Magestic Premises Private Limited Vs ACIT (Bombay High Court)
The Bombay High Court allowed the writ petition challenging the reopening of assessment under Section 148 for Assessment Year 2013–14. The petitioner had originally filed its return declaring income of ₹17,50,690, and the case was subjected to scrutiny under Section 143(3). During the original assessment, the Assessing Officer raised queries regarding cash deposits and transfer of Transferable Development Rights (TDR). The petitioner furnished detailed explanations along with supporting documents, including the cash book. While an addition was made in respect of TDR, no addition was made concerning the cash deposits, indicating that the explanation was accepted.
Subsequently, a notice under Section 148 was issued based on two reasons. The first reason related to a clerical error in inventory computation leading to alleged underassessment. However, this issue no longer survived since the entire addition was deleted by the ITAT. The second reason pertained to cash deposits of ₹5.11 crore, which the Assessing Officer considered unexplained under Section 68.
The Court examined whether there was any failure on the part of the petitioner to disclose material facts. It noted that during the original scrutiny proceedings, the Assessing Officer had specifically raised queries on cash deposits, and the petitioner had provided complete explanations supported by the cash book. After verification, the Assessing Officer had accepted the explanation and made no addition on this issue.
