Tirupati Vessel Pvt. Ltd. Vs DCIT (ITAT Kolkata)
Reopening must survive on the reason recorded; if no addition is made on that reason, reassessment collapses- ITAT Kolkata Quashes Reassessment
Kolkata Tribunal quashed reassessment proceedings, holding that reopening u/s 148A/147 was invalid as no addition was made on the very ground for which case was reopened.
Assessee, engaged in shipping business, filed return declaring income of ₹43,001/-. Case was reopened u/s 148A(d) alleging suspicious transactions of ₹49,69,671/-. However, in reassessment order, no addition was made on that ground. Instead, AO taxed ₹1.91 crore as deemed income u/s 172(2) relating to freight of Bangladesh-based shipping lines.
CIT(A) set aside assessment & remanded matter to AO for de novo proceedings. Assessee challenged validity of reopening before Tribunal.
Assessee argued that since reopening was based on alleged suspicious transaction of ₹49,69,671/-, but no addition was made on that ground, jurisdiction under s.147 itself failed. Reliance was placed on Jet Airways Ltd. vs. CIT (331 ITR 236, Bom HC), Ranbaxy Laboratories Ltd. vs. CIT (336 ITR 136, Delhi HC), and BB Poddar Foundation for Education vs. ITO (448 ITR 695, Cal HC), all holding that if no addition is made on recorded reason, reassessment cannot stand.
