Aakash Developers Vs ACIT (ITAT Mumbai)
ITAT Quashes Reassessment Because AO Relied on Investigation Wing Report Without Independent Inquiry; ITAT Deletes On-Money Addition Because Revenue Failed to Produce Seized Evidence; Reassessment Set Aside Because Borrowed Satisfaction Cannot Confer Jurisdiction Under Section 147; ITAT Rules Denial of Cross-Examination Violated Principles of Natural Justice; ITAT Holds Reassessment Cannot Be Based Solely on Investigation Wing’s Excel Sheet.
The Income Tax Appellate Tribunal (ITAT), Mumbai, allowed the appeal of the assessee and quashed the reassessment proceedings initiated under Section 147 of the Income-tax Act, 1961, holding that the reopening was based on borrowed satisfaction and lacked independent application of mind by the Assessing Officer (AO). Consequently, the addition of ₹45 lakh towards alleged unexplained investment in the form of cash on-money and the reassessment order itself were held to be invalid.
The assessee, a partnership firm engaged in the business of builders and developers, had originally filed its return declaring total income of ₹88.45 lakh. Subsequently, the assessment was reopened through notice issued under Section 148 dated March 31, 2017, on the basis of information received from the Investigation Wing alleging that the assessee had paid ₹45 lakh in cash as on-money to Cosmos Group for the purchase of a flat. The information was stated to have emerged from search proceedings conducted in the case of Cosmos Group.
