Ganesh Steel & Alloys Ltd. Vs DCIT (ITAT Kolkata)
In the case of Ganesh Steel & Alloys Ltd. vs DCIT, the Income Tax Appellate Tribunal (ITAT) Kolkata quashed the reassessment conducted by the Assessing Officer (AO) under Section 147/148 of the Income Tax Act for the assessment year 2012-13. The case stemmed from an allegation of bogus purchases worth ₹38.75 lakhs from M/s Chakradhari Industries. The assessee had originally declared nil income, but the AO reopened the case under suspicion of these fictitious transactions. However, upon investigation, the Tribunal found that the purchases were duly recorded in the company’s books and no unexplained income existed.
The primary legal issue revolved around the fact that the AO had initiated reassessment proceedings based on reasons recorded under Section 148(2), yet no addition was made on this specific ground. Instead, the AO made an addition of ₹47.03 lakhs under Section 69C for bogus expenditures, which was unrelated to the recorded reason for reopening the case. The Tribunal referenced various precedents, including M/s Infinity Infotech Parks Ltd. and CIT vs Jet Airways India Ltd., holding that once no addition is made on the recorded issue, the AO cannot make other unrelated additions in the reassessment.
