M/S. BIOBUILD DEVELOPERS ,MUMBAI vs. INCOME TAX OFFICER WARD 24(1)(3), MUMBAI

ITA 4011/MUM/2025Status: DisposedITAT Mumbai25 August 2025AY 2013-14Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the AO could not make an addition on an issue (notional interest income) that was not the basis for initiating reassessment proceedings (sale of immovable properties). The addition was deleted as it was beyond the scope of the original reasons for reopening.

What were the facts?

The assessee, a developer, did not file an income tax return for AY 2013-14 despite selling three properties. The Assessing Officer (AO) initiated reassessment proceedings based on information about these property sales. During reassessment, the AO made an addition of notional interest income.

What were the issues?

Whether an addition can be made on grounds other than those forming the basis for reopening the assessment. Whether the scope of reassessment can be expanded beyond the original reasons recorded.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 250

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Income Tax Appellate Tribunal, “H (SMC

[ Per Rahul Chaudhary, Judicial Member:

1.

The present appeal preferred by the Assessee is directed against the order, dated 20/05/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 26/12/2019, passed under Section 143(3) read with Section 147 of the Act for the Assessment Year 2013-2014. 2. The Assessee has raised following grounds of appeal : “

The order continues below.

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