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TMI Blog2016 (8) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer, he noted that Rajendra Jain and Surendra Jain merely provided accommodation entries without actual sale of diamonds. The assessee had thereby claimed higher expenditure and reduced the profit. It cannot be stated that the Assessing Officer did not have tangible materials to form a belief that the income chargeable to tax had escaped assessment. Such information was not available during the original assessment. Obviously the assessee would not make such disclosures. The requirement for reopening of the assessment even beyond a period of four years are therefore, satisfied. Merely because such information was supplied to the Assessing Officer by the investigation wing of the department would not mean that the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion), Mumbal vide letter dated 14.03.2015. 2. On going through the Information received, it is noticed that Shri Rajendra jain group and Shri Surendra jain is managing total 10 concerns/companies. They are some of the entry providers operating in Mumbai, indulging in providing accommodation entries in the nature of bogus sales, and unsecured loans. During the course of search operation u/s 132 of the income Tax Act in the the case of Shri rajendra jain group, Shri Sanjay chandhary group Shri dharmichand group on 03.10.2013, The managing person of the company Sparsh export Pvt. Ltd. Shri Rajendra jain and Shri Surendra jain confessed on oath that they are not doing any real trading in diamonds but indulged in paper transaction only and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... times these name lending companies/concerns issue bill of rough diamonds to local purchasers and show purchase of polished diamonds from them to square up the transactions. On receipt of such cut and polished diamonds, these concerns, issue sales bills to various parties at the request of the actual importers. The actual importer arranges these sale proceed from parties to whom sale bills were issued. Once the sale proceeds are received, these name lending concerns makes import remittance at the request of importer. As regards the loan and advances, these name lending concerns import goods on credit basis for longer period and sale the goods on immediate payment basis. Therefore they receive check immediately and use the same for giving loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thiness to allow gold in the quantity as loan to the assessee. In absence of creditworthiness of the aforesaid persons l have reasons to believe that loan in fold shown in the name of aforesaid persons is not genuine. It is further seen that the assessee has shown similar gold as loan from other persons also. 5. In the view of the above mentioned facts. it is observed that failure is on the part of the assessee to disclose fully and truly all materials facts necessary for assessment. Under the circumstances, I have to reasons to believe that loan shown in gold from aforesaid persons ₹ 95,00,425/- and the fake purchase transaction amount of ₹ 11,99,945/- have escaped income of the assessee from assessment. l have therefore, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice for reopening is therefore, valid. 6. The reasons recorded indicate two reasons for reopening the assessment. The first reason is that the assessee had purchased cut and polished diamonds of ₹ 11.99 lacs from one Sparsh Export Pvt. Ltd. which was managed by Rajendra Jain and Surendra Jain. The reasons record detail background of these persons who were subjected to search operations, during which, their statements were also recorded indicating that they were engaged in bogus billing and providing fake accommodation entries. The Assessing Officer therefore, noted that these persons were mere entry providers. They were indulging in providing accommodation in the nature of bogus sales. In the statements they had also confessed to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee had taken gold loan from such person was very much part of the returns filed by the assessee. If during the scrutiny assessment, the Assessing Officer desired to examine such transactions in context of creditworthiness of these persons, it was always open for him to do so. However, scrutiny assessment cannot be reopened beyond a period of four years without there being anything to suggest that the income chargeable to tax had escaped assessment due to failure on part of the assessee to disclose truly and fully all material facts. Even otherwise, the Assessing Officer had raised multiple queries during the original assessment which included the following : Please submit copy of A/c. of all creditors and debtors above ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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