DCIT Vs Sahana Dwellers Private Limited (ITAT Mumbai)
One Day, Two Opposite Assessments: ₹9.68 Crore Reassessment Quashed
The Mumbai Bench of the Income Tax Appellate Tribunal upheld the CIT(A)’s order invalidating reassessment proceedings initiated under section 147 where the very same issues had already been subjected to revisionary proceedings under section 263 and subsequently examined by the Assessing Officer. The Tribunal held that the statutory scheme did not permit overlapping revisionary and reassessment jurisdiction over identical subject matter.
Sahana Dwellers Private Limited, engaged in construction of buildings, filed its return for AY 2015-16 declaring a loss of Rs.2,93,77,746/-. The original assessment was completed under section 143(3) on 28.12.2017. Thereafter, the Principal Commissioner invoked section 263 in relation to two issues: alleged capitalization of proportionate interest expenditure of Rs.7.91 crores to capital work-in-progress and an alleged differential value of Rs.1.77 crores concerning sale of flats. By order dated 10.03.2021, the assessment was set aside with directions to verify these issues.
Pursuant to the section 263 order, the Assessing Officer examined the assessee’s submissions and passed an assessment order on 28.03.2022 under section 144 read with sections 263 and 144B. The Assessing Officer expressly recorded that the assessee’s contentions had been verified and no variation was found. Consequently, no addition was made on either issue.
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