TMI Blog2019 (10) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of CIT vs. S. Goenka Lime Chemicals Ltd. [ 2015 (5) TMI 217 - MADHYA PRADESH HIGH COURT] . I Initiation of reassessment proceedings as well as approval/sanction of Addl. CIT u/s 147/148 of the Act are invalid, illegal and against the provisions of law - Reopening of the assessment is invalid and bad in law and liable to be quashed. - Decided in favour of assessee. - ITA No. 1460/Ahd./2017 - - - Dated:- 27-8-2019 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Meena, Accountant Member For the Assessee : Shri Himanshu Gandhi, CA For the Revenue : Shri S.R. Meena, Sr. DR ORDER PER SHRI BHAVNESH SAINI, J.M. This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-3, Surat dated 22.03.2017 for AY 2007-08, challenging the initiation of reassessment proceedings u/s 147 of the Act and addition of ₹ 1,56,82,850/- on account of bogus purchases from M/s AVI Exports. 2. Briefly the facts of the case are that assessee individual had filed original return of income for assessment year under appeal on 21st September, 2007 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 1,00,000/- on the above non genuine transaction, which is not shown in the return of income filed for AY 2007-08. Thus, the above income exceeding ₹ 1,00,000/- has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly, all material facts necessary for as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms require us to ignore an important sentence from the reasons recorded viz. it needs deep verification . 11. Before closing, we can only lament at the possible revenue loss. The law and the principles noted above are far too well settled to have escaped the notice of the Assessing Officer despite which if the reasons recorded fail the test of validity on account of a sentence contained, it would be for the Revenue to examine reasons behind it. 12. Both these Tax Appeals are dismissed. 4.2 He has referred to PB 26 to 28 in which the Addl. CIT, Range-9, Surat granted sanction for reopening of the assessment in which also AO has wrongly mentioned proprietary concern of assessee M/s Gem Art, the concern with whom transaction of bogus purchases has been conducted. He has submitted that in column no. 12 the Addl. CIT has mentioned Yes, satisfied while giving sanction/approval for issue of notice u/s 148 of the Act. He has submitted that in the same circumstances, the Hon ble MP High Court in the case of CIT vs. S. Goenka Line Chemicals Ltd. 56 taxmann.com 390 did not approve the sanction/approval u/s 148 in accordance with law an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 44AB in which the nature of business of assessee has been explained 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 considered the rival submission and perused the material available on record. It is well settled law that validity of reassessment proceedings have to be determined with reference to the reasons recorded for reopening of the assessment. The reasons for reopening of the assessment are reproduced above in which the AO noted that search action was carried o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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