ACIT Vs Vishal Gold & Precious Stones Pvt Ltd (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT), Delhi Bench, has dismissed an appeal filed by the Assistant Commissioner of Income Tax (ACIT), upholding the decision of the Commissioner of Income Tax (Appeals) to quash reassessment proceedings initiated against M/s. Vishal Gold & Precious Stones Pvt Ltd for the Assessment Year 2007-08. The Tribunal’s order, pronounced on May 15, 2025, affirmed that the reassessment was invalid due to a lack of independent application of mind by the Assessing Officer (AO) and the absence of fresh, incriminating material directly relatable to the year under consideration.
The dispute stemmed from an assessment order passed by the DCIT, Circle-17(1), New Delhi, on March 26, 2013, under Section 143(3) read with Section 147 of the Income-tax Act, 1961. This reassessment significantly enhanced the assessee’s total income to Rs. 6,65,95,770/-, a substantial increase from the returned income of Rs. 16,03,890/-. The additions made by the AO primarily included:
- 3,82,49,000/- on account of share application/share premium.
- 13,14,250/- on account of a claim (details not specified).
- 4,28,628/- related to sundry creditors.
- An ad-hoc addition of Rs. 50,00,000/- on account of estimated net profit.
Vishal Gold & Precious Stones subsequently appealed to the CIT(A)-3, New Delhi. The CIT(A) not only deleted all the additions on merits but also quashed the very foundation of the reassessment proceedings, deeming them invalid. This decision by the CIT(A) prompted the revenue to file the present appeal before the ITAT, challenging specifically the quashing of the reassessment.
