Sahana Dwellers Private Limited vs. DCIT-3(1)(1), Mumbai

Parties Involved

Facts Summary

Sahana Dwellers Private Limited, a private limited company engaged in the construction of buildings, filed its return of income for the assessment year 2015-16 on 30.09.2015 declaring a loss of Rs.2,93,77,746/-. The return was selected for scrutiny and assessment under section 143(3) and completed on 28.12.2017. The assessment order was subjected to proceedings under section 263 of the Act on the ground that two issues had not been properly examined. The Principal Commissioner of Income-tax, by order dated 10.03.2021, set aside the assessment with a direction to the Assessing Officer to make detailed verification of the issues and decide the same in accordance with law. The Assessing Officer initiated proceedings and, after examining the submissions of the assessee, passed an assessment order under section 144 r.w.s. 263 r.w.s. 144B dated 28.03.2022 without making any addition. However, simultaneously, proceedings under section 147 of the Act had been initiated on the same two issues and notice under section 148 was issued on 26.03.2021. By order dated 29.03.2022 passed under section 147 r.w.s. 144 r.w.s. 144B, the Assessing Officer made an addition of Rs.1.77 crores on account of the alleged differential value of sale of flats and a further addition of Rs.7.91 crores on account of proportionate interest expenditure allegedly required to be capitalized to capital work-in-progress. The total income was consequently determined at Rs.6,74,22,254/- as against the returned loss of…

Legal Issues

• 1. Whether the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961 were valid in law?

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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