ITO Vs. Manish N. Lodha

Parties Involved

Facts Summary

The assessee, Manish Lodha, proprietor of Aryan Exports, engaged in the import, export, and trading of diamonds, filed his return of income for the Assessment Year (AY) 2011-12 on 27/09/2011, declaring income at Rs. 2,3,670/-. The case was reopened by issuing notice under Section 148 of the Income Tax Act, 1961 on 28/03/2018 based on information received from DDIT(Inv), Surat, that the assessee made financial transactions with M/s Delight Diam Private Limited, a company managed by Deepak Babel. The Assessing Officer issued a show cause notice to the assessee inter alia stating that the assessee has not made any real business activity but provided accommodation entry. The Assessing Officer made an addition of Rs. 14.80 lacs by treating the transaction with Delight Diam Pvt. Ltd. as a bogus entry and added in the assessment order dated 24/12/2018 passed under Section 143(3) r.w.s. 147 of the Act. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) against the addition and the reopening. The Commissioner of Income Tax (Appeals) allowed the appeal on merit, holding that the Assessing Officer made addition without proper verification of fact. The revenue filed an appeal before the Tribunal against the order of the Commissioner of Income Tax (Appeals). The assessee filed a cross objection challenging the validity of the reopening and issuance of notice under Section 148 of the Act.…

Legal Issues

• 1. Whether the addition made by the Assessing Officer is justified?
• 2. Whether the reopening of the assessment is valid?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

Similar Judgements

• ITA No. 2208/Mum/2024 & ITA No. 5169/Mum/2025

  Mumbai Bench benchAY 2017-2018Dismissed

• Shri Snehal Rohit Jhaveri vs. Income Tax Officer-Ward 19(3)(4)

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• ACIT – 19(1), Mumbai Vs. Parul Diamond

  H(SMC) Bench, Mumbai benchAY 2007-08Dismissed

• Vaibhav Dipak Shah vs. ACIT

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• DCIT, CC-1(1), vs. Rajendra S. Karnavat

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• ACIT Vs Keshav Diamond Pvt. Ltd.

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