Vijaykumar Mangilalji Chordiya Vs NFAC (ITAT Pune)
Summary: The Pune Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal and quashed the reassessment completed under section 147 read with section 143(3) of the Income-tax Act, 1961, holding that where the information forming the basis of reopening emerged from a search conducted at the premises of a third party, the proper course was to proceed under section 153C rather than section 147.
The assessee, an individual, had filed his return of income on 19.07.2013 declaring total income of Rs.3,80,300/- after claiming deduction of Rs.51,831/- under Chapter VI-A of the Act. The Assessing Officer obtained information that the assessee had made cash deposits of Rs.6,09,74,438/- as a member of M/s. Shri Renuka Mata Multistate Credit Society Ltd. The Assessing Officer considered the source of the deposits to remain unverified and reopened the assessment. The recorded reasons, however, referred to information concerning cash deposits of Rs.3,16,38,294/- during F.Y. 2011-12 and referred to A.Y. 2012-13.
Notice under section 148 was issued. In response, the assessee filed a return on 14.03.2022 admitting income of Rs.10,00,300/-. Notices under sections 143(2) and 142(1) were thereafter issued. The Assessing Officer determined profit at 8% of the turnover of Rs.6,09,74,438/-, arriving at net profit of Rs.48,77,987/-. After giving credit for business income of Rs.8,19,119/- already offered by the assessee, an addition of Rs.40,58,868/- was made.
