SAJANI JEWELS Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These petitions arose in similar background. They have been heard together and would be disposed of by this common judgment. For convenience, facts may be noted from Special Civil Application No.17935 of 2015. Petitioner is a partnership firm and is engaged in the business of manufacturing and export of diamond studded jewelery. Petitioner's manufacturing unit is situated in the Special Economic Zone and the entire export income is exempt from tax under Sec. 10AA of the Income Tax Act 1961 ('the Act' for short).

(2.) For the assessment year 200809, the petitioner filed its return of income on 10/8/2008, declaring nil income after claiming exemption of Rs.3.87 Crores (rounded off) under Sec. 10AA of the Act. The return of the assessee was taken in scrutiny. The Assessing Officer framed the assessment on 28/12/2010 denying the exemption under Sec. 10AA as claimed by the petitioner. The petitioner challenged the order C/SCA/17935/2015 of assessment before dismissed the appeal petitioner's further allowed by an order the Commissioner (Appeals), who by order dtd. 14/9/2011. The appeal to Tribunal was however, dtd. 20/7/2012. The entire exemption under Sec. 10AA of the Act was granted. We are informed that the Revenue challenged such order of the Tribunal in Tax Appeal No.898 of 2012, which was dismissed on 6/3/2013.

(3.) To reopen the scrutiny assessment previously framed, the Assessing Officer issued impugned notice dtd. 27/3/2015. She supplied to the assessee the reasons recorded by her for issuing the notice. Such reasons read as under: In this case, a search and seizure action was initiated in the premises of Bhanwarlal Jain and Family on 11/10/2013 wherein the statement of shri Bhanwarlal Jain was recorded on oath. In the said statement, shri Jain had elaborated the modus operandi of providing accommodation entries to the entities / individuals through a number of bogus concerns controlled either by him or his close associates who were only namesake proprietors/partners/directors. The said concerns were providing bogus sale entries (Purchase entry to the beneficiary entitles) for which they used to receive cheque. After that, cash was paid to the beneficiary entities after deducting commission etc. He had also provided a list of the said bogus concerns wherein the name Maridian Gems has been appeared. Such dummy partners' statement on oath was also recorded who have admitted that they were only namesake partners/ directors/ proprietors. The said information has been received from the DIT (Inv)II, Mumbai vide letter No.DIT (Inv)II/Information/BLJ/SAL/201415/305 dtd. 16/7/2014. It has come to notice that the assessee has accepted bogus accommodation entries for purchase of Rs.90.17 Lacs from Maridian Gems in A.Y. 20082009 to inflate purchases. This information was not available at the time of passing the original assessment order. Further the statements of Bhanwarlal Jain and other associated persons were also not available with the Department which is crucial documentary proof of such bogus entry. Hence, entire bogus accommodation entries of the said purchases have escaped assessment. Thus, the assessee has accommodated bogus entires of above said purchases, which cannot be allowed. Thus, in the case of the assessee, income to that extent has escaped assessment on account of bogus accommodation entries of purchases. In view of the above facts, I have reason to believe that income of Rs.90,17,059.00 chargeable to tax has escaped assessment within the meaning of sec. 147 of the I.T.Act, on account of failure on the part of the assessee to disclose fully and truly all material facts and necessary for his assessment for A.Y.200809.