Dinaben Navinchandra Patel Vs ITO (ITAT Ahmedabad)
Reopening on “Cash Loan”, Addition for “Bogus LTCG” — AO Cannot Change the Pitch After Starting the Match: Ahmedabad ITAT Quashes Reassessment u/s 147
Summary: The Ahmedabad ITAT dealt with an interesting reassessment where the reason recorded for reopening & the addition ultimately made travelled on entirely different tracks. The Tribunal held that where the AO reopened the assessment alleging an unaccounted cash loan, but ultimately made no addition whatsoever for such cash loan & instead taxed alleged bogus LTCG, the very foundation of reassessment disappeared. Consequently, the reassessment u/s 147 was held bad in law.
Facts — ₹4.27 Crore Appeared Twice, but in Two Different Avatars
The case was reopened on the basis of information available on the Insight Portal. The reasons recorded by the AO stated that the Assessee was one of the beneficiaries who had allegedly taken an unaccounted cash loan of ₹4,26,94,390. Accordingly, notice u/s 148 dated 30.03.2021 was issued.
Interestingly, during reassessment proceedings, the AO did not make any addition for the alleged cash loan. Instead, the very same amount of ₹4,26,94,390 was treated as bogus LTCG arising from transactions in shares of Kushal Ltd. & added u/s 68 r.w.s. 115BBE.
