O3 Developers Pvt. Ltd. Vs ITO (Gujarat High Court)
The Gujarat High Court heard writ petitions challenging the reopening of assessment proceedings for Assessment Years (AYs) 2019-20 and 2021-22. The petitioner challenged the notices issued under Section 148 and the orders passed under Section 148A(3) of the Income Tax Act, 1961, contending that the reassessment proceedings were initiated despite detailed explanations already having been furnished in response to the show cause notices.
The petitioner submitted that all bank transactions, including credit entries, were duly recorded in its books of account, reflected in audited financial statements, and considered while filing the original returns of income. According to the petitioner, the reassessment was based solely on the allegation that the transactions were not in coherence with its business activities. It argued that detailed bifurcation of bank credits, loan transactions, and supporting bank statements had already been provided. The petitioner further contended that borrowing from group concerns did not require an NBFC licence and that the absence of interest on certain loans could not, by itself, establish escapement of income. It also argued that findings relating to mark-to-market (M2M) loss and alleged bullion purchases were introduced in the final order without prior opportunity or supporting material.
