AMBO VIHAR BUILDING NO-7 CO-OPERATIVE HOUSING SOCIETY LIMITED,VIRAR WEST vs. INCOME TAX OFFICER, WARD 4(1), THANE, THANE

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ITA 9176/MUM/2025Status: DisposedITAT Mumbai17 July 2026AY 2016-176 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided that the reopening of assessment was bad in law as the conditions of Section 147 were not fulfilled. It also held that the addition of Rs. 28,50,46,920/- as unexplained investment was not justified, and the addition of interest income was also incorrect.

What were the facts?

The assessee, a cooperative housing society, did not file its return of income. The assessment was reopened based on information that the society made an investment of Rs. 28,50,46,920/- in an immovable property. The society contended that this was a compliance for development obligation, not a purchase, and the stamp duty value was lower.

What were the issues?

Whether the reopening of assessment was valid and whether the addition of investment in immovable property and interest income was justified.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144B,Section 69,Section 80P(2)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI ANIKESH BANERJEE & SHRI BIJAYANANDA PRUSETH

PER SHRI ANIKESH BANERJEE, JUDICIAL MEMBER: The instant appeal of the assessee filed against the order of the NFAC Delhi [for brevity “Ld. CIT(A)], order passed under Section 250 of the Income Tax Act, 1961 (for brevity ‘the Act’), for Assessment Year 2016-17, date of order 30.10.2025. The impugned order emanated from the order of Assessment Unit Income Tax Department (for brevity ‘Ld. AO’), order passed under Section 147 r.w.s. 144 r.w.s. 144B of the Act, date of order 13.03.2024.

2.

The assessee has taken the following grounds:

“1. On the facts, circumstances of the case and in law, the Learned Commissioner of Income Tax Appeal (hereinafter referred as "Ld. CIT(A)") erred in confirming the order of Learned Assessing officer (hereinafter referred as "Ld. AO") in respect of reopening the assessment by issuing notice U/s 148A / 148 of the Income Tax Act, 1961 (herein after referred as "the Act") which is bad in law. The conditions of Section 147 for reopening the assessment was not fulfilled and therefore, the initiation and completion of re-assessment proceedings is incorrect, illegal and bad-in-law accordingly the proceedings should be quashed. Therefore, the said order passed should be quashed as the reopening of the assessment is not justified and necessary I direction should be given in this regard. 2. On the facts and circumstance of the case and in law, the CIT(A) erred in upholding the addition of unexplained investment in immovable property U/s 69 of the Act of Rs. 28,50,46,920/-being Registration of conveyance of Land in the name of appellant. It is submitted that there is no purchase of any immovable property during the year under consideration, however registering the conveyance of land was carried out as a part of compliance of development obligation. 2.1 The Ld. AO erred in making the addition of Rs. 28,50,46,920/- as unexplained investment in immovable property merely on the basis of information available with the Income tax department disregarding the fact that the actual stamp duty value of registration of conveyance of Land was only Rs. 9,50,15,150/-. 2.2 The CIT (A) erred in confirming the addition without considering the submission made during the course of appellate proceedings. It is therefore prayed to your honour to delete the addition made and necessary directions shall be issued in this regard. 3. On the facts and circumstance of the case and in law, the CIT(A) erred in confirming the order of Ld.AO thereby confirming the addition of interest income of Rs. 41,969/-The Ld. AO failed to understand that the appellant being a Registered Society is eligible to claim deductions U/s 80P(2)(c) of the Act uptoRs. 50,000/-. It is therefore prayed to your honour to delete the addition made and necessary directions shall be issued in this regard. 4. Your appellant craves leaves to add, amend, alter, modify or delete any of the above grounds of appeal on or before the date of hearing.”

3.

The assessee has taken the additional grounds: “Additional Ground No 1:- On the facts and in the circumstances of the case and in law, the notice issued u/s 148 of the Act dated 28/03/2023 by the Ld. AO is barred by limitation. Hence, the assessment order passed in pursuance of the same requires to be quashed. Additional Ground No 2:- On the facts and in the circumstances of the case and in law, the notice issued u/s 148 of the Act dated 28/03/2023 by the Ld. AO is bad-in-law as the approval granted by the Hon'ble Pr. CIT is mechanical and without application of mind. Hence, the assessment order passed in pursuance of the same requires to be quashed It may be mentioned that these are purely legal grounds of appeal. All the facts necessary to decide the additional grounds of appeal are already on record and no new evidence is required to be brought on record.” 4. Brief facts of the case are that the assessee had not filed its return of income under Section 139(1) of the Income-tax Act. The case was reopened by issuance of a notice under Section 148 of the Act. As per the information available with the revenue, the assessee had allegedly made an investment of Rs.28,50,46,920/- towards the purchase of an immovable property, which was registered on 30.09.2015 in the office of the Sub-Registrar, Class-II, Vasai No. 5, Mumbai, Maharashtra. Since the assessee had neither filed its return of income for the year under consideration nor explained the source of the alleged investment, reassessment proceedings were initiated under Section 147 of the Act. Thereafter, the assessment was completed ex parte, wherein the Ld. AO treated the alleged investment of Rs.28,50,46,920/- as unexplained investment under Section 69B read with Section 115BBE of the Act. The Ld. AO also brought to tax interest income of Rs.41,969/- under the head "Income from Other Sources", thereby determining the total income at Rs.28,50,88,889/-. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). During the appellate proceedings, the assessee was able to produce only the registered sale deed, whereas the remaining supporting documents could not be furnished either before the Ld. AO or the Ld. CIT(A).

