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TMI Blog2022 (7) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Commissioner of Income Tax (Appeals)-47, Mumbai in appeal No.CIT(A)-47, Mumbai/10448/2015-16 dated 12/01/2022 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/03/2015 by the ld. Dy. Commissioner of Income Tax, Central Circle 1(3), Mumbai (hereinafter referred to as ld. AO). 2. The assessee primafacie has challenged the validity of re-assessment in the instant case. 3. We have heard rival submissions and perused the materials available on record. We find that assessee is engaged in the business of import, export and trading of cut, polished and rough diamonds. The return of income for the A.Y.2007-08 was originally filed on 12/01/2007 declaring total income of Rs.1,44,034/-. There was a survey u/s.133A of the Act was conducted in the premises of the assessee on 09/07/2008. In the assessment framed pursuant to the survey proceedings, the assessee was treated as an accommodation entry provider by the Assessing officer and commission income on certain transactions were added in the hands of the assessee. This assessment was framed u/s.143(3) of the Act on 24/12/2009. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Jurisdictional High Court in the case of PCIT vs. Lark Chemicals (P) Ltd., reported in 99 taxmann.com 311 (Bom). The Special Leave Petition (SLP) preferred by the Revenue against this judgement of the Hon ble Bombay High Court was dismissed by the Hon ble Supreme Court in the case of PCIT vs. Lark Chemicals (P) Ltd., reported in 99 taxmann.com 312 vide order dated 05/10/2018. 3.2. The reasons recorded by the ld. AO for reopening the assessment are reproduced hereunder for the sake of convenience:- A letter bearing no. DGIT(Inv)/Information/Diamond/2013-14 dtd. 14.03.2014, alongwith enclosures, is received from the Director General of Income Tax (Investigation), Mumbai, through the Commissioner of Income Tax -II, Surat and the Addl. Commissioner of Income Tax, Range-6, Surat. The said letter contained details of accommodation entries of bogus purchases, sales, unsecured loan, share capital, etc., given by Shri. Rajendra Jain Group, Shri Sanjay Choudhary Group and Dharmichand Jain group of Mumbai, leading entry providers. 2. The facts of the case is that, a search and seizure action was carried out by the Investigation wing, Mumbai In the Shri. Rajendra Jain Group, Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities are disclosed to be trading of rough and finished diamonds and manufacturing of diamond jewellery. However, no stock of diamond was found from any of the premises searched or surveyed. The statements of all the persons recorded during the course of search revealed that this group was engaged in giving accommodation entries and this fact has also been admitted by the employees, the dummy partners/ dummy Directors/ dummy proprietors of the entities of this group as also by Shri. Rajendra Jain Group, Shri Sanjay Choudhary Group and Dharmichand Jain group of Mumbai. 5. The Investigations made by the investigation wing revealed that actual Importers of rough diamonds Import part of their diamond requirement through benami entities operated by Shri. Rajendra Jain Group, Shri Sanjay Choudhary Group and Dharmichand Jain group of Mumbai family, which ensures benefit of suppression of turnover, profits and capital requirement of the former. The consignments are sent on credit by the suppliers in the names of these benami entities at the instance of the actual importers and on receipt of the imported consignments from Customs, through CHA, the consignment is handed over to the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year, sanction u/s. 151(1) of the Act has to be obtained from the Commissioner of Income Tax-II, Surat. 3.3. Since the reopening is made beyond four years from the end of the relevant assessment year, the proviso to Section 147 of the Act would come into operation. From the perusal of the aforesaid reasons, it is evident that the ld. AO had not applied the proviso to Section 147 of the Act by indicating in the reasons as to whether there was any failure on the part of the assessee to make full and true disclosure of facts that are material for the purpose of assessment. Hence, the reopening proceedings deserve to be quashed on this count also. Reliance in this regard is placed on the decision of the Hon ble Jurisdictional High Court in the case of Hindustan Lever Ltd., vs. R B Wadkar reported in 268 ITR 332. The operative portion of the judgement is as under:- 20. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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