TaxTMI 
TaxTMI 
2014 (2) TMI 1125
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....urn of income for the Assessment Year 2006-07. The case was selected for scrutiny. An order of assessment was passed under Section 143(3) on 2 December 2008 accepting a NIL return. A notice was issued to the assessee on 11 March 2013 under Section 148 and in response to the request made by the assessee for disclosure of reasons recorded under Section 148, the Assessing Officer issued the reasons on the basis of which the assessment was sought to be reopened. The reasons postulate that information was received from the Additional Director of Income Tax (Investigation) by the letter dated 6/8 April 2009 through the communication dated 27 January 2010 of the Additional CIT, Range 4, Agra that a search was conducted on the office premises of th....
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....epartment. On this basis, the assessment was sought to be reopened as there was reason to believe that the income had escaped assessment in the Assessment Year 2006-07. In pursuance of the judgment of the Supreme Court in G.K.N. Driveshafts (India) Ltd. Vs. Income Tax Officer1, the objection which was raised by the assessee has been disposed of by the order dated 24 September 2013. The assessee has challenged the reopening of the assessment. Learned counsel appearing on behalf of the petitioner submits that during the course of the assessment under Section 143(3), the Assessing Officer had issued a notice under Section 142 on 5 June 2008 requiring the assessee inter alia to furnish a disclosure in respect of the share applicants, the amo....
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....clude the petitioner to whom accommodation entries in the amount of Rs.2.21 crores were provided by four such companies. In the present case, it has been submitted that the mere disclosure by the assessee during the course of the assessment of the date of the payment, the amount of the payment, the mode of payment and the PAN details of the companies would not establish that the transaction was genuine and as a matter of fact there was virtually no application of mind by the Assessing Officer to the genuineness of the transaction or the credit worthiness of the companies as a bare reading of the order would indicate. The reopening of the assessment in the present case is under the provisions of Section 147(1). The Assessing Officer must ....
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.... aspects have to be considered by the Assessing Officer, namely (i) the identity of the investors; (ii) the credit worthiness of the applicants; and (iii) the genuineness of the transaction. Ex-facie, the order of assessment which was passed by the Assessing Officer under Section 143(3) on 2 December 2008 (Annexure 5) does not indicate that the Assessing Officer had brought his mind to bear on either of these aspects. In fact there is nothing in the reply filed by the assessee to the notice under Section 142(1) that would indicate a full disclosure of facts in regard to either the credit worthiness of the companies which made the investments or the genuineness of the transaction. A cloud was cast on the genuineness of the transaction onc....