Prem Properties Private Limited Vs ACIT (ITAT Delhi)
ITAT Delhi Quashes Reassessment – Borrowed Satisfaction from Investigation Wing Held Invalid
Delhi Tribunal quashed the reassessment order holding that reopening u/s 147 was based on borrowed satisfaction without any tangible material, & hence void ab initio.
Assessee, engaged in real estate business, had written off Rs.99 lakh as forfeiture of earnest money on two property deals with Kanwal Jeet Singh Kohli & Charan Jeet Singh Kohli. AO reopened the case on the basis of an Investigation Wing report following a search u/s 132 on another group entity, Brisk Infrastructure & Developers Pvt. Ltd., alleging a modus operandi of converting unaccounted money through bogus forfeiture entries. Since no details were initially filed, AO treated the forfeiture as bogus & also made an ad-hoc disallowance of ₹7.3 lakh (25%) of expenses.
On appeal, CIT(A) dismissed the jurisdictional objection, refused to admit additional evidence under Rule 46A, relied on a forensic examination to hold that the documents were fabricated, & sustained the additions.
Before Tribunal, Assessee argued that the reopening was invalid, as the information was only second-hand observations from a search in another case without any seized material or nexus to Assessee. It was also shown that confirmation letters & supporting papers were already submitted to AO, disproving CIT(A)’s findings.
