The Delhi Bench of Income Tax Appellate Tribunal has held that addition on additional grounds are not permissible if Assessing Officer does not make an addition on the primary ground for reopening the assessment.
The appellant, Shri Satyawan approached the appellate authority challenging the validity of the assessment made by the Assessing Officer as the assessment was reopened for escapement of income on account of cash deposits made into the bank account of State Bank of India by the assessee and whereas while completing the assessment the Assessing Officer made various disallowances of expenses other than the reason for which the assessment was reopened.
The counsel for the appellant by placing reliance on the decision of the Delhi High Court in the case of Ranbaxy Laboratories Limited Vs. CIT submitted that if no addition is made for which the assessment was reopened other additions made other than the addition for which the reopening was made will not survive.
The Delhi High Court considers the decision of the Bombay High Court in the case of CIT Vs. M/s. Jet Airways (I) Limited held that if the Assessing Officer does not make any addition on the primary ground on the basis of which proceedings under Section 147 were initiated, he cannot make other additions.
The Coram of Mr. Challa Nagendra Prasad, Judicial Member by relying on the decision of Delhi High Court in Ranbaxy Laboratories Limited Vs. CIT has held that “I hold that the reassessment order passed by the Assessing Officer under Section 143(3) read with Section 147 of the Act is bad in law and the same is quashed on this ground”.
Adv. Subhash Chander Jindal appeared on behalf of the appellant and Mr. Om Parkash appeared on behalf of the revenue.
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