Kapadia Money Changers Pvt. Ltd Vs ACIT (Gujarat High Court)
Gujarat High Court has quashed a notice issued by the Assistant Commissioner of Income Tax (ACIT) seeking to reopen the assessment of Kapadia Money Changers Pvt. Ltd. for the Assessment Year (AY) 2013-14. The court found that the Assessing Officer (AO) displayed a “total non-application of mind” while rejecting the assessee’s objections and that the reopening was based on a “mere change of opinion” and incorrect facts.
The petitioner, an authorized dealer of foreign exchange, challenged the Section 148 notice dated March 30, 2018, arguing that its original assessment under Section 143(3) had been duly completed and all relevant information regarding salary expenses had been furnished.
Background: Scrutiny Assessment and Subsequent Survey
For AY 2013-14, Kapadia Money Changers filed an e-return declaring a total income of ₹2,61,670. The case was selected for scrutiny, and the AO issued notices under Section 143(2) and Section 142(1), specifically requesting details of major expenses, including a comparative analysis and justification for any variances. The petitioner provided extensive details, including an audit report, financial statements, and a break-up of “Employee Benefit Expense” amounting to ₹9,17,675, categorized as salary and bonus. The AO also sought primary evidence for expenses above ₹1,00,000 and narrative ledgers, which the petitioner submitted. Following this detailed examination, an assessment order was passed under Section 143(3) on March 30, 2016.
