Reassessment without Tangible Material Invalid: ITAT deletes Rs.10 Lakh Cash Credit Addition [Read Order]
The Tribunal observed that there was no proper reason to believe that the income to the tune of Rs. 10 lakh had escaped the assessment and held that the reassessment was based on borrowed satisfaction
![Reassessment without Tangible Material Invalid: ITAT deletes Rs.10 Lakh Cash Credit Addition [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Reassessment-Tangible-Material-Invalid-ITAT-Cash-Credit-taxscan.jpg "Reassessment without Tangible Material Invalid: ITAT deletes Rs.10 Lakh Cash Credit Addition [Read Order]")
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of Rs. 10 lakh made under Section 68 of the Income Tax Act, 1961, holding that the reassessment was carried out without any tangible material. M/s. Shroff Properties Pvt. Ltd., (assessee) filed return of income for the Assessment Year 2010-11. The case was reopened under Section 147 based on information...
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of Rs. 10 lakh made under Section 68 of the Income Tax Act, 1961, holding that the reassessment was carried out without any tangible material.
M/s. Shroff Properties Pvt. Ltd., (assessee) filed return of income for the Assessment Year 2010-11. The case was reopened under Section 147 based on information received from the Investigation Wing alleging accommodation entries from M/s. Canary Tradecom Pvt. Ltd., which was stated to be a Jama Kharchi company.
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During the reassessment proceedings, the assessee submitted that the said amount was received through banking channels and was returned on the same day for purchasing equity shares. The AO was not satisfied and completed the reassessment by making the addition of Rs. 10 lakh.
Aggrieved by the order, the assessee filed an appeal before the CIT(A), which was dismissed. Therefore, the assessee filed an appeal before ITAT.
The counsel for the assessee contended that the reassessment was bad in law as the reasons recorded were vague and merely based on suspicion. The counsel for assessee argued that the reopening was initiated purely on the basis of information received from the Investigation Wing and lacked any tangible material.
On the other hand, the Departmental Representative supported the orders of the lower authorities and sought to dismiss the appeal of the assessee.
The Single Member bench comprising Dr. Manish Borad (Accountant Member) observed that the AO had not mentioned the name of the company through which the assessee allegedly received the sum.
The tribunal also observed that the reopening was merely based on information received from the Investigation wing which had no business rationale.
The Tribunal observed that there was no proper reason to believe that the income to the tune of Rs. 10 lakh had escaped the assessment. The Tribunal held that the reassessment was based on borrowed satisfaction.
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The tribunal also noted that the reassessment was carried out without any tangible material. The tribunal quashed the reassessment proceedings and the addition of Rs. 10 lakh was deleted. The appeal of the assessee was allowed.
To Read the full text of the Order CLICK HERE
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