COMMISSIONER OF INCOME TAX Vs. FAIR FINVEST LTD

JUDGEMENT

(1.) The revenue claims to be aggrieved by order dated 28.10.2011 of the ITAT in ITA No.1795/Del/2011. The question of law sought to be urged by it is whether the Tribunal fell into error in confirming the order of the Commissioner (Appeals) whereby the addition made under Section 68 of the Income Tax Act, 1961 on assessee's return in re-assessment proceedings, were deleted.

(2.) The facts of the case are that in the reassessment proceedings for assessment year 2002-03, the revenue sought to tax the income which had escaped assessment. This resulted in addition to the tune of Rs. 55,01,125/-. This was on account of share application money which was received during the previous year in question. The proceedings under Section 148 have been initiated on 26 th March, 2009. An investigation report received by the assessing officer which implicated on the basis of, inter alia, statement by one Mr. Mahesh Garg and other materials revealed that the assessee was involved in accommodation entry transactions. The assessing officer's order was carried in appeal to the CIT(A). The CIT(Appeals) allowed the same. The revenue unsuccessfully appealed against the decision before the ITAT.

(3.) It is argued on behalf of the revenue that the Tribunal and the CIT(Appeals) fell into error in citing a mere technicality i.e. the failure to crossexamine Mr. Mahesh Garg and a suitable opportunity to assessee as a ground for setting aside the addition. Ld. counsel laid great stress on the investigation report as well as the statement dated 22.9.2003 of Mr. Mahesh Garg. Both, especially the latter, had pointed to the respondent's role as recipient or as beneficiary of the income generated through various accommodation transactions. Ld. Counsel relied upon CIT vs. Nova Promoters & Finlease (P) Ltd decided on 15.2.2012 (ITA No.342/2011). It was highlighted that in that case too similar and identical investigation report had been relied upon which interalia had many common names including that of Mr. Mahesh Garg and one entry provider i.e. Tashi Contractors (P) Ltd. which is also involved in the present case. Counsel for the assessee contended that no question of law arises in this case and that the initial burden cast upon it by virtue of the judgment of the Supreme Court in CIT vs Lovely Exports ltd, 2009 216 CTR 195 had been discharged and that the assessing officer was free to satisfy himself as to the veracity and genuineness of the transactions by examining the bank accounts or the accounts of the companies who had applied for shares in the present case.