ACIT Vs Sahara City Homes (ITAT Lucknow)
ITAT Quashes Reassessment Because CIT(A) Had No Power to Direct Reopening for Another AY; Reassessment Notice Invalid Because Basis of CIT(A) Direction Was Expunged; ITAT Dismisses Revenue Appeals Because Section 148 Notice Was Time-Barred; Reassessment Proceedings on WIP and Customer Advances Quashed Due to Invalid Section 148 Notice.
In ACIT Vs Sahara City Homes, the Lucknow Bench of the Income Tax Appellate Tribunal (ITAT) dismissed three Revenue appeals relating to reassessment proceedings against different Sahara City Homes group entities for Assessment Year 2011-12 and upheld the orders of the National Faceless Appeal Centre (NFAC) quashing the reassessment proceedings.
The assessees were partnership firms engaged in construction, township development, housing projects, and real estate activities. During reassessment proceedings initiated under Sections 147 and 148, the Assessing Officer (AO) made additions under Sections 68 and 69C in relation to work-in-progress (WIP), customer advances, and liabilities allegedly taken over from Sahara India Commercial Corporation Ltd. (SICCL) and Sahara Prime City Ltd. (SPCL).
In the case of Sahara City Homes Karnal, the AO treated WIP of Rs.146.43 crore and Rs.30.05 crore as unexplained expenditure under Section 69C and customer advances aggregating to more than Rs.2.77 crore as unexplained cash credits under Section 68. Similar additions were made in the cases of Sahara City Homes Kanpur-1 and Sahara City Homes Anand.
