2010 (5) TMI 828 - HC - Income Tax

Summary

Issues involved: Appeal u/s 260A of the Income Tax Act, 1961 challenging the order of the Income Tax Appellate Tribunal Delhi Bench for Assessment Year 2000-01.

Factual Matrix: The Assessing Officer reopened the assessment for the year 2001-02, questioning the creditworthiness and genuineness of certain transactions. The Assessee challenged the reopening initially but did not press the issue before the Tribunal.

Assessment and Appeals: The Assessing Officer assessed the Assessee, issued a notice of demand, and initiated penalty proceedings u/s 271(1)(c) of the Act. The Assessee appealed to the CIT(A) who affirmed the order. Subsequently, the Assessee appealed to the Tribunal.

Tribunal's Decision: The Tribunal considered the share application money received by the Assessee and held that, as confirmations were filed and money received through banking channels, there was no justification for the addition made by the Assessing Officer. The Tribunal relied on the decision in Commissioner of Income Tax v. Lovely Exports (P) Ltd. to support its conclusion.

Conclusion: The High Court found the Tribunal's reliance on the Lovely Exports (P) Ltd. decision justified, as the identity of the creditors was known. Therefore, the Assessing Officer could proceed against the creditors in accordance with the law. The appeal was dismissed as no substantial question of law was found.