Sonal Jain Vs CIT (Appeals) (ITAT Delhi)
Reopening Fails When Original Issue Not Added — ITAT Delhi Deletes Section 68 Addition on Cash Deposits
The Delhi Bench of the ITAT allowed the appeal of Sonal Jain for AY 2016-17, holding that when no addition is made on the issue for which reassessment was initiated, the Assessing Officer cannot make additions on any other issue.
The reassessment was reopened under section 147 to examine investment in an immovable property. During assessment, the assessee satisfactorily explained the source of investment and no addition was made on that count. However, the AO proceeded to examine unrelated cash deposits of ₹1,97,800 and treated them as unexplained under section 68.
Relying on the Bombay High Court ruling in CIT v. Jet Airways (I) Ltd., the Tribunal held that once the primary reason for reopening fails, the AO lacks jurisdiction to assess any other income not forming part of the recorded reasons. Since no addition was made on the property investment—the very basis of reopening—the subsequent addition on cash deposits was without authority and unsustainable.
Accordingly, the reassessment order was set aside and the appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Delhi-43 [in short ‘the CIT(A)’] dated 09.09.2025, for Assessment Year 2016-17.
