Rolex Rings Limited Vs DCIT/ACIT (ITAT Rajkot)
Suspicion, Unsigned Sanction & Denied Cross-Examination: ITAT Wipes Out ₹5.40 Crore Accommodation-Entry Addition
Summary: In Rolex Rings Ltd. v. DCIT, ITA No. 893/Rjt/2025, decided on 28 August 2026, the Rajkot Bench of the Income Tax Appellate Tribunal quashed reassessment for AY 2020-21 involving an addition of ₹5.40 crore u/s 69A read with section 115BBE. The Tribunal found that reopening was based on uncorroborated third-party material without a live nexus to the assessee, approval u/s 151 was neither manually nor digitally signed and cross-examination of the principal witness was denied. It further deleted the addition on merits because the assessee’s name or signature did not appear in the alleged accommodation-entry records.
Relevant Facts
Rolex Rings Ltd. filed its original return on 11 February 2021, declaring income of ₹49.67 crore and book profit of ₹72.78 crore u/s 115JB. A revised return filed on 30 March 2021 declared income of ₹49.47 crore, while book profit remained unchanged.
A search u/s 132 was conducted on the Qutone Group on 9 August 2022. During the search, diaries, cash books, Tally data and other digital material were seized. Statements of Rajesh Janaklal Daftary and his daughters were also recorded.
