DICET Creative Ventures (India) Pvt. Ltd. Vs DCIT (ITAT Mumbai)
Wrong Sanction, Wrong Facts & Double Addition- 1,053 Crore Reassessment Collapses u/ss 151, 68 & 69C
The controversy
The assessee, DICET Creative Ventures (India) Pvt. Ltd., formerly Morgan Credits Pvt. Ltd., faced reassessments for AYs 2017-18 & 2018-19 based on Investigation Wing information concerning Yes Bank, certain NBFCs & alleged financial accommodation connected with its former management.
For AY 2017-18, the AO treated a ₹300 crore loan from Indiabulls Housing Finance Ltd. as unexplained cash credit u/s 68 and disallowed related interest of ₹34.13 crore u/s 69C.
For AY 2018-19, the AO added ₹600 crore allegedly received from Reliance Capital Ltd. and another ₹50 crore from Nippon India Mutual Fund u/s 68, besides disallowing interest of ₹69.41 crore u/s 69C.
The CIT(A) quashed the reassessments for defective sanction u/s 151 and also deleted the principal additions on merits. The Revenue appealed, while the assessee challenged a surviving disallowance of ₹1,92,404 u/s 37(1).
Approval came from the wrong authority
The notices u/s 148 were admittedly issued after expiry of three years from the end of the relevant assessment years.
Under substituted s.151, where the notice is issued beyond three years, approval must come from the specified authority under s.151(ii)—the Principal Chief Commissioner or Chief Commissioner, as applicable.
