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TMI Blog2022 (6) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... O from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. Therefore, we dismiss the ground raised by the assessee challenging the validity of reassessment. - SHRI PAWAN SINGH, JM And DR. A. L. SAINI, AM For the Assessee : Shri Hiren Vepari, CA For the Respondent : Shri H. P. Meena, CIT(DR) and Shri Vinod Kumar, Sr. DR ORDER PER DR. A. L. SAINI, AM: Captioned cross appeals filed by the Assessees and Revenue, pertaining to Assessment Years (AYs) 2007-08 to 2013-14, are directed against the separate orders passed by the Learned Commissioner of Income Tax (Appeals)-3, Surat [in short the ld. CIT(A) ], which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3) and under section 147 r.w.s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. Since, the issues involved in all these appeals are common and identical, therefore these appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated persons have admitted that they are engaged in providing bogus accommodation entries of purchase sales, loans and advances to various beneficiaries parties, therefore Assessing Officer made addition on account of unverifiable purchase and on account of rejection of diamonds from opening stocks. On appeal, ld. CIT(A) restricted the addition at the rate of 5% of bogus purchase following the judgment of Hon'ble Gujarat High Court in the case of M/s Mayank Diamond Ltd., in TA No.200 of 2003, order dated 07.11.2014. 4. Aggrieved by the addition made by ld. CIT(A), the Revenue and Assessee both are in further appeal before us. 5. The Ld. Counsel contended that the 5% disallowance sustained by the ld. CIT(A) should also be deleted, whereas Ld. Departmental Representative (Ld. DR) for the Revenue contended that addition made by the Assessing Officer should be upheld. 6. Based on these facts, we note that issue involved in these appeals are squarely covered by the judgment of this Coordinate Bench in the case of Pankaj K. Chaudhary (in ITA No.1152/AHD/2017, for AY.2007-08, order dated 27.09.2021, wherein the Tribunal has sustained the addition @ 6% of bogus purchases / accommodati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further similar view was taken by Hon ble Jurisdictional High Court in Pushpak Bullion (P) Ltd Vs DCIT (supra). Therefore, respectfully following the order of Hon ble High Court, we find that the assessing officer validly assumed the jurisdiction for making re-opening under section 147 on the basis of information of investigation wing Mumbai. So far as other submissions of the ld AR for the assessee that there is no live link of the reasons recorded, we find that the Hon ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd clearly held that when assessing officer received information from the investigation wing that two well-known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified. Hence, the ground No. 1 in assessee s appeal is dismissed. 19. Ground No. 2 in assessee s appeal and the grounds of appeal raised by the revenue are interconnected, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs.66,09,62,458/-. The assessee has shown Gross Profit @ 0.78% and net Profit @ 0.02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs.1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs.4.34 Crore, which was shown to have purchased from the entity managed by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no stock of goods/ material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). Before us, the ld CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. We find that in Mayank Diamonds the Hon ble High Court restricted the additions to 5% of GP. We have seen that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turnover o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the coordinate bench in the case of Pankaj K. Chaudhary (supra). Except to AY.2007-08 and 2008-09, assessee has pressed ground relating to reopening, which is being adjudicated in subsequent paras of this order. 13. Before parting, we would like to deal with other arguments made by Ld. Counsel for the assessee, challenging the validity of reopening of assessment under section 147 of the Act. The ld Counsel contended that reasons recorded by the assessing officer is bad in law. The reasons were recorded based on the report of investigation wing, which came late in the possession of the assessing officer whereas; the reasons were recorded prior to the report of the investigation wing. Besides, the assessing officer did not dispose of the objection of the assessee. 14. On the other hand, ld DR for the Revenue submitted that objections raised by the assessee were disposed of by the assessing officer, vide letter dated 09.09.2014 of the assessing officer (vide para No.3 of assessment order). Besides, the assessment was reopened based on information available before the assessing officer and not based on the report of investigation wing, hence reasons were recorded by the assessing offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contents of such recorded reasons which assumes importance. In other words, a mere statement that the Assessing Officer had reason to believe that certain income has escaped assessment and such escapement of income was on account of non-filing of the return by the assessee or failure on his part to disclose fully and truly all material facts necessary for assessment would not be conclusive. Nor, absence of any such statement would be fatal if on the basis of reasons recorded, it can be culled out that there were sufficient grounds for the Assessing Officer to hold such beliefs. 17. A three Judges bench of Hon'ble Gujarat High Court in the case of A.L.A. Firm v. CIT, 189 (1991) ITR 285, after an elaborate discussion of the subject opined that the jurisdiction of the Income Tax Officer to reassess income arises if he has in consequence of specific and relevant information coming into his possession subsequent to the previous concluded assessment, reason to believe, that income chargeable to tax and had escaped assessment. It was held that even if the information be such that it could have been obtained by the I.T.O. during the previous assessment proceedings by conducting, an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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