Pinnacle Contro And Ecohomes Pvt. Ltd. Vs DCIT (ITAT Pune)
ITAT Pune Quashes Reassessment Initiated Merely for Verification; Deletes Stamp Duty Addition
The Pune SMC Bench of the ITAT allowed the assessee’s appeal for AY 2017-18, holding that the reassessment under sections 147/148 was bad in law as it was initiated only to verify information and not on the basis of any tangible material indicating escapement of income. The reasons recorded merely stated that the information “needs to be investigated further,” which amounts to reasons to suspect, not reasons to believe—contrary to the mandate of Kelvinator (SC).
The Tribunal also noted that the original assessment was completed under section 143(3) after detailed scrutiny, and the AO failed to independently verify the alleged material before reopening. Further, the AO did not pass a speaking order disposing of the assessee’s objections, in violation of GKN Driveshafts (SC). Reliance was placed on Bombay HC in Chandni J. Ahuja (2024) to quash such verification-driven reopenings.
On merits, the ITAT deleted the addition of ₹2.74 lakh allegedly made towards unexplained stamp duty, holding that the assessee had not claimed such expenditure in its P&L and the AO failed to demonstrate otherwise. Accordingly, the reassessment and the consequential addition were set aside.
FULL TEXT OF THE ORDER OF ITAT PUNE
