Dove Buildcon Vs ITO (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) considered an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals) [CIT(A)] for Assessment Year (AY) 2016-17. The dispute arose from reassessment proceedings initiated under sections 147 and 148 of the Income-tax Act, 1961, culminating in an addition of Rs. 2 crore under section 69 read with section 115BBE on account of alleged unexplained investment in immovable property.
The assessee, a partnership firm engaged in land and plot development, had not filed its return of income for the relevant assessment year under section 139(1). According to departmental information, the assessee had entered into a substantial financial transaction involving the purchase of immovable property worth Rs. 2 crore during Financial Year (FY) 2015-16, relevant to AY 2016-17. Based on this information, proceedings under section 148A were initiated. An order under section 148A(d) was passed, followed by issuance of notice under section 148 after obtaining approval under section 151. Notices under section 142(1), reminders, and show cause notices were subsequently issued.
In response to the show cause notice, the assessee submitted that the land transaction did not pertain to FY 2015-16 but related to FY 2014-15, corresponding to AY 2015-16. The assessee stated that the land had been acquired for business purposes and that the purchase consideration was financed through partners’ contributions and unsecured loans. Supporting documents, including bank records, details of partners’ capital and loans, unsecured loan details, and the land purchase agreement, were furnished. The assessee also explained that no return had been filed because there was no taxable income during the relevant year.
