TaxTMI 
2026 (11) TMI 256
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....als were heard together, they are being taken up together for adjudication vide this composite order for the sake of brevity. We take up the appeal for AY 2019-20 in the case of Zee Akaash P. Ltd. as the 'Lead Case'. The decision rendered would apply mutatis mutandis to other appeals. 2. ITA No. 6869/ MUM/2025 (A. Y. 2019 -20) 1. Ground 1-Reassessment bad in law 1.1 On the facts and circumstances of the case the Learned Commissioner of Income-tax (Appeals) 48 (hereinafter referred to as the 'Ld. CIT(A)') erred in upholding the reassessment order passed by the Assistant/Deputy Commissioner of Income-tax Central Circle-2(4) (herein referred to as Assessing officer' or 'AO') under Section 147 read with Section 143(3) of the Income-tax Act, 1961 ('the Act') dated 22 March 2024 which is untenable and contrary to the facts of the case, and therefore, liable to be quashed. 1.2 On the facts of the case and in law, the Ld. CIT(A) failed to appreciate that the notice issued under Section 148 of the Act by the Assessing Officer was without jurisdiction, as it was solely based on information received from a third party ie., the Regional Economic Intelligence Counc....
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....l of the Department and identified as beneficiaries who made bogus purchases, and the name of the assessee appeared in that list for an aggregate transaction of Rs. 5.07 cr. during the relevant year. 4. Ground no. 1 relates to reopening and consequent reassessment done by the AO. Notice under Section 148A(b) of the Act was issued on 02.03.2023 inter alia, alleging that income chargeable to tax had escaped assessment on the basis of information enclosed with the notice wherein it was, inter alia, alleged that the reopening was based on the above information. The AO initiated reassessment proceedings and directed the assessee to show cause as to why a notice under Section 148 of the Act should not be issued. The assessee, in response filed a submission objecting to the reassessment proceedings, inter alia, pointing out that the assessee made payments in the nature of interior/civil work of office premises and purchase of office equipment and furniture from WIPL and added the same to the block of assets and claimed depreciation of Rs. 27,43,850/- under Section 32 of the Act. The AO, vide order under Section 148A(d) of the Act, rejected the contentions of the assessee by holding tha....
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....oving and fishing inquiry by reopening the assessment of the assessee. The failure on his part to conduct any inquiry whatsoever vitiates the entire reassessment proceeding. Reliance was placed on upon the decision of hon'ble Bombay High Court in the case of Hrishikesh vs. Pr. CIT (175 taxmann.com 1062) and Shodiman Investment P. Ltd. (422 ITR 337) in this regard. It is settled position of law that no reopening of the assessment could be permitted on the basis of incorrect understanding of facts. 6.2 It was further argued that the AO failed to establish assessee's involvement, any clear and direct nexus between the information and alleged escapement of income, or bring any independent corroborative evidence. The reassessment was, therefore based merely on suspicion that the assessee, having undertaken transactions with WIPL would be a beneficiary. It was also submitted that no reopening could be permitted without supplying the underlying material to the assessee as it was also not provided with the report, statement, findings or information relied upon by the AO having adverse comments against the assessee. In absence of information specifically suggesting escapement of income a....
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....e Supreme Court in the case of Raymond Woollen Mills Ltd. Vs Income-tax tax Officer [1999] 236 ITR 34 (SC) held that the Department can reopen a case on the basis of some prima facie material and sufficiency or considered at that stage. At the stage of issue of notice u/s. 148 only question is whether there was relevant material on which a person could have formed a requisite belief, material conclusively reasonable proving escapement is not concerned at the time of reopening of assessment. The citations relied upon by the assesse are factually distinguishable as in the instant case, the AO after analysing the reply of the assessee and the financials of the company filed in response to notice u/s. 148A(b) dated 02.03.2023 and 148(A(d) dated 28.03.2023, came to the conclusion that it was a fit case for reassessment as there was a prima facie case of reassessment based on tangible materials. In view of the legal position emerging from the cited decision above, and lack of any substance in the submissions of the assessee ground of appeal is dismissed. 9. Ground no.2 relates to the disallowance of depreciation of Rs. 27,43,850/- claimed u/s. 32 of the Act. As stated earlier, the reo....
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....d be made of depreciation claimed by the assessee. Further, the acquisition made by the assessee related to furniture and fixture as well as interior work conducted by it. The AO could have conducted physical verification of the assets acquired by the assessee. He simply relied upon the purported report of GST authorities, a copy of which was not provided to the assessee. The observation of the lower authorities that WIPL had low share capital and negligible profits as compared to its turnover did not, by itself, establish that it was a shell entity or that the transactions entered into by the assessee were non-genuine. 10.1 Before us, the ld.AR has stated that it had furnished certain documentary evidences in support of its claim of acquisition of capital asset and claim of depreciation thereon i.e. ledger account of WIPL in the books of the assessee, invoices along with e-way bills issued by it, relevant extract of the bank statement of the assessee making the payment to WIPL, audited financial statements to show additions made to the asset and the tax audit report. It is submitted that the assessee had discharged its primary onus by filing such relevant details. The assessee ....
