OJAS IMPEX PRIVATE LIMITED Vs. INCOME TAX OFFICER

Parties Involved

Facts Summary

The case involves an assessee engaged in the business of trading textiles. The assessee filed a return of income on 27.03.2013, which was processed under section 143(1) of the Income Tax Act, 1961. The case was reopened through issuance of notice under section 148 of the Act on account of certain information indicating that Rs.50,00,000/- was claimed as a bogus long term capital gain (LTCG). The assessee filed objections to the reopening, stating that there was no claim of LTCG and no transaction with M/s Divyadrishti Merchants Pvt. Ltd. The Assessing Officer (AO) disposed of the objections and completed the assessment by recording that the bogus LTCG was obtained from a shell company by way of an accommodation entry. The assessee appealed to the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Whether the reasons for reopening the assessment were sufficient and legally valid.
• 2. Whether the assessee was correctly held responsible for the transaction with M/s Divyadrishti Merchants Pvt. Ltd.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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