TaxTMI 
TaxTMI 
2026 (6) TMI 135
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....ates to Assessment Year (A.Y.) 2017-18. 2. The grounds of appeal raised by the assessee read as under: "1 On the facts and in the circumstances of the case as well in law, the Ld. PCIT Ahmedabad 1 has erred in law and on facts in setting aside the Assessment Order dated 13.05.2023 for the A.Y. 2017-18 under Section 263 of the Income Tax Act holding it to be erroneous and prejudicial to the interest of the Revenue. 2 On the facts and in the circumstances of the case as well in law, the Ld. PCIT Ahmedabad I has erred in law and on facts in holding that the assessment order dated 13.05.2023 for the A.Y. 2017-18 is passed by the A.O., without making proper examination of the transactions with Rati Diamonds Pvt Ltd when the ....
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....Ld. PCIT, however, rejected the contention of the assessee noting that the AO in his order passed had himself recorded that owing to the limited scrutiny nature of the proceedings only the bank credits in the account of M/s. Rati Diamond Pvt. Ltd. were examined. That verification of source of the source of such credits was not done being beyond the scope of scrutiny assessment. The PCIT noted that the bank entries of the M/s. Rati Diamond Pvt. Ltd. revealed all debit entries to be immediately preceded by the corresponding entries, indicating circular movement of funds without genuine business rationale. He further noted that in the succeeding assessment year reopening done for the same reason had culminated in addition being made on account....
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....ly examined by the AO during assessment proceedings. This is for the reason that as per the information available with the AO, which is recorded in the order of the Ld.PCIT also, the assessee had availed accommodation entry from M/s. Rati Diamond Pvt. Ltd. through layering, with the information revealing that M/s. Rati Diamond Pvt. Ltd. was managed by Shri Shripal Vora who was engaged in a racket of providing accommodation entry through various concerns. That the operation of providing accommodation entry involved the operation of multiple concerns including M/s. Rati Diamond Pvt. Ltd. The facts on record clearly revealed the transaction of the assessee with M/s. Rati Diamond Pvt. Ltd.to be suspicious and lending credence to the information....
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....s a case of no enquiry conducted by the AO. Further, the fact noted by the Ld.PCIT that in the subsequent year transactions with M/s. Rati Diamond Pvt. Ltd. was treated as unexplained credits / accommodation entry by the AO in re-assessment proceedings, further, strengthens the case that the AO had conducted incomplete / inadequate enquiry on the similar transaction with M/s. Rati Diamond Pvt. Ltd. in the impugned year. Therefore, we hold the Ld. PCIT had rightly held the assessment order passed in the present case to be erroneous causing prejudice to the Revenue. 6. The only argument advanced by the Ld. Counsel for the assessee before us was that revisionary powers could not be exercised on the very same issue for which the reopening wa....