Addition on Sale of Partner's Property Sold before issuance of Notice u/s 148 of Income Tax Act: ITAT quashes Re-assessment Proceedings against Firm [Read Order]

The Delhi ITAT quashed reassessment proceedings against Chaudhary Stone Crusher, a firm using a partner’s property as its address, which was sold before the notice under Section 148 of the Income Tax Act was issued. The firm, formed in 2009, never commenced operations due to lack of permissions. \r

Partners sold their individual properties, and the AO incorrectly treated the sale as the firm's income, leading to a reassessment. The ITAT found the firm was non-existent at the address when the notice was issued, and sale proceeds were credited to individuals, not the firm. The reassessment was deemed factually incorrect and quashed.