Smart Chip Private Limited Vs ACIT (Delhi High Court)
Delhi High Court held that extended period of ten years for reassessment cannot be sustained since revenue failed to establish that expenses had resulted in the acquisition of any asset and hence conditions stipulated in the fourth proviso to Section 153A(1) of the Income Tax Act would remain unsatisfied.
Facts- The petitioner has filed the present petition, inter alia, impugning a notice dated 21.03.2024 issued u/s. 148 of the Income Tax Act, 1961 and the reassessment proceedings conducted pursuant to the impugned notice. It is the petitioner’s case that the impugned notice is barred by limitation and therefore, the reassessment proceedings initiated are without jurisdiction. Thus, the principal question that falls for consideration of this court is whether the impugned notice has been issued beyond the period stipulated under Section 149(1) of the Act.
Conclusion- Held that the AO seeks to disallow expenses on account of doubting the genuineness for the reason that the same were not incurred wholly or exclusively for the purpose of the petitioner’s business. Absent any further material to establish that such expenses had resulted in the acquisition of any asset, the conditions stipulated in the fourth proviso to Section 153A(1) of the Act would remain unsatisfied.
