In the present case Hon’ble appellate tribunal held that the under the limited scrutiny the scope of enquiry is not limited to verifying whether the assessee had followed the percentage completion method or not. Rather the scope of the limited scrutiny was to determine whether the assessee had followed the percentage completion method and secondly, how the method had been actually followed while accounting for the real estate transactions undertaken by the assessee during the relevant assessment year. Therefore, the AO had not exceeded the scope of enquiry under the limited scrutiny assessment. Thus, the AO is justified in making addition on revaluation of stock. (AY.2015-16)
Aman City Developers P. Ltd. v. Asst. CIT (2023) 105 ITR 53(SN) (Chd) (Trib)
S. 143(3) : Assessment-Scope of scrutiny-AO’s jurisdiction is not limited to just valuing the closing stock but also determining the project cost, project revenue and closing WIP at the end of reporting period-Thus, AO is justified in making addition by revaluing the stock. [S. 145]