R. A. Shah And Co. Vs DCIT (ITAT Mumbai)
Mumbai ITAT Quashes Reassessment for Pre-Return 143(2) Notice, Deletes ₹2 Crore Section 68 Addition
The Mumbai ITAT has held that a notice u/s 143(2) issued before the assessee files its return in response to notice u/s 148 is invalid. If no fresh notice u/s 143(2) is issued after filing that return, the reassessment is void ab initio. The Tribunal further held that unsecured loans could not be treated as unexplained cash credits merely on the basis of an Investigation Wing report when the assessee had proved the lenders’ identity, creditworthiness & genuineness of transactions through extensive documentary evidence.
Reopening based on Bhanwarlal Jain search
The assessee, R.A. Shah and Co., filed its return for AY 2010-11 on 08.09.2010 declaring income of ₹91,99,430.
A search & survey action was conducted on the Bhanwarlal Jain Group on 03.10.2013. Based upon evidence allegedly gathered during that action, the Investigation Wing concluded that various concerns controlled by the group were providing accommodation entries.
The information identified the assessee as a beneficiary of entries from Daksh Diamonds & Rahul Exports, amounting to ₹1 crore each.
The AO recorded reasons to believe that income of ₹2 crore had escaped assessment & issued notice u/s 148 on 13.02.2015.
