Naresh Kumar Garg Vs ACIT (ITAT Delhi)
When the grounds for reopening the reassessment do not exist any longer and no additions were ultimately made on that account, the addition in respect of the other items, which were not part of the ‘ reasons to believe’cannot be made.
ITAT states that it is evident that the Assessing Officer himself did not make addition in respect of the first part of the items of reason recorded i.e. freight. The addition made by the Assessing Officer on the second part of the reason recorded i.e. disallowance of crane charges and boki charges has been deleted by the Ld. CIT(A). Thus ITAT find that no addition on account of the items of reasons recorded is in existence after the order of the Ld. CIT(A). As per the record, the Revenue is not in appeal against said deletion by the Ld. CIT(A). In the circumstances, following the decision of the Hon’ble High Court in the case of Adhunik Niryat Ispat Ltd (supra) and Ranbaxy Laboratories Ltd (supra) , the additions made on account of the items other than the items in reasons recorded , cannot survive. ITAT direct the AO to delete the additions accordingly. The issue in dispute involved in the grounds raised by the assessee is accordingly allowed in favour of the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal has been preferred by the assessee against order dated 29/08/2016 passed by the Ld. Commissioner of Income-tax (Appeals), Hisar [in short the Ld. CIT(A)] for assessment year 2009-10.
2. In the grounds of appeal raised, the assessee is aggrieved with the legality of reassessment proceedings completed under section 143(3) read with section 147 of the Income Tax Act, 1961 (in short the Act) as well as additions made in reassessment proceeding.
3. Briefly stated, facts of the case are that the assessee is a government contractor and filed return of income on 30/09/2009 declaring total income of Rs.26,79,270/-. The assessment under section 143(3) of the Act was completed on 20/09/2011 after making addition of Rs.2,00,000/- to the returned income. Subsequently, the Assessing Officer recorded reasons on 01/03/2013 that income of the assessee had escaped assessment and issued notice under section 148 of the Act. The reassessment proceedings in the case were completed on 21/03/2014, wherein following additions were made:
