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TMI Blog2016 (6) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... the part, as the case may be, would be deemed to be the income of the assessee for such financial year. The present is not a case where the assessee has incurred expenditure, but failed to offer explanation about the source of such expenditure. The source of expenditure in question was very much available since in the reasons recorded itself, the Assessing Officer points out that the purchases were made by making cheque payments. Section 69C of the Act therefore has no applicability. Respective impugned notices for reopening of assessment are quashed. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 17935 of 2015 With SPECIAL CIVIL APPLICATION NO. 17936 of 2015 TO SPECIAL CIVIL APPLICATION NO. 17937 of 2015 - - - Dated:- 9-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR TUSHAR P HEMANI, ADVOCATE, MS VAIBHAVI K PARIKH, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These petitions arose in similar background. They have been heard together and would be disposed of by this common judgment. For convenience, facts may be noted from Special Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbai vide letter No.DIT (Inv)II/Information/BLJ/SAL/201415/ 305 dated 16.7.2014. It has come to notice that the assessee has accepted bogus accommodation entries for purchase of ₹ 90.17 Lacs from Maridian Gems in A.Y. 2008-2009 to inflate purchases. This information was not available at the time of passing the original assessment order. Further the statements of Bhanwarlal Jain and other associated persons were also not available with the Department which is crucial documentary proof of such bogus entry. Hence, entire bogus accommodation entries of the said purchases have escaped assessment. Thus, the assessee has accommodated bogus entires of above said purchases, which cannot be allowed. Thus, in the case of the assessee, income to that extent has escaped assessment on account of bogus accommodation entries of purchases. In view of the above facts, I have reason to believe that income of ₹ 90,17,059/chargeable to tax has escaped assessment within the meaning of section 147 of the I.T.Act, on account of failure on the part of the assessee to disclose fully and truly all material facts and necessary for his assessment for A.Y. 2008-09. 4. The petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs from the end of relevant assessment year would therefore, be permissible. III. Counsel contended that additional income arising out of such bogus transactions would not qualify as business income and therefore, would not be exempt under section 10AA of the Act. He submitted that as held by this court in this case of Fakir Mohmed Haji Hasan v Commissioner Of IncomeTax , reported in 247 ITR 290, such income would be income from other sources. Counsel relied on section 69C of the Act in this context. Counsel contended that it is the satisfaction of the Assessing Officer whether income chargeable has escaped assessment. At the stage of notice for reopening what is required is material, primafacie suggesting escapement of income. In this context, the Counsel also relied on the decision of Division Bench of this Court in case of Yogendrakumar Gupta v. IncomeTax Officer, reported in 366 ITR 186. 7. Regarding the first contention of the counsel for the petitioner, we have perused the reasons recorded by the Assessing Officer for issuing notice for reopening. We have also perused the original file produced by the department. Relevant documents from the file were als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would undoubtedly require application of mind on her part when certain materials collected by some other wing of the department is placed before her. There can however be no straightjacket formula of the manner in which, mind can be applied or shown to have been applied. The same may be gathered from the reasons recorded and other contemporaneous material on record. In this context, we are satisfied that it was the decision of the Assessing Officer, based on the materials collected by the investigation wing that she recorded the reasons to form a belief that income chargeable to tax had escaped assessment, which led her to issue notice of reopening. 9. The second contention of the counsel for the petitioner that there was no failure on the part of the assessee to disclose truly and fully all material facts, must meet with summary rejection. There is sufficient primafacie material on record that the assessee had made bogus purchases through the web of entities created by Bhanwarlal Jain. Obviously such facts were not on record during the original assessment proceedings. 10. This brings us to the last contention of the petitioner. We may recall, the argument is that in any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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