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2016 (9) TMI 118 - HC - Income TaxReopening of assessment - Held that:- Reason to strike down the notice for reopening. As noted, the Assessing Officer has recorded specific reasons for forming a belief that income chargeable to tax has escaped assessment. There was material before him suggesting that M/s. Bhumidev Credit Corporation Ltd had given bogus accommodation entries worth ₹ 75 lacs to M/s. Kutch Ginning and Spinning Pvt. Ltd. in form of share application money. This was confirmed by the Director of M/s. Bhumidev Credit Corporation Ltd, who, in his statement, accepted that the company was indulging in issuance of cheques on receiving equivalent cash amounts. It was found that the petitioner had also received ₹ 10 lacs from M/s. Bhumidev Credit Corporation Ltd. in form of share application money. Particularly, looking to the fact that during the original assessment none of these aspects came up for consideration before the Assessing Officer, in our opinion, these were sufficient reasons to enable him to form a belief that income chargeable to tax has escaped assessment. Counsel for the petitioner, however, vehemently contended that the material before the Assessing Officer was insufficient. He submitted that unless and until there was a specific reference to the assesseecompany in the statement of the Director, an automatic presumption would not arise that the investment made by the M/s. Bhumidev Credit Corporation Ltd in the petitionercompany was also bogus. However, we must remind ourselves that, at this stage, what is required for the Assessing Officer is to form a reason to believe that income chargeable to tax has escaped assessment. Whether such additions would be sustained or not is not a relevant consideration. In exercise of writ jurisdiction, therefore, we would not hamper further progress in the assessment.
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