TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 708
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....he facts of the case are that assessee individual had filed original return of income for assessment year under appeal on 21st September, 2007 declaring total income at Rs. 1,42,307/-. On the basis of information received from DGIT(Inv.), Mumbai, the case was reopened by issuing notice u/s 148 dated 29.03.2014, after getting prior approval from the Addl. CIT, Range-9, Surat. The AO issued statutory notices, the assessee informed the AO that return of income filed originally may be treated as return having been filed in response to notice u/s 148 of the Act. The AO considering report of Investigation Wing and other material found the assessee being proprietorship of M/s Gem Art, Surat has taken accommodation entry from AVI Exports in a sum....
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.....Y. : 2007-08 Reasons for the belief that income has escaped assessment: Search action was carried out by the Investigation wing, Mumbai on various groups which are involved in providing accommodation entries by way of issuing non genuine bills. On examination of the above information I have reason to believe that the above named assessee is a beneficiary of non genuine transactions of Rs. 12,48,93,566/- during FY 2006-07 from the following parties: S.No. Name & PAN of the concern with whom transaction made Amount (Rs.) 1. Gem Art 12,48,93,566/- In view of the above, I have reason to believe that the assessee has earned income exceeding Rs. 1,00,000/- on the above non genuine transaction, which is not shown in the return of ....
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....ble High Court in para 9 to 12 of the order are reproduced as under: "9. If on the basis of information made available to him and upon applying his mind to such information, the Assessing Officer had formed a belief that income chargeable to tax has escaped assessment, the Court would have readily allow him to reassess the income. In the present case however, he recorded that the information required deep verification. In plain terms therefore, the notice was being issued for such verification. His later recitation of the mandatory words that he believed that income chargeable to tax has escaped assessment, would not cure this fundamental defect. 10. Ld. Counsel for the Revenue, however, urged us to read the reasons as a whole and come ....
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....under: "7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied". In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down : - "The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, I am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not app....
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....ed as commission agent. PB 73 to 79 are details of sale and purchases made on commission basis from AVI Exports on commission basis by assessee. PB 95 is the assessment order u/s 143(3) in the case of same assessee for AY 2006-07 dated 21.10.2008 in which the AO accepted that assessee derived income from commission agent of diamonds. He has, therefore, submitted that reopening of assessment is illegal and bad in law and addition is wholly unjustified. 6. On the other hand, Ld. DR relied upon orders of the authorities below and submitted that information was received from Investigation Wing, Mumbai that assessee received accommodation entries. The AO, therefore, correctly initiated the reassessment proceedings in the matter. 7. We have con....