Pentokey Organy (India) Ltd. Vs DCIT (ITAT Mumbai)
Reopening Held Invalid – No Addition on Recorded Reasons; MAT Computation U/s 115JB Quashed Following Jet Airways – ITAT Mumbai
Reassessment u/s 147 was initiated alleging excessive payments to related parties; however, during reassessment AO accepted returned income and made no addition on reasons recorded for reopening. Despite this, AO computed book profit u/s 115JB and raised MAT demand of ₹1.72 Cr without any discussion or adjustment in assessment order. Tribunal held that once AO accepts that income forming basis of reopening has not escaped assessment, he cannot assess any other income independently within same proceedings.
Relying on Bombay HC ruling in CIT vs Jet Airways (India) Ltd., ITAT observed that reassessment jurisdiction survives only if addition is made on original reasons; otherwise, subsequent additions like MAT computation fall outside scope of s.147. Since no addition was made on alleged related-party payments, computation of book profit u/s 115JB was held beyond jurisdiction and quashed. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The assessee has filed the present appeal against the impugned order dated 20.02.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2015-16.
