Shaival Comcon LLP Vs ITO (ITAT Ahmedabad)
Assessee, was subjected to reassessment proceedings u/s 147 on the basis of information that it had not filed a return of income for AY 2017-18 & had purchased immovable property worth ₹4.50 crore during the relevant financial year.
AO issued notices but recorded no compliance from Assessee. Consequently, assessment was completed ex-parte u/s 144 r.w.s. 147, with the entire amount of ₹4.50 crore treated as unexplained investment u/s 69, taxable at the rate prescribed u/s 115BBE.
In appeal, the assessee contended it had in fact filed its return on 18.09.2017 declaring a small loss. The amount of ₹4.50 crore represented advance paid for purchase of property, duly reflected in the “Loans & Advances” schedule of the balance sheet. The actual purchase of the property took place in the subsequent financial year through a registered sale deed dated 29.04.2017. AO’s recorded reasons for reopening contained the phrase “either…or”, reflecting uncertainty as to whether the amount was unexplained investment or unexplained expenditure, thus showing non-application of mind.
CIT(A) noted that the assessment had been made ex-parte & crucial facts could not be examined. In the interest of justice, the matter was remanded to AO for fresh examination.
