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TMI Blog2017 (6) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Director of Income Tax (Investigation)-II, Mumbai was proved beyond doubt. When the assessee claims that the diamonds were purchased and produced the ledger and the details of payment made to M/s Daksh Diamonds, it is obligation on the part of the AO to examine the necessity of the assessee to make payment through banking channel. Merely because M/s Daksh Diamonds has not responded to the letters issued by the Assessing Officer under Section 133(6) of the Act, that would not create any doubt in the mind of the Assessing Officer that the information received from Deputy Director of Income Tax (Investigation)-II, Mumbai would be proved. The Income-tax Act confers ample power and authority on the AO to enforce the attendance of M/s Daksh Diamonds and call for records from them to verify the transaction made by the assessee. The Assessing Officer is not expected to leave the matter as such merely because M/s Daksh Diamonds has not responded to her letters issued under Section 133(6) of the Act. If the Assessing Officer did not want to proceed after issuing letters under Section 133(6) of the Act, the assessee cannot be penalized on presumption. The matter would stand differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of Delhi High Court in CIT v. Orient Craft Ltd. (354 ITR 546). Therefore, according to the Ld. counsel, the reopening of assessment is not justified. 3. On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the return of income was admittedly processed under Section 143(1) of the Act. It is not a case that there was no material for opening assessment. According to the Ld. D.R., there was search in the case of M/s Daksh Diamonds, Mumbai. On the basis of the report received from Deputy Director of Income Tax (Investigation)-II, Mumbai, the Assessing Officer reopened the assessment since there was escapement of income. The report received from Deputy Director of Income Tax (Investigation)-II, Mumbai discloses bogus entries of purchase to the extent of ₹ 9.70.515/-. Therefore, the Ld. D.R. submitted that the judgment of Madras High Court in TANMAC India (supra) would not be applicable at all, hence, the Assessing Officer has rightly reopened the assessment. 4. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the return filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived a report from the Deputy Director of Income Tax (Investigation)-II, Mumbai regarding bogus purchase of diamonds from M/s Daksh Diamonds, Mumbai. Therefore, the report received from Deputy Director of Income Tax (Investigation)- II, Mumbai was the basis for reopening of assessment. Hence, it cannot be said that the reopening was made on the basis of the material already existed on record. This Tribunal is of the considered opinion that when the Assessing Officer received information with regard to bogus purchase of diamonds from M/s Daksh Diamonds, she rightly reopened the assessment by issuing notice under Section 148 of the Act, therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 7. Now coming to the merit of the addition made by the Assessing Officer, Shri D. Anand, the Ld.counsel for the assessee, submitted that the assessee, in fact, purchased diamonds from M/s Daksh Diamonds and payments were made through banking channel. The invoice dated 05.07.2006 was produced before the Assessing Officer and the payment was also made on 01.09.2006, almost two months later. If the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banking channel. This is obvious from the observation made by the Assessing Officer in the impugned order itself. However, the purchase bills were not produced before the Assessing Officer. Therefore, the Assessing Officer came to a conclusion that the assessee has not produced proper documentary evidence to support the transactions. The CIT(Appeals) found that M/s Daksh Diamonds has not responded to the letters issued by the Assessing Officer under Section 133(6) of the Act. Therefore, the information provided by the Deputy Director of Income Tax (Investigation)-II, Mumbai was proved beyond doubt. When the assessee claims that the diamonds were purchased and produced the ledger and the details of payment made to M/s Daksh Diamonds, it is obligation on the part of the Assessing Officer to examine the necessity of the assessee to make payment through banking channel. Merely because M/s Daksh Diamonds has not responded to the letters issued by the Assessing Officer under Section 133(6) of the Act, that would not create any doubt in the mind of the Assessing Officer that the information received from Deputy Director of Income Tax (Investigation)-II, Mumbai would be proved. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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