. However, the quantum ceiling may not be taken into account if a substantial question of law is involved.

vii) All returns filed by statutory bodies, marketing committees and other authorities assessable to income tax.

viii) All cases of banks and Non-banking financial institutions with deposits
of Rs. 5 crores and above

ix) Cases of universities , educational institutions, hospitals, nursing homes and other institutions for
rehabilitation of patients (other than those, which are substantially financed by the Government), the aggregate annual receipts (including donations credited to the corpus / any other fund) of which exceed Rs 10 crores in Delhi, Mumabi, Chennai, Kolkota, Pune, Hyderabad, Bangalore and Ahmedabad and Rs. 5 crores in other places (Ref. S 10 (23c) & Rule 2 BC)

x)
All cases where exemption is claimed under section 11 of Income Tax Act and the gross receipts (including donations credited to the corpus / any other fund) exceed Rs. 5 crores in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs. 1 crores in other Places.

xi) All cases of stockbrokers and commodity brokers as well as their sub brokers where there are claims of bad debts of Rs. 5 lakhs or more.

xii) All cases of professionals with gross receipts of Rs.20 lakhs or more if total income declared is less than 20% of gross professional receipts.

xiii) All cases of deductions under sections 10 A / 10 AA / 10BA / 10 B of the I.T. Act exceeding Rs.25 lakhs.

xiv) All cases of contractors (excluding transporters) whose gross contractual receipts exceed Rs. 1 crores if total income declared from contract work is less than 5% of gross contractual
receipts.

xv) All cases of builders following project completion method.

xvi) All cases in which fresh capital introduced during the year exceed Rs.50 lakhs in Delhi, Mumbai,
Chennai, Kolkata, Pune, Hyderabad, Bangaloreand Ahmedabad and Rs.10 lakhs in other cities.

xvii) All cases in which new unsecured loan introduced during the year exceed Rs.25 lakhs.

xviii) All cases in which loss from house property is more than Rs.2,50,000/-

xix) All cases in which investment in property is more than five times the gross receipts (i.e. purchase of
property (008 from AIR) / (Gross Total Income (746) + Agricultural Income (762) + Income Claimed exempt (125)>5)

xx) All cases in which sum of short term capital gains u/s 111A and long term capital gain is more than Rs 25 lakh.

xxi) All cases in which sale of property has been shown as per AIR return but no capital gains have been
declared in the return of Income.

xxii) All cases in which commission paid is more than Rs. 10 lakhs

xxiii) All cases having business of real estates with gross turnover exceeding Rs. 5 crores.

xxiv) All cases having business of hotels/tour operations with gross turnover exceeding Rs. 5 crores if net profit shown is less than 0.05%

xxv) All cases in which total depreciation claimed at the rates of 80% and 100% is more than Rs.25 lakhs.

xxvi) All cases in which net agricultural income is more than Rs 10 lakhs.

xxvii) All cases covered by retrospective amendment in setion 80 IA of the I.T. Act, 1961 brought by the Finance Act, 2007 i.e. all persons who merely executive the civil construction work or any other works contract entered into with the undertaking or enterprise referred to in Sec 80 IA of I.T Act 1961.

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