Amit Polyprints Pvt. Ltd. Vs DCIT (Gujarat High Court)
The Gujarat High Court considered two petitions challenging notices issued under Section 148 of the Income Tax Act, 1961 for reopening assessments for Assessment Year (AY) 2010-11. The cases involved different assessees, but the facts and legal issues were substantially similar. In one case, the return had been accepted under Section 143(1) without scrutiny, while in the other it had been accepted after scrutiny assessment.
The petitioner company had filed its return declaring nil income. The Assessing Officer (AO) later sought to reopen the assessment based on information received from the Deputy Director of Income Tax (Investigation), Kolkata. According to the information, 114 Kolkata-based shell companies had allegedly provided accommodation entries in the form of share capital and share premium to Surat-based companies. The AO found that the petitioner had received share capital and share premium amounting to Rs. 37 lakh from Galore Supplier Pvt. Ltd., which was stated to be one of the shell companies identified during the investigation.
Based on this information, the AO recorded reasons that the share capital and share premium received by the petitioner were not genuine and represented the assessee’s own money introduced in the guise of share capital and share premium, liable to be taxed under Section 68 of the Act. The AO therefore formed a belief that income chargeable to tax had escaped assessment and issued notice for reassessment.
