CIT Vs. INDIA TERMINAL CONNECTOR SYSTEM LTD

JUDGEMENT

(1.) This appeal by the Revenue under Section 260A of the Income Tax Act, 1961(Act, for short) in the case of India Terminal Connector System Limited pertains to assessment year 2001-02. Having heard learned counsel for the parties and having perused the impugned order dated 28th September, 2010 passed by the Income Tax Appellate Tribunal (tribunal, for short), we formulate the following substantial question of law:

(2.) Subsequently, a notice under Section 148 of the Act dated 28th March, 2008 was issued and the assessee filed a letter dated 10th June, 2008 stating that the original returned filed may be treated as the return filed in response to the said notice. The allegation against the assessee was that they had received accommodation entries of Rs. 42,03,250/- as per information received from the Investigation Wing. The reasons recorded by the Assessing Officer have been mentioned in the order passed by the tribunal and read as under:-

(3.) By order dated 18th December, 2008, the Assessing Officer computed the income of the assessee at Rs. 81,50,800/- . He made an addition of Rs. 42,03,250/- on account of the said accommodation entries. In the first appeal, the assessee challenged the reopening on the ground that jurisdictional pre-conditions were not satisfied. The CIT(Appeals) did not agree with the said contention and upheld the reopening. However, he deleted the addition on merits and held that the Assessing Officer was free to take action against the share holders.