Passion Realtech Pvt. Ltd. Vs ACIT (ITAT Delhi)
Reason Recorded ≠ Addition Made: ‘Fundamental Jurisdictional Infirmity’ – Reopening on Wrong Reason is Void: ITAT Delhi Quashes 147 & Deletes Full 68 Additions for Both Years- Loan Repaid, Identity & Genuineness Proved—Section 68 Additions Deleted
Assessee, a real-estate company, was subjected to reassessment u/s 147 r.w.s 144 for both AYs. For AY 2011-12, AO recorded reasons alleging unexplained purchase of immovable property of Rs.2.98 crore, but completed reassessment by making addition of Rs.47 crore u/s 68, treating loans received from Sunrise Propbuild Pvt Ltd as unexplained cash credits. CIT(A) confirmed.
Tribunal examined the reasons recorded & the addition made & found them wholly unconnected. Reopening was based on property purchase, but addition was for alleged bogus loans—thus no tangible material or live nexus between the reasons & the addition. Reasons were based entirely on borrowed satisfaction from investigation in M3M Group without independent enquiry, verification, or supply of underlying material to Assessee.
ITAT relied on Delhi HC in Meenakshi Overseas (395 ITR 677), K.R. Pulp & Papers, G&G Pharma, & Sunlight Tours & Travels to hold that reasons must show independent application of mind & nexus to escapement. Since this was absent, the assumption of jurisdiction u/s 147 was invalid. Grounds 6.0 & 6.1 were allowed.
