M.K. Shelters Vs ITO (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has set aside additions to the income of M.K. Shelters, a partnership firm, for Assessment Years (AYs) 2009-10, 2011-12, 2012-13, and 2015-16. The Tribunal’s decision, issued on May 23, 2025, primarily hinged on the lack of concrete evidence linking the firm to alleged cash transactions and significant procedural irregularities by the Assessing Officer (AO).
The case, M.K. Shelters Vs. ITO, involved appeals by the assessee against orders from the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi.
Background of the Case
M.K. Shelters, identified by PAN AAJFM1339H, asserted its dormancy since 2003, with no business transactions. However, the Assessing Officer initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, based on information from an investigation wing. This information stemmed from a search and seizure operation conducted on M/s. Ekta & Bhoomi Group on October 5, 2015.
During this search, a statement was recorded under Section 131 of the Act from Mr. Akshay Doshi. The AO’s information indicated that Mr. Mehfus Bhai, a partner in M.K. Shelters, had allegedly sold Transferable Development Rights (TDR) to Mr. Akshay Doshi and received substantial cash payments across various financial years:
- FY 2008-09: Rs. 3,24,55,000/-
- FY 2010-11: Rs. 1,98,43,000/-
- FY 2011-12: Rs. 38,15,000/-
- FY 2014-15: Rs. 37,29,700/-
Based on this, the AO treated these amounts as business income in the hands of M.K. Shelters. For AYs 2011-12, 2012-13, and 2015-16, the additions were made on a protective basis, with the substantive addition placed in the hands of M/s. M.K. Shelters-JV (PAN AAMFM2671H).
