TaxTMI 
TaxTMI 
2026 (3) TMI 784
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....and the assessee has raised following grounds in this appeal:- "1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has erred in upholding the impugned assessment order passed by the National Faceless Assessment Centre, Delhi and deserves to be quashed. 2. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has erred in upholding the reassessment proceedings though the reasons recorded by assessing Officer based on which assessee's case is reopened itself is without verification of records, without application of mind and based on information received from third party without prior verification. 3. In law and in the facts and circumstances of the appellant's case, Ld. CIT(A) has erred in confirming the validity of notice issued u/s 148 4. In law and in the facts and circumstances of the appellant's case, Ld. CIT(A) has erred in upholding the addition on account of job work charges as unexplained income of the appellant amounting to Rs. 39,42,558/-. 5. In law and in the facts and circumstances of the appellant's case, Ld. CIT(A) has erred in upholding t....
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....ons recorded merely reproduce the information received and do not demonstrate any verification of books of account or examination of the returned income. It was further contended that the statement of Shri Bharat Kumar Patel, which forms the basis of reopening, was retracted by way of affidavit dated 04.06.2018 and that he was not even a partner of the assessee firm. According to the assessee, there was no live nexus between the alleged jewellery valuation and escapement of income. The assessee relied on the following case-laws:- i. Meenakshi Overseas (P.) Ltd. V. Principal Commissioner of Income Tax [2017] 82 taxmann.com 300, ii. Varshaben Sanatbhai Patel Vs. Income Tax Officer vide ITA No: 12873 of 2014 Dated 13/10/2015 (Gujarat High Court), iii. Sarthak Securities Co. (P.) Ltd. v. Income-tax Officer, 195 TAXMAN 262 (Delhi High Court), iv. M/s Narendra Polychem(P) Ltd. in ITA no. 6087/Del/2013 dated 03/06/2016, v. ACIT Vs. Devesh Kumar vide ITA No: 2068/Del/2010 dated 31/10/2014 (Delhi High Court) 8.2 The Ld. CIT(A), however, held that there was tangible material in the form of seized printouts and statement recorded during GST p....
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.... issues which are discussed below: (I) The appellant submitted in his reply that the case was re-opened on the basis of the information regarding search of CGST Wing of the Central Excise, Customs and Service Tax Department wherein a printout was seized vide Panchnama dated 19.02.2018 mentioning manufacturing of additional Jewellery articles and statement of Shri Bharat Kumar Patel that the firm had manufactured additional Jewellery of Rs. 9,85,63,946/- which was not disclosed in the books of account. The appellant submitted that Shri Bharat Bhai Patel retracted his affidavit dated 04.06.2018. The appellant submitted that the Assessing Officer has not made any Independent Inquiry or verification to reach the conclusion. The Assessing Officer referred to the following decisions of various Hon'ble High Courts on this issue: (i) Commissioner of Income-tax vs. Sfil Stock Broking Ltd. 325 ITR 285. (ii) Commissioner of Income-tax vs. Atul Jain. 299 ITR 383. (iii) Kamdhenu Steel & Alloys Ltd 248 CTR 33. I find that it has been stated by the appellant that Shri Bharat Bhai Patel (Bharat Kumar Patel) retracted his statement dated 22.05.2018 and f....
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....-tax Officer-Ward 7(3) [2010], 195 TAXMAN 262. (iii) ACIT Vs. Devesh Kumar vide ITA No: 2068/Del/2010. (iv) Hon'ble Delhi Bench in case of M/s Narendra Polychem(P) Ltd. in ITA no. 6087/Del/2013. (v) Decision of Hon'ble Delhi High Court in case of Meenakshi Overseas (P.) Ltd. V. Principal Commissioner of Income Tax [2017] 82 taxmann.com 300 (Delhi). (vi) Rajesh Gupta (HUF) Versus ITO, Ward - 31(4) Delhi in ITA Appeal no. 5712/Del/2019 dated 19/04/2021. (vii) Bishwa Nath Kharakia Versus ITO Ward 34(1) Kolkata 2021(4) TMI 1192 - ITAT Kolkata in Appeal no. 1487/Kol/2019. In the present case the Assessing Officer received reliable and relevant information based on material found during the search of CGST Authorities at the premises of the appellant. In case of PCIT Rajkot-3 vs. Gokul Ceramics, (0/TAXAP/2015), order dated 29 June, 2016) held that: "9. It can thus be seen that the entire material collected by the DGCEI during the search, which included incriminating documents and other such relevant materials, was alongwith report and show-cause notice placed at the disposal of the Assessing Officer. These materials prima faci....
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....ant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147. The Hon'ble Supreme Court in case of Raymond Woolen Mills vs. ITO (236 ITR 34) held that: "3. In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The a....
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.... labour charges. It was further contended that all job work receipts were duly recorded in books of account and that no defect was pointed out in the books. The books were not rejected under Section 145 and no evidence was brought on record to show actual receipt of unaccounted job charges. 9.2 The Ld. CIT(A) upheld the addition holding that application of 4% was reasonable. The relevant findings of the Ld. CIT(A) are as under:- "In this ground the appellant has challenged the addition of Rs. 39,42,558/- made by the Assessing Officer on the ground that Job charges computed @4% was not shown in the total income. The appellant has submitted that the addition has been made on the basis of Shri Bharat Kumar Patel who was not a partner and also retracted his statement. The appellant submitted that the Jewellery found during search by GST department does not prove that it was for unaccounted job work. The appellant also submitted that the job work estimated at 4% is on higher side and the job charges are only on the price of gold and not includes value of Diamonds and Precious Stones. The appellant submitted that Jewellery valued at Rs. 9,85,63,946/- included Diamond of Rs. 4....
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....i-Evasion), Surat vide their letter dated 21.07.2020. Since the assessee is the owner of the jewellery and the same was not reflected in the regular books, also that assessee has not given any details about any other person who can be said to be the owners of the jewellery and also keeping in view the fact that no other person came forward to be the owner of the jewellery, we hold that the Revenue Authorities have rightly assessed the value of the jewellery in the hands of the assessee. Ground No. 6 - Application of Fixed Job Work Rate 11. This ground challenges the application of fixed assumed job work rate on jewellery valuation. The Assessing Officer applied a flat rate of 4% on the jewellery valuation. The assessee contended that making charges depend upon weight of gold consumed and complexity of design and not on valuation of jewellery. It was submitted that no uniform industry rate exists and application of a flat rate is arbitrary. We find that the job charges, in any way, has been kept at the lowest minimum of 4%; hence we decline to interfere with the order of Revenue Authorities. 12. In the result, the appeal of the assessee for AY 2016-17 is dismissed. Appea....