TMI Blog2018 (2) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was received by the Assessing Officer nowhere discloses that M/s Shreeji Trading Company was an entity handled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain. No nexus has been established between Shri Anil Kumar Jain and Shri Pravin Kumar Jain who had made the statements under section 131 of the Act and M/s Shreeji Trading Company. Thus, the reasons are based upon a factually incorrect premise that M/s Shreeji Trading Company was being handled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain. Absence of any material on record to indicate any nexus between M/s Shreeji Trading Company and Shri Anil Kumar Jain and Shri Pravin Kumar Jain, erodes the very substratum for formation of belief that income has escaped assessment. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act at ₹ 2,55,90,900/-. Subsequently, the respondent issued the impugned notice under section 148 of the Act seeking to reopen the assessment of the petitioner for the year 2010-11. Subsequently, the reasons for reopening the assessment also came to be furnished to the petitioner, after which, the petitioner, by a letter dated 17.4.2017 raised various objections to the reopening and requested the respondent to drop the re-assessment proceedings. By an order dated 27.7.2017 the objections came to be rejected. 3. Mr. Bandish Soparkar, learned advocate for the petitioner submitted that the impugned notice has been issued on 31.3.2017 in relation to assessment year 2010-11, which is clearly beyond a period of four years from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. It was further submitted that in the present case, purchase and sale are not bogus and all taxes have been duly paid and re-assessment is sought to be made on the basis of misconception of facts. It was submitted that merely stating that income has escaped assessment is not sufficient and that valid reasons have to be recorded for holding that the income has escaped assessment and upon failure to do so, the notice under section 148 of the Act is bad and illegal. 4. On the other hand, Mr. M.R. Bhatt, senior advocate, learned counsel for the respondent, submitted that having regard to the reasons recorded for reopening the assessment, it is apparent that there is sufficient material for the Assessing Officer to form the belief that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommodation entries in the name of various entities. On verification of the details of various entities provided by them, it was revealed that one of the entity was M/s Shreeji Trading Company, 10-Shaligram, Bhupendra Road, Opp. Diwanpara, Police Chowki, Rajkot, Gujarat 360001 which is handled by them. The bank statement of M/s Shreeji Trading Company (Account No.0030102000009560) held with Axis Bank revealed that the assessee, M/s Amar Jewellers Ltd had received ₹ 7,09,00,000/- from M/s Shreeji Trading Company on 16.04.2009. On perusal of bank statement of the assessee available on record, it is seen that the assessee has received a sum of ₹ 7,09,00,000/- on 16.04.2009. The same has been debited to M/s Zaveri and Company Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading. In page-6 of the statement of Shri Pravinkumar Jain recorded on 18.2.2013, in response to question No.23, Shri Pravinkumar Jain has accepted that he was having financial transactions with M/s Jay Corporation, which is a concern operated by a cheque discounter and he used to give him cash and in return, he used to get cheques/ RTGS through M/s Jay Corporation. 7. Thus, the information provided to the Assessing Officer is that in the account of M/s Shreeji Trading Company there was a link with Jay Corporation and Shri Pravin Kumar Jain has accepted having financial transactions with Jay Corporation. However, no information has been provided to the effect that M/s Shreeji Trading Company was an entity handled by Shri Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reeji Trading Company and Shri Anil Kumar Jain and Shri Pravin Kumar Jain, erodes the very substratum for formation of belief that income has escaped assessment. Consequently, once there is no foundation for such belief, the reasons based thereupon have no legs to stand, hence, on the reasons recorded, the Assessing Officer could not have formed the belief that any income chargeable to tax has escaped assessment. Therefore, the assumption of jurisdiction on the part of the Assessing Officer under section 147 of the Act to reopen the assessment by issuing the impugned notice under section 148 of the Act is without authority of law, which renders the impugned notice unsustainable. 9. For the foregoing reasons, the petition succeeds and is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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