Musaddilal Mansaram Infrastructure Pvt. Ltd. Vs ITO (ITAT Raipur)
ITAT Raipur Quashes 147 Reopening – Search-Based Cases Must Proceed u/s 153C- No Independent Material Beyond Search Records – ITAT Quashes 147 Notice
Assessee, engaged in real estate, filed return declaring a loss of Rs. 4.30 lakh. The return was processed u/s 143(1). Subsequently, a search u/s 132 was conducted in the case of Rashi Steel & Power Ltd. group, during which one of its Directors, Suresh Kumar Agrawal, admitted that he arranged accommodation entries through 31 shell companies. Assessee was found to have received unsecured loans of Rs. 2.06 crore from three such companies. Based on this, AO reopened assessment u/s 147 & made additions u/s 68, 69 & 69C aggregating to over Rs. 3 crore.
CIT(A) deleted substantial additions but sustained Rs. 65.08 lakh by invoking s.56(2)(vii)(b) instead of s.69. Both Assessee & Revenue filed cross appeals.
Before Tribunal, e Assessee challenged the very jurisdiction, arguing that since material originated from a search on a third party, only s.153C could be invoked & not s.147. Reliance was placed on Rajasthan HC in Shyam Sunder Khandelwal (471 ITR 45), Bombay HC in Sejal Jewellery (2025 2 TMI 870) & SC in Abhisar Buildwell Pvt. Ltd. (149 taxmann.com 399).
