Sankhwal Realtors Pvt. Ltd. Vs ITO (ITAT Delhi)
Reassessment Quashed Where No Addition Made on Recorded Reasons – Addition u/s 69C Deleted as Reassessment Void- AO Cannot Travel Beyond Recorded Reasons
Sankhwal Realtors Pvt. Ltd. had filed its return for AY 2012-13 declaring a nominal loss of Rs. 11,859. The company had purchased land at Village Dera Mandi, New Delhi for Rs. 1.80 crore. AO, based on information from Investigation Wing, alleged that the actual purchase price was Rs. 39.18 crore & recorded reasons that income of Rs. 37.38 crore had escaped assessment. On this basis, reassessment was initiated u/s 148.
However, in the reassessment order dated 07.12.2019, AO did not make any addition with respect to the alleged cash investment of Rs. 37.38 crore. Instead, he made an addition of Rs. 85 lakh u/s 69C, being the difference between Rs. 1.92 crore (sale deed plus stamp duty) & Rs. 1.07 crore recorded in books. The CIT(A), NFAC, confirmed this addition.
Before Tribunal, the Assessee contended that since no addition was made on the very issue for which reasons were recorded, reassessment was bad in law. Reliance was placed on judgments of Ranbaxy Laboratories Ltd. Vs. CIT (336 ITR 136, Delhi HC), ATS Infrastructure Ltd. Vs. ACIT (473 ITR 595, Delhi HC), CIT(E) Vs. Monarch Educational Society (387 ITR 416, Delhi HC) & CIT Vs. Jet Airways (I) Ltd. (195 Taxman 117, Bombay HC). It was submitted that AO had no jurisdiction to travel beyond the reasons recorded.
