Reasons recorded for Reassessment cannot be Substituted, Added or Deleted: ITAT

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By Yogitha S. Yogesh – On December 12, 2022 5:40 pm

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the reasons recorded for reopening the assessment are to be read as they were recorded by the Assessing Officer and the same cannot be supplemented.

The Assessing Officer was of the view that income totalling Rs. 9,81,60,144 has escaped assessment, as the assessee, M/s. Arshiya Rail Infrastructure Ltd has failed to disclose truly and fully material facts. The assessee filed detailed objections against the reopening of the assessment, which were disposed of vide order dated 10/11/2019.

The Assessing Officer vide order dated 24/12/2019 passed under section 143 (3) r/w section 147 of the Act held that the assessee has failed to prove the creditworthiness and genuineness of the transaction with Silverson Logistics Private Ltd.

Further held that Kalyani Vincom Private Ltd, Assessing Officer held that the funds were transferred from the said entity to Highland Transport Private Ltd and Neelanchal Roadways Private Ltd, who had, in turn, transferred Rs. 1,49,62,890 and Rs. 2,77,75,322 to the assessee company. In appeal, CIT(A) vide impugned order upheld the assessment order both on jurisdiction as well as on merits.

It was evident from the record that it was only during the course of reassessment proceedings Assessing Officer alleged the transfer of funds from Kalyani Vincom Private Ltd to these 2 entities, which were subsequently transferred to the assessee.

A Coram of Shri S Rifaur Rahman, accountant member and Shri Sandeep Singh Karhail, judicial member set aside the reassessment proceedings under section 147 of the Act and the impugned order passed by the CIT(A), inter-alia, upholding the order passed under section 143(3) r.w.s. 147 of the Act. The appeal by the assessee got allowed.

The assessee was represented by  Shri Piyush Chhajeda/w Shri Sumit Mantri and the revenue was represented by Shri Mehul Jain.To Read the full text of the Order CLICK HERE

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