Team Global Logistics Pvt. Ltd. Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that once the issue of reopening was examined in the scrutiny assessment proceedings, the reason framed under wrong facts are not valid reason, therefore such reasons to believe cannot be sustained. Thus, reopening of assessment quashed.
Facts- Subsequently information was received by AO that the assessee had received Rs. 35,00,000/- from one M/s. Tribhuvan Dealtrade Pvt. Ltd. and it was found that the transactions done had no economic rationale. M/s. TDPL was found to be a paper concern involved in providing accommodation entries and the assessee was identified as one of the beneficiaries of accommodation entries provided by M/s. TDPL.
Thus, the case was reopened u/s. 147 of the Act. AO disallowed assessee’s loan receipts of Rs. 35,00,000/- from M/s. TDPL and added as unexplained cash credit u/s. 68 of the Act and interest of Rs. 2,81,688/- paid on the aforesaid loan amount and added to the total income of the assessee.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that once the issue of reopening was examined in the scrutiny assessment proceedings, the reason framed under wrong facts are not valid reason, therefore such reasons to believe cannot be sustained. In view of this, assessee’s ground against reopening of assessment is allowed reassessment based on such invalid reason is quashed. In view of the fact that reopening of the assessment is quashed, we do not intend to adjudicate the remaining issues on merit.
