M/s Morpheus Developers Pvt. Ltd. Vs Deputy Commissioner of Income Tax Circle- 17(2) Delhi

Parties Involved

Facts Summary

The assessee, M/s Morpheus Developers Pvt. Ltd., filed its return of income on 30-03-2018 under section 139(4) of the Income Tax Act, 1961, declaring a loss of Rs.33,56,318/-. The case was selected for scrutiny through CASS due to low income in comparison to high loans/advances/investment in shares appearing in the balance sheet, a large increase in unsecured loans during the year, and a real estate business with high closing stock. Notices were issued to the assessee, but no compliance was made. The Assessing Officer completed the assessment after making additions and assessed the total income at Rs.33,61,24,760/-. Aggrieved by the order of the AO, the assessee filed an appeal before the NFAC, who dismissed the appeal on 03-07-2025 without condoning the delay. The assessee then appealed to the Tribunal.…

Legal Issues

• 1. Denial of liability to be assessed at total income of Rs.33,61,24,760/- as against the returned loss of Rs.33,56,318/-.
• 2. Erroneous framing of the assessment order by the Assessing Officer.
• 3. Addition of Rs.8,63,10,315/- on account of increase of trade payables treated as unexplained credits u/s 68.
• 4. Addition of Rs.98,42,752/- on account of increase of other current liabilities treated as unexplained credits u/s 68.
• 5. Disallowances of expenses incurred into Work in Progress of Rs.24,33,28,011/- treated as taxable income.
• 6. Charging of interest u/s 234 B of the Income Tax Act, 1961.

Judgment Outcome

Decided in favour of Assessee.

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