TaxTMI 
TaxTMI 
2012 (11) TMI 595
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....vious year that ended on 31st March, 2000, it filed a return of income on 23rd November, 2000 declaring an income of Rs.41,180/-, which was processed under Section 143(1) on 30th March, 2001. Subsequently, the Assessing Officer took proceedings under Section 147 of the Act on the ground of escapement of income on the basis of information received from the investigation wing of the Income Tax Department that the assessee took accommodation entries from three companies to the tune of Rs.3,30,000/- in the relevant accounting year. The names of the companies and the amounts taken from them as share capital are as follows:- S. No. Name of the person from whom accommodation entry received on various dates. Amount 1. M. Suma Finance & Investment Limited 2,40,00,000/- 2. M/s Precision Agencies Pvt. Ltd. 60,00,000/- 3. M/s. S. N. Electricals Pvt. Ltd. 30,30,00,000/- Total 3,30,00,000/- Notice under Section 148 to reopen the assessment was, therefore, issued on 19th March, 2007. In response to the notice the assessee stated that the original return may be taken as the return filed in response to the notice. A copy of the reasons recorded for reopening the assessment....
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.... He was also informed by the Assessing Officer having jurisdiction over M/s Precision Agencies Pvt. Ltd., one of the three companies that reassessment proceedings were taken against that company in the course of which one Pradeep Kumar Jindal, who was one of the directors of that company, had admitted to providing accommodation entry to the assessee. 5. Having regard to the aforesaid facts the Assessing Officer came to the conclusion that the provisions of Section 68 were attracted to the share application monies amounting to Rs.1,65,000/-, the assessee having failed to establish the identity and creditworthiness of the share applicants and the genuineness of the transaction. He accordingly added the amount as the assessee's income under Section 68. 6. The assessee filed an appeal to the CIT(Appeals) against the reassessment order and challenged the jurisdiction of the Assessing Officer to reopen the assessment as also the addition on merits. The CIT(Appeals) rejected the objections to the jurisdiction to reopen the assessment. In the course of the appellate proceedings, the assessee would appear to have submitted additional evidence in the form of affidavits dated 28th December....
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....assessee, an assessment was made in its case for the assessment year 2000-01 by the Assessing Officer in Kolkata and in the said assessment order no addition had been made on the ground that the share capital investment in the assessee's company is not genuine. A copy of the assessment order had been sent to the Assessing Officer by the CIT(appeals) along with the direction to file the remand report. In any case, Pradeep Kumar Jindal had no connection with Suma Finance and Investment Ltd. 6) All the necessary evidence such as the confirmation letters from the three companies, copies of audited balance sheet etc., copies of the cheques issued towards share capital were filed before the Assessing Officer. 7) The Assessing Officer has not confronted the assessee with the information received from the investigation wing. He has not examined the material and quantified the escaped income. He has not examined the submissions of the assessee explaining the nature of the entries. No evidence was brought on record to show that it was a case of false entries. On the basis of the aforesaid findings and having regard to the judgment of the Supreme Court in the case of CIT vs. Lovely Exports....
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....admitted to providing accommodation entries to the assessee. In an attempt to verify the identity and creditworthiness of the three share applicants, as also the genuineness of the transactions, the Assessing Officer called upon the assessee to produce the directors of the three companies. This was done on 24th December, 2007. The Directors were required to produce on 26th December, 2007. On 27th December, 2007, the authorized representative of the assessee attended the proceedings but did not produce the directors or any other responsible person of those companies, but took the stand that the Assessing Officer may issue summons to enforce the personal attendance of the directors. However, before the CIT(Appeals) affidavits were sought to be introduced as additional evidence under Rule 46A. These affidavits are from the directors of the three companies. It was claimed before the CIT(Appeals) that by the time the affidavits were taken to the Assessing Officer (on 28th December, 2007), the assessment proceedings had been closed. If affidavits from the companies could be obtained, it is not known why the directors could not be produced before the AO as directed by him. These facts do....