TaxTMI 
TaxTMI 
2023 (12) TMI 391
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....ely M/s Jindal Bullion Ltd. as belonging to the appellant and making an addition on the basis of such material in the hands of the appellant in assessment order passed u/s 153A of the Act. 2.1 That the CIT(A) erred in upholding the action of the Assessing Officer in making addition based upon material seized from the premises of a third party by relying upon the statement of Shri Parul Ahluwalia, Director of Jindal Bullion Ltd. 2.2 That on the facts and circumstances of the case and in law the CIT (A) erred in giving a finding in Para 4.2.18 of the order by holding that the appellant did not request for cross-examination of Shri Parul Ahluwalia at the assessment stage 2.3 That on the facts and circumstances of the case the CIT (A) was not Justified in upholding addition of Rs. 11,70,000/- out of total addition of Rs. 1,72,92,951/- as unexplained investments u/s 69 of the I.T. Act. 3. That on the facts and circumstances of the case and in law, the CIT (A) erred in not disposing off the objections of the appellant challenging the maintainability of the assessment order passed u/s 153A of the IT Act in which additions were made on the basis of alleg....
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....3.1 That as per the proposition of law settled by the Delhi High Court in the case of Pr. CIT (Central) Vs. Anand Kumar Jain ITA No.23 of 2021, no addition can be made in the assessment order passed u/s 153A of the Act on the basis of material seized during the course of search of a different party." 4. In ITA No. 1643/Del/2021, following grounds have been raised by the assessee: "1. That on the facts and circumstances of the case and in law the order passed by CIT (A) -24, New Delhi is contrary to facts and bad in law. 2. That on the facts and circumstances of the case and in law the CIT (A) was not justified in upholding the action of the Assessing Officer in treating the Ledger Account titled " AP" appearing in "Hazir Johri" software which was seized during the course of search action on a different party namely M/s Jindal Bullion Ltd. as belonging to the appellant and making an addition on the basis of such material in the hands of the appellant in assessment order passed u/s 153A of the Act. 2.1 That the CIT (A) erred in upholding the action of the Assessing Officer in making addition based upon material seized from the premises of a third party b....
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....ustified in confirming the addition of Rs. 2,89,383/- u/s 69 by holding that the appellant had made some unexplained investment in stock of Silver, only on the basis of a rough jotting seized as Annexure A-1, party JO-7. 8. That on the facts and circumstances of the case and in law, the CIT (A) was not Justified in confirming the addition of Rs. 54,80,828/- by inferring seized document Annexure A-2, page-4 as a trial balance disclosing profit earned by the appellant from dabba transactions. 9. That on the facts and circumstances of the case and in law, the ld. CIT(A) was not justified in confirming the addition of Rs. 1,50,000/- by holding cash and jewellery amounting to Rs. 36,66,5 98/- seized during the course of search action as unexplained. 10. That on the facts and circumstances of the case and in law, the ld. CIT(A) was not justified in confirming the addition of Rs. 44,870/- u/s 69A by holding the 1055.400 gms of silver found during the course of search action as unexplained investment." 5. In ITA No. 156/Del/2022, following grounds have been raised by the Revenue: "1. Ld. CIT(A) had erred in accepting request of assessee for allow 8,40....
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....Ld. CIT(A) had erred in accepting request of assessee for allow benefit of peak credit as assessee never accepted that entries belongs to him during assessment proceedings and appellate proceedings. 2. Ld. CIT(A) had erred in allowing peak credit to assessee as it is a settled legal position that peak credit is not applicable where depo sits remain unexplained under section 68. "In the case of CIT(A) Vs. D. K. Garg [2017] 84 taxmann.com 257 (Delhi), HC held that peak credit is not applicable where depo sits remain unexplained u/s 68 of the Act". As in present case, entries remained unexplained and additions were made u/s 68 if the Act, benefit of peak credit should not be allowed to assessee. 3. Ld. CIT(A) had erred in allowing peak credit to assessee as the principle of peak credit is not applicable in the cases of where deposits remain unexplained during the assessment proceedings. For adjudicating upon plea of peak credit factual foundation has to be laid by assessee, who has to own all cash credit entries in books of accounts and only thereafter question of peak credit can be raised. In this case, assessee never accepted that credit entries belongs to him. Ass....
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....e to create parallel books of accounts of JBL apart from those maintained in Tally Software. The Assessing Officer held that on analysis of the said data showed that JBL had been systematically engaged in cash transactions with a number of entities, mostly bullion traders and jewellers. The JBL books of accounts as maintained in the Hazir Johri software, contained both cash transactions of JBL as well as its transactions through banking channels. The transactions through banking channels are reflected in the Tally books of accounts of JBL whereas the cash transactions are not reflected in the same. The Assessing Officer held that comparison of the two accounts data viz . the one maintained in Johri-Hazir software and the one maintained in Tally software, reveals a number of discrepancies between the two sets of accounting data pertaining to JBL. It was held that most of the ledger accounts maintained in Hazir are in code names and a relation was established between the ledger account of the actual entity which was found in the tally accounts and the ledger account of the same entity as per Hazir-Johri accounts. The identification of the said Hazir accounts has been done on the basi....
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....ssment Order from page no. 4 to 9 wherein the name of the assessee has been referred at question no. 21 of the statement. Further, Ms. Ekta Soni, the Executive Assistant in JBL stated and her statement that the loose sheets contain details of cash, gold and silver intake and outgo from JBL and she has been witness to such cash transactions. 12. In this background, the pages pertaining to assessee has been examined in the Hazir Johri software. The narration recorded in the software is as under: 13. The AO has totaled up the entire credits in the said account for the year amounting to Rs. 1,72,92,950/- and treated the same u/s 69 of the Income Tax Act, 1961. The reasons given by the AO are as under: • Statement of Sh. Parul Ahluwalia and Ms. Ekta Soni who confessed about the cash transactions. • Name of the assessee appearing on the account as M/s Priyