DIPTI MEHTA,KOLKATA vs. ITO, WARD - 43(2), KOLKATA

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ITA 2031/KOL/2018Status: DisposedITAT Kolkata30 January 2019AY 2009-102 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 held that re-assessments not making any addition on the specified reasons for re-opening, but on other issues, are not sustainable. Therefore, the impugned re-assessment was quashed.

What were the facts?

The assessee's case was re-opened under Section 147 based on a report suggesting an accommodation entry of loss. However, the Assessing Officer made an addition only of ₹28,891/- under Section 14A, not the full amount of the alleged loss.

What were the issues?

The primary issue was the validity of the re-opening of assessment when the additions made were not in line with the reasons recorded for re-opening.

Which sections of the Income-tax Act were involved?

Section 147,Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri S.S, Godara

This assessee’s appeal for assessment year 2009-10, arises against the Commissioner of Income-tax (Appeals)-13, Kolkata’s order dated 02.07.2018 passed in case No. 22/CIT(A)-13/W-45(2)/Kol/2015-16 involving proceedings u/s. 147 of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

I come to former issue of validity of re-opening in question. This assessee had filed her return for the impugned assessment year on 28.07.2009 declaring taxable income of ₹3,99,390/-. The same stood summarily processed. The Assessing Officer thereafter formed reasons to believe as per the investigation wing’s report that the assessee had taken a loss entry from M/s Mahasagar Group. This alleged loss entry involved an amount of ₹2,71,500/-. The Assessing Officer issued sec. 148 notice dated 03.02.2014. The assessee in turn requested to treat her original return as the one filed in furtherance to sec. 148 proceedings. The Assessing Officer thereafter completed re- assessment on 28.02.2015 disallowing the sum in question of ₹28,891/- u/s 14A r.w.s. Rule 8D(2) in the nature of direct and administrative expenditure to the tune of ITA No.2031/Kol/2018 A.Y. 2009-10 Dipti Mehta Vs. ITO Wd-45(2), Kol. Page 2 ₹2,048/- and ₹26,843/-; respectively in relation to exempt income of ₹29,911/-. The CIT(A) has declined assessee’s both grounds challenging validity of re-opening as well as correctness of above stated disallowance(s) on merits.

3.

I have given my thoughtful consideration to rival submissions. The assessee’s former substantive ground challenges validity of re-opening. It transpires during the course of hearing that the Assessing Officer had re-opened the assessee’s case recording that she had availed an accommodation entry of loss amounting to ₹2,71,500- whereas he disallowed the amount in question of ₹28,891/- only during the course of re-assessment (supra). Hon'ble Mumbai high court’s decision in CIT vs. Jet (Chhattisgarh) hold that such a re-assessments not making any addition qua the specified reasons of re-opening but on other issues are not sustainable. I therefore quash the impugned re-assessment for this sole reason.

3.

This assessee’s appeal is allowed. Order pronounced in open court on 30/01/2019 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 30/01/2019 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Dipti Mehta, 161/1 M.G. Road, Ground Fl, Kolkaata-007

2.

""यथ"/Respondent-ITO Wrd-45(2), 3, Govt. Place, Kolkata-101 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, // उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, कोलकाता ।

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