Consequently, without duly considering the assessee's submissions, the Ld. CIT(A) upheld the impugned assessment order. Being aggrieved, the assessee has preferred the present appeal before us. 5. The Ld. AR filed a paper book comprising pages 1 to 212, which has been taken on record. The Ld. AR submitted that the assessee is a Co-operative Housing Society and that the subject immovable property was purchased on behalf of its members/co-owners for a total consideration of Rs.9,50,15,640/-. It was further submitted that the property was duly registered with the State Registration Authority on 30.09.2015, where the stamp duty valuation was determined at Rs.9,76,01,444/-. The Ld. AR emphatically contended that there was no transaction whatsoever involving an amount of Rs.28.50 crores, as alleged by the revenue. Inviting our attention to the Deed of Conveyance executed on 30.09.2015, placed in the APB at pages 18 to 212, the Ld. AR submitted that the market value of the property recorded therein was Rs.9,76,01,444/-. Our attention was also drawn to page 46 of the Paper Book, containing the list of members/shareholders who had contributed towards the purchase of the property, which clearly reflected that the aggregate consideration paid was Rs.9,50,15,640/-. The Ld. AR fairly admitted that, due to unavoidable circumstances, all the relevant documentary evidence could not be produced before either the Ld. AO or the Ld. CIT(A.). He, therefore, prayed that the matter be restored to the file of the Ld. AO for de novo verification after granting the assessee an adequate opportunity to produce the relevant evidence.

6.

The Ld. DR relied upon the orders of the revenue authorities and submitted that the additions had been rightly made by the Ld. AO. Accordingly, it was prayed that the impugned assessment order be upheld. 7. We have heard the rival submissions and carefully considered the material available on record. It is an admitted position that the assessee had not filed its return of income for the relevant assessment year and that the reassessment proceedings were initiated on the basis of information received by the Revenue alleging that the assessee had invested Rs.28,50,46,920/- in the purchase of an immovable property. It is also undisputed that the assessee disclosed the interest income of Rs.41,969/- in the return filed pursuant to the notice issued under Section 148 of the Act. On perusal of the documents placed before us, we find that the immovable property situated at Ambo Vihar Building No. 7, Virar (West), Maharashtra, was purchased for a stated consideration of Rs.9,50,15,640/-, whereas the value adopted by the registering authority for stamp duty purposes was Rs.9,76,01,444/-. Significantly, no material has been brought on record by the Ld. AO to demonstrate that the assessee had, in fact, purchased the property for Rs.28.50 crores. The impugned addition appears to have been made solely on the basis of information received from the office of the Sub-Registrar, without any independent verification or corroborative evidence. Considering the facts and circumstances of the case, and in the interest of justice, we deem it appropriate to restore the matter to the file of the Ld. AO for de novo verification of the actual value of the property and the basis of the information relied upon by the revenue. The Ld. AO shall examine all the documentary evidence that the assessee may furnish and thereafter pass a fresh order in accordance with law after providing the assessee with a reasonable and effective opportunity of being heard. 5

8.

Since we have restored the matter to the file of the Ld. AO for de novo adjudication on the merits after affording the assessee a reasonable opportunity of being heard, we do not consider it necessary to adjudicate the additional ground as well as the remaining grounds raised in the present appeal at this stage. Accordingly, all such grounds are kept open, with liberty to the assessee to raise the same in appropriate forum. The Ld. AO shall adjudicate the matter independently, in accordance with law, without being influenced by any observations of the Bench. 9. In the result, the appeal of the assessee bearing ITA No.9176/Mum/2025 is allowed for statistical purpose. Order pronounced in the open court on 17th day of July 2026 Sd/- Sd/- (BIJAYANANDA PRUSETH) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 17/07/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI

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