Manoj Kumar Agarwal Vs ACIT (ITAT Agra)
Loans Triggered Reopening, TDS Ended It: ITAT Quashes Reassessment
Original Reopening Issue Yielded No Addition
The Agra Tribunal quashed a reassessment where the AO reopened the case to examine ₹1.55 crore of unsecured loans, but ultimately made no addition concerning those loans. Instead, the reassessment resulted only in disallowances for non-deduction of TDS on interest and showroom rent.
The Tribunal held that, once no addition was made on the issue forming the foundation of reopening, the unrelated disallowances could not sustain the reassessment. It allowed the appeal and quashed the consequential assessment order, leaving the remaining factual and legal grounds open.
Investigation of Election Affidavit Prompted Proceedings
The assessee, proprietor of Shakti Automobiles, filed his return on 31 October 2019, declaring income of ₹37,12,120.
Information originating from an investigation of his election affidavit indicated unsecured loans of ₹1,55,48,922 from various parties, family members and relatives. The investigation report stated that supporting bank statements, returns and confirmations had not been submitted to establish the lenders’ identity, creditworthiness and the genuineness of the transactions.
The annexure to the Section 148A(b) notice dated 6 March 2023 identified this loan amount as the income allegedly escaping assessment.
