2018 (9) TMI 143 - ITAT DELHI

Reopening of assessment - Sanction for issue of notice - Section 68 addition for alleged accommodation entries - share capital / subscription - Held that:- It is not the case of the assessee that the investigation wing report was available to the assessee at the point of time when the original assessment was framed. Learned counsel does not, therefore, get any support from this judicial precedent either.

Satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner”. Given the simplicity of the factual matrix of this case, and clearly correct inference drawn from the same, learned CIT clearly showed application of mind when he observed that “based on the reasons recorded above, I am satisfied that this is a fit case for issue of notice under section 148 of the Income Tax Act”. It has not been shown to us as to how this observation reflects non application of mind so far as concealment of income is concerned. We donot see as to how this decision supports the case of the assessee

In the light of these discussions, as also bearing in mind, learned CIT(A) was indeed justified in upholding the validity of reassessment. We uphold his action and decline to interfere in the matter.

For the merits of addition in the case of CIT v. Precision Finance (P.) Ltd [1993 (6) TMI 17 - CALCUTTA HIGH COURT] it was observed that “it is for the assessee to prove the identity of creditors, their creditworthiness and genuineness of transactions”. There is thus no escape from proving genuineness of a transaction. The assessee has failed to do so. We, therefore, confirm the addition in respect of alleged share subscriptions received from these two companies- namely Mahanivesh and Geefcee. As regards the addition in respect of commission, we have seen that there is a categorical finding that these entities were arranging the accommodation entries on the basis of 2.5% commission. We, therefore, confirm this addition as well.