DCIT Vs Rudra Buildwell Homes Pvt. Ltd. (ITAT Delhi)
No Proper Sanction No Reopening- Double Addition Not Permissible as Funds Already Taxed in Lender’s Hands – ITAT Delhi Quashes Reopening & Deletes 20.25 Cr Addition
The primary issue was validity of reassessment proceedings initiated u/s 147 r.w.s. 148 based on notice issued u/s 148A(d) dated 23.05.2022. Assessee challenged reopening on the ground that since more than three years had elapsed from end of AY 2016-17, mandatory approval u/s 151(ii) from Principal Chief Commissioner or equivalent authority was required, but Revenue had obtained approval only u/s 151(i). Reliance was placed on Union of India Vs Rajeev Bansal [2024] 167 taxmann.com 70 (SC). Tribunal found merit in this plea & held that the impugned reassessment itself was bad in law. Accordingly, reopening was quashed.
Even though this finding was sufficient to dispose of the matter, Tribunal examined Revenue’s substantive ground on merits as well. AO had made an addition of Rs. 20,25,63,469/- consisting of Rs. 19.75 crore being outstanding balance of unsecured loan from one Mukesh Khurana & Rs. 50 lakh cash deposit in Axis Bank. AO invoked sec 68 holding that lender’s returned income was low & capacity not established. However, CIT(A) deleted the addition after noting that identical amounts had already been brought to tax in the hands of lender in earlier proceedings, including funds received from AR Landcraft LLP & Evergreen Synfab Pvt. Ltd. CIT(A) held that taxing same sums again in hands of Assessee would result in double addition. Regarding Rs. 50 lakh cash deposit, CIT(A) accepted Assessee’s explanation supported by bank withdrawals & cash book showing sufficient cash in hand.
