Stance Consumer Electronics Pvt. Ltd. Vs DCIT (ITAT Delhi)
The assessee filed two appeals against separate orders of the Commissioner of Income Tax (Appeals), New Delhi, both dated 29.03.2025, concerning Assessment Years 2016-17 and 2017-18. The Tribunal decided both appeals through a common order as they involved the same assessee and common issues.
For A.Y. 2016-17, the assessee had originally declared a total loss of Rs.71,684/-. The assessment was reopened under section 147 on the basis of information from the Investigation Wing alleging rotation of substantial funds without economic rationale and transactions of Rs.39,27,750/- with M/s Concise Exim Pvt. Ltd. The reasons recorded for reopening treated those transactions as accommodation entries and recorded alleged escapement of income on that basis. However, the reassessment order made no addition concerning M/s Concise Exim Pvt. Ltd. Instead, an addition of Rs.1,99,12,000/- under section 68 was made concerning consideration received from three companies on sale of shares of M/s Prominent Agency Pvt. Ltd.
The Tribunal relied upon the Delhi High Court’s decision in Ranbaxy Laboratories Ltd. vs. CIT and the Bombay High Court’s decision in CIT vs. Jet Airways (I) Ltd.. It held that where no addition is made on the issue forming the basis of reopening, the Assessing Officer could not sustain additions on issues outside the recorded reasons. The reassessment order dated 28.03.2022 was therefore held without jurisdiction and quashed.