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....e was also placed on Pr. CIT vs. Vaman International Pvt. Ltd. (ITA No. 1940 of 2017 dated January 29, 2020) (Bom), Ashok Rungta vs. ITO (474 ITR 160) (Bom) and CIT v. Orchid Industries (P.) Ltd. [2017] 397 ITR 136 (Bom). 10.3. It is pleaded that the assessee was also not provided the report, statement or findings relied upon by the AO, nor was an opportunity of cross-examination provided. Reliance is placed on M/s. Andaman Timber Industries v. CCE (Civil Appeal No. 4228 of 2006) (SC) and Tin Box Company v. CIT, 249 ITR 216 (SC). Addition without providing cross-examination is against the principles of natural justice. Accordingly, it was submitted that the transaction with WIPL was legitimate and bonafide, the required documentary evidence had been furnished, and depreciation being a mandatory allowance, the claim of Rs. 27,43,850/- on acquisition of fixed assets was allowable to the assessee. 11. The ld.DR relied on the orders of the authorities below. 12. We have carefully perused the materials on record, heard rival submissions. It is apparent that the only issue of depreciation is linked with certain Investigation report finding of GST department in respect of WIPL wh....
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....nsidering the entirety of the facts and the circumstances of the case, the matter in hand requires proper adjudication. Accordingly, we set aside the appellate order and remit the entire matter is to the file of the AO for de novo consideration of the issue as per law with a direction to provide the investigation report to the assessee for necessary rebuttal by it. Needless to state, the assessee would be allowed adequate opportunity of hearing. On the other hand, the assessee is also directed to produce the said party before the AO for necessary examination of the genuineness of the transaction qua the allegations levelled against. In the result, the ground is allowed for statistical purposes. 13. In ground no.3, the assessee has contested charging of interest u/s. 234B of the Act. However, as the main addition has been set aside and remitted to the AO for fresh adjudication, the ground being inconsequential, does not require any adjudication at this stage. 14. Consequently, the appeal is partly allowed. 15. ITA No. 6871/MUM/2025 (A.Y. 2019 -20) 1. Ground 1- Reassessment bad in law 1.1 On the facts and circumstances of the case, the Learned Commissioner ....
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....ted. 16. The assessee Zee Media Corporation Ltd., being part of the ZEE group, is engaged in the business of Broadcasting of Satellite Television Channels, i.e. news/ current affairs and regional language channels, and sale of television programs. It filed its return of income declaring the total income at Rs. 78,29,27,146/-. For the year under consideration, the assessee had appointed WIPL for undertaking interior/civil work towards office premises, and made payments aggregating to Rs. 3,54,46,814/-(including GST of Rs. 54,07,141/-). As the aforesaid expenditure was capital in nature, it was capitalised under 'Leasehold Improvements' in the books. Further, as per the provisions of the Act, the same was included in the block of assets on which depreciation of Rs. 17,72,341/ was claimed u/s. 32 of the Act. 17. Subsequently, a notice under Section 148A(b) was issued by the AO on the basis of information received from the 'GST authorities stating that WIPL was involved in the issuance of passing irregular input tax credit to other business entities and availing input tax credit based on fake invoices issued by others. It was further alleged that the transactions made by Watkins ....
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.....3 above applies mutatis mutandis to the instant ground as well which is therefore, also set aside and remanded to the AO for de novo consideration and action as per law. 23. In the result, the appeal is partly allowed. 24. ITA No. 6870/ MUM/2025 (A. Y. 2022 -23)(ZEE MEDIA) 1. Disallowance of the depreciation Rs. 27,27,632/- claimed u/s. 32 of the Act. 1.1 On the facts and circumstances of the case, the Learned Commissioner of Learned Commissioner of Income-tax (Appeals) 48 (hereinafter referred to as the 'Ld. CIT(A)') erred in upholding the action of the Assistant Commissioner of Income-tax Central Circle -2(4) (herein referred to as Assessing officer' or 'AO') in disallowing depreciation of Rs. 27,27,632/-claimed as per provisions of Section 32 of the Act in respect of civil and interior work carried out by Watkins Infrastructure Private Limited for the office premises of the appellant company. 1.2 On the facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating the fact that the assessee had duly discharged its onus to prove the genuineness of the transaction with Watkins Infrastructure Private Limited. 1.3 On the fac....