2009 (6) TMI 656 - ITAT AMRITSAR

Addition - Reassessment - Business income or accommodation entry - Applications for admission of the additional grounds - assessee filed return of income on 31st Oct., 1998 declaring income of ₹ 73,180 from business of sale and purchase of gold jewellery - It appears that the bank account has not been considered while declaring return income - it was contended that the entire accommodation entry activities were actually carried out on the behest of Shri V.K. Umat of Umat & Associates and that the returns were filed merely to create paper records to give an impression that genuine jewellery business - AO initiated the reassessment proceedings for the asst. yr. 1998-99 - AO, on the basis of the entries in the bank account observed that the return filed by the appellant was too low as compared to substantial transactions appearing in the bank account of the appellant. In these circumstances, the AO rightly came to a prima facie belief of escapement of income in the hands of the appellant

As regards the reopening of assessment proceedings for the asst. yrs. 1999-2000 to 2002-03, no contention was raised before us by the learned Authorised Representative, even though specific ground has been raised challenging the validity of the initiation of proceedings under s. 147 of the IT Act - The case of the appellant squarely falls in Expln. 2 to s. 147 of the Act which provides that where no return of income is furnished even though the assessee has taxable income, such case would be a case of deemed escapement of income - Held that: proceedings initiated by the AO under s. 147 of the IT Act for the various asst. yrs. 1998-99 to 2002-03 is valid and there was no error in the order of the CIT(A) upholding the same

whether on the facts and the circumstances of the case it can be held that the appellant was during the relevant year engaged in jewellery business or not - IT Department has conducted enquiry from various sellers of the jewellery and based on the same the learned Authorised Representative for the appellant vehemently contended that every seller had confirmed having sold jewellery to M/s Vishnu Jewellers, the proprietary concern of the appellant - On a careful perusal of the statement of Shri Vijay Gupta, we note that the said person in his statement stated that he worked with Umat & Associates from April, 2000 to February/March, 2002 and also stated names of various other concerns with whom he has worked as part-time accountant - Held that: there are substantial evidences available on record to establish the fact that the appellant was actually engaged in jewellery business and was not providing accommodation entries as has been alleged by the Revenue authorities - the evidences placed before us supports the case of the assessee that the assessee, Shri Rishi Grover was actually carrying on jewellery business under its proprietary concern, M/s Vishnu Jewellers, during the relevant year - Decided in favor of the assessee