Reassessment quashed as no addition is made on the basis of the reason recorded for reopening
Tax Tribunal Quashes Reassessment Order Against Sky Scraper Properties Pvt. Ltd.
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai quashed the reassessment order issued under Section 147/148 of the Income Tax Act for A.Y. 2014–15 against Sky Scraper Properties Pvt. Ltd.
Key Case Highlights:
Case reopened under Section 147 alleging accommodation entries of ₹ 8.10 lakhs via a third party (Shri Hasmukhlal Mehta).
However, no addition was made based on this reason – instead, additions of ₹4.97 lakhs and ₹10.23 lakhs were made for unrelated interest income and expenses.
ITAT held that when no addition is made on the basis of the reason recorded for reopening, the reassessment order is not valid – as per the Bombay High Court ruling in Jetair Pvt. Ltd. v. DCIT (2023).
Result: Entire assessment order quashed; appeal allowed in favour of the assessee.
Takeaway for Tax Professionals:
Always verify if reassessment is grounded in the reason cited.
Citing one issue and assessing another without fresh notice is not permissible.
Judicial precedents like Jetair now strongly influence reopening cases.
The copy of the order is as under:
