2013 (12) TMI 1690 - AT - Income Tax

Summary

Issues Involved:
1. Validity of reopening of assessment u/s 147 of the Income-tax Act, 1961.
2. Treatment of unaccounted receipt of the assessee while computing book profit u/s 115JB of the Income-tax Act, 1961.

Reopening of Assessment u/s 147:
The assessment was reopened based on the assessee's deposit from the buyer of office space, claimed as refundable after 270 years, not being shown as part of the sale consideration. The AO proceeded with reassessment, making additions on issues not mentioned in the recorded reasons. The CIT(A) held that for reassessment u/s 147, the AO can only assess income related to the issue that escaped assessment based on recorded reasons. If the AO cannot justify the reopening with the recorded reasons, expanding reassessment scope is not permissible. The AO's actions were deemed without jurisdiction and void ab initio, leading to the cancellation of the order.

Treatment of Unaccounted Receipt:
The AO, after agreeing with the assessee that certain deposits were not chargeable as income, made an addition on a different issue of unaccounted receipt. The Tribunal cited precedents emphasizing that reassessment must first address the income that led to the reopening, before considering other items. As the AO's actions lacked jurisdiction, the assessment was deemed void ab initio. Consequently, the appeal by the Revenue was dismissed.