2006 (11) TMI 184

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.... assailed the validity of the assumption of jurisdiction by the Assessing Officer under sections 147 and 148 of the Income-tax Act. 2. The case of the Revenue is that the Assessing Officer had received information from the Deputy Director of Income-tax (Investigation), Faridabad that while carrying out post-search enquiries relating to a third party, Shri Anand Prakash, the sole proprietor of M/s. Jai Trading Co. had deposed that he was providing bogus/false transactions purporting to relate to sale/ purchase of food grain items and that the cash deposits with him were from parties who had approached him for "accommodation entries" in the form of agricultural receipts. The enquiries with the banks on whom cheques were drawn and credited ....

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....nuine. 4. Having heard learned counsel for the parties at great length, we are of the view that the order of the Tribunal is unassailable. In this case, the assessment had not been completed under section 143(3) of the Income-tax Act. There are banking transactions between the assessees and Shri Anand Prakash and, therefore, initiation of reassessment proceedings under section 147/148 may be impregnable even to the charge of legitimacy of invocation of section 147/148. In other words, since there were banking transactions between these persons and Shri Anand Prakash had, in fact, deposed that he had provided bogus transactions to the assessees that would constitute reasons for the Assessing Officer to believe that income chargeable to ta....

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....ed on the banking transactions between themselves and Shri Anand Prakash ; secondly, on bills issued by them to Shri Anand Prakash, and on the unassailed payment of rent to Shri Mool Chand. It is true that the assessees' failure to produce Shri Kishan Chand had the consequence of not proving that the said person was tilling the land on their behalf. This failure cannot inexorably lead to the conclusion that no agricultural income had been generated by the assessees. Such an inference can only be drawn from the statement of Shri Anand Prakash to the effect that the transactions between him and the assessees were bogus. Therefore, it was mandatory for the Revenue to produce Shri Anand Prakash for cross-examination by the assessees on thei....