M/s R.N. Khemka Enterprises P. Ltd. vs Income Tax Officer, Ward-20(3), New Delhi

Parties Involved

Facts Summary

The assessee, M/s R.N. Khemka Enterprises P. Ltd., is engaged in the business of trading shares and financing related activities. The case was reopened under Section 147/148 of the Income Tax Act, 1961, for Assessment Year 2007-08. The Revenue alleged that the assessee had taken accommodation entries amounting to Rs. 3,34,31,000/- from certain parties, as per seized annexures from a search and seizure action conducted on 14.09.2010. The assessee claimed these transactions were genuine and provided various documents to support their case. However, the Assessing Officer found the documents to be mere paperwork and finalized the reassessment with an addition of Rs. 3,34,31,000/- as unexplained investment from undisclosed income.…

Legal Issues

• 1. Whether the satisfaction drawn under Section 151 of the Act by the Approving Authority was mechanical.
• 2. Whether the reasons recorded by the Assessing Officer were vague and lacked independent application of mind.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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