Hemera India Pvt. Ltd. vs. ITO

Parties Involved

Facts Summary

The appeal in ITA No. 8256/Del/2019 for the Assessment Year 2010-11 arises from the order of the Commissioner of Income Tax (Appeals) in Appeal No. 119/18-19/CIT(A)-22, New Delhi dated 31.07.2019 against the order of assessment passed by the Assessing Officer, ITO, Ward-11(2), New Delhi dated 22.12.2017. The assessee, Hemera India Pvt. Ltd., challenged the validity of the reopening of assessment under section 147 of the Income-tax Act, 1961. The assessee argued that the information received from a third party, which triggered the reopening, was pursuant to a search action carried out in the hands of the third party, and thus, the right course of action would be to proceed under section 153C of the Act in the hands of the assessee and not under section 147 of the Act. The assessee had filed its return of income for the Assessment Year 2010-11 on 15.10.2010, declaring a total income of Rs 10,41,096/-. This was processed under section 143(1) of the Act on 17.03.2011. Later, the assessment was sought to be reopened based on information received from the Dy. Commissioner of Income Tax, Central Circle 7(4), Mumbai, that the assessee had obtained certain bogus accommodation entries in the form of purchase bills from Loha Ispat Ltd during the financial year 2012-13. The reasons for reopening the assessment were that the assessee had shown nil opening and closing stock, which is unusual for a genuine business of trade. The assessee had also shown huge creditors and debtors balances, w…

Legal Issues

• 1. Whether the assessment for the Assessment Year 2010-11 could be validly reopened under section 147 of the Act?
• 2. Whether the right course of action would be to invoke the provisions of section 153C of the Act in the case of the assessee?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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