INCOME TAX OFFICER, SIRHIND vs. J M G GREENS PROMOTERS & DEVELOPERS, SIRHIND

The Revenue has taken two grounds of appeal wherein it has pleaded that ld. CIT (Appeals) has erred in deleting the addition of Rs.2,09,00,000/-.

The brief facts of the case are that assessment of the assessee was reopened by the AO by issuance of a notice u/s 148 on 31.03.2019. This re-opening was made on the ground that assessee has purchased immovable property for Rs.58,50,000/-. Ultimately, an assessment was framed on 19.12.2019 and income of the assessee was determined at Rs.2,44,020/- as against returned income of Rs.1,94,020/-. This assessment was set aside by the Commissioner of Income Tax while exercising the revisional power u/s 263 of the Income Tax Act vide his order dated 29.03.2022. Thereafter, AO has passed the fresh assessment order on 26.03.2023 u/s 144 read with Section 263 of the Act.

Dissatisfied with the assessment order, assessee carried the matter in appeal before the CIT (Appeals). Simultaneously, it has challenged the order of the ld. CIT passed u/s 263 of the Act.

The ITAT has allowed appeal of the assessee partly vide its order dated 03.05.2024 (ITA No. 410/CHD/2022). The Tribunal has vacated the directions of the ld. CIT except an amount of Rs.10 lacs which was alleged to be received by the A.Y.2012-13 3 assessee as unsecured loan from Smt. Harjinder Kaur. On the strength of this order, ld. counsel for the assessee submitted that CIT (Appeals) has confirmed this addition of Rs.10 lacs by way of the impugned order and rest of the additions could not be made in view of the subsequent Tribunal’s order.

The ld. DR is unable to controvert the submissions of the ld. counsel for the assessee.

We have considered the rival contentions. Since the very foundation of second assessment order dated 26.03.2023 passed u/s 144 read with Section 263 is the directions issued u/s 263 by the ld. CIT while exercising his revisional powers, these directions have been modified by the ITAT in its judgement dated 03.05.2024. Therefore, AO has been denuded from his powers to make any addition except the addition qua which order u/s 263 has been upheld. The ITAT has upheld the order of Section 263 only qua unsecured loan of Rs.10 lacs, therefore, apart from this addition, no other addition could survive in view of the subsequent development in the appeal of the assessee before ITAT challenging 263 order. The ld. counsel for the assessee pointed out that A.Y.2012-13 4 assessee has not been challenging this addition of Rs.10lacs confirmed by the ld. CIT (Appeals) in the impugned order. Therefore, the ld. CIT (Appeals) has rightly deleted the other additions because these are made by the AO without any jurisdiction to make such additions.

In view of the above discussion, we do not find any merit in this appeal of the Revenue. It is dismissed.

In the result, appeal of the Revenue is dismissed.