Case Law Details
DCIT Vs Fornax Real Estate Ltd. (ITAT Mumbai)
ITAT Mumbai held that re-assessment under section 147 of the Income Tax Act not sustainable as assessee duly provided full and true material facts necessary for the assessment.
Facts- The AO vide order dated 30/12/2019, passed under section 143(3) r/w section 147 of the Act held that the assessee has failed to substantiate that the income shown by the assessee in its profit and loss account pertains to its business activity of development of real estate. The AO disallowed the business expenditure claimed by the assessee in the absence of any business income. The AO further held that the assessee has failed to substantiate with documentary evidence that the expenses were incurred wholly and exclusively for its stated business activity. Accordingly, the AO disallowed expenditure of Rs.17,94,87,604, under section 37(1) of the Act.
CIT(A) granted partial relief to the assessee. Accordingly, being aggrieved, revenue has preferred the present appeal.
Conclusion- It is evident that all the details sought by the AO were provided by the assessee during the course of scrutiny assessment proceedings, and the said details were accepted by the AO under section 143(3) of the Act. Further, from the perusal of reasons recorded for reopening the assessment, it is evident that the only basis available with the AO for initiating the impugned reassessment proceedings was the perusal of the profit and loss account and balance sheet i.e. the information which was already considered and examined during the course of original scrutiny assessment proceedings.
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