ITA No.342-2011

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

+

ITA No.342 of 2011

COMMISSIONER OF INCOME TAX

.... Appellant

Through: Mr.Deepak Chopra, Advocate

VERSUS

NOVA PROMOTERS & FINLEASE (P) LTD.

…..Respondent

Through Mr. C.S.Aggarwal, Sr.Advocate with

Mr.Prakash Kumar and Mr.Arta Trana

Panda, Advocates.

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA

HON'BLE MR. JUSTICE R.V. EASWAR

1.Whether Reporters of local papers may be allowed to see

the judgment?

2. To be referred to the Reporters or not ?

Yes.

3. Whether the judgment should be reported in the Digest? Yes.

R.V. EASWAR, J.:

This is an appeal filed by the Commissioner of Income Tax under

Section 260A of the Income Tax Act,1961 (“the Act” for short) against

the order passed by the Income Tax Appellate Tribunal (“Tribunal”, for

short) on 14^th May, 2010 in ITA No.3368/Delhi/2009, relating to the

assessment year 2000-2001.

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ITA No.342-2011

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2. The assessee is a private limited company. In respect of the

assessment year 2000-2001, for the previous year ended on 31^st March,

2000, it filed a return of income declaring loss of Rs.2,800/-. The return

was processed under Section 143(1) and the loss was accepted.

Subsequently, the Assessing Officer received a letter dated 3^rd March,

2006 from the Director of Income Tax (Investigation), New Delhi which

furnished detailed information regarding entry operators/accommodation

providers. The letter informed the Assessing Officer that there were 16

entry operators who had given accommodation entries to several persons

of which the assessee was also one. There were also statements recorded

from persons confirming the facts. According to the information

contained in the letter, the assessee had obtained accommodation entries

from these proceedings in the garb of share application monies. The total

amount received from such persons as share application monies was

Rs.1,18,50,000/- during the relevant year.

3. Based on the aforesaid letter, the Assessing Officer issued notice

under Section 148 of the Act on 22^nd September, 2006 reopening the

assessment of the assessee and called upon it to file return of income in

response to the notice. The assessee stated that the return filed by it

earlier may be treated as compliance with the notice. It also requested the

Assessing Officer to furnish the reasons for reopening the assessment,

which were provided under cover of letters dated 1^st June, 2007 and 14^th

June, 2007.

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4. In the course of the reassessment proceedings pursuant to the

notice issued under Section 148, the Assessing Officer issued a

questionnaire to the assessee. In order to comply with the same the

assessee sought for the documents/material in the possession of the

Assessing Officer and also requested him to produce the person

incharge of the 16 companies for cross examination with regard to the

contents of the statements recorded from them. In response to the

assessee’s request, the Assessing Officer provided the assessee with

the following:-

“1. Copy of statement of Sh. Rajan Jassal S/o Sh. Surinder Kr.

2. Copy of statement of Sh. Mukesh Gupta S/o Sh. R.D.Gupta –

claiming various Benami accounts maintained by them.”

5. In order to examine the genuineness and the creditworthiness of the

companies which gave the entries to the assessee, the Assessing Officer

issued summons to Mukesh Gupta and Rajan Jassal on 23^rd October, 2007

and 26^th November, 2007 respectively. It appears that the Assessing

Off