PCIT CENTRAL -1 Vs Naveen Infradevelopers & Engineers Pvt Ltd (Delhi High Court)
In PCIT CENTRAL-1 Vs Naveen Infradevelopers & Engineers Pvt Ltd, the Delhi High Court addressed an appeal by the Revenue challenging the Income Tax Appellate Tribunal (ITAT) order, which had favored the assessee, Naveen Infradevelopers & Engineers Pvt Ltd. The Revenue’s appeal stemmed from the reassessment proceedings initiated under Section 147 of the Income Tax Act for the assessment year (AY) 2012-13. Initially, the Assessing Officer (AO) issued a notice under Section 148, asserting that the company’s declared turnover did not align with the receipts recorded in its bank accounts. The company disclosed a turnover of ₹52.5 crore, but the bank receipts were reported to exceed ₹139 crore, prompting the reassessment.
The assessee explained the discrepancy by attributing the additional receipts to loans. The AO, after considering other transactions, found ₹24 crore of the receipts unexplained, which led to an income assessment of ₹65.4 crore. However, when the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], the appeal was allowed, with the CIT(A) ruling that since no income had been added based on the reasons for the reopening of the assessment, no further additions could be made. The CIT(A) reasoned that the AO’s order could not introduce new additions beyond the scope of the grounds on which the reassessment was initiated.
