Case Law Details
Sheela Foam Ltd. Vs DCIT (ITAT Delhi)
The issue under consideration is whether the re-opening of assessment is valid even if there is no addition on subject-matter being basis for issuing notice under section 148, rather AO made addition on other counts?
ITAT states that, applying the principle laid down by the Hon’ble Bombay High Court in Jet Airways (I) Ltd.(supra) and Hon’ble Delhi High Court in Ranbaxy Laboratories Ltd. vs CIT (supra), they hold that in the facts and circumstances of the case where the basis for issuing the notice u/s 148 of the Act was, on account of reasons recorded for re-opening the reassessment u/s 147 of the Act, i.e. share application money received from VPC Financial Services Ltd. of Rs.10 Lakhs and no addition on this account has been made in the hands of the assessee, then any other addition made in the case of the assessee would not survive. Accordingly, ITAT hold so. Thus, ITAT decide the preliminary issue raised before us i.e. one of the aspect of the preliminary issue raised before us, where no addition has been made on account of the reasons recorded for re-opening the assessment under the provisions of section 147/148 of the Act, then no addition can be made in the hands of the assessee on any other account. Hence, the order passed u/s 147 r.w.s. 143(3) of the Act is invalid. Accordingly, in the result, the appeal of the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
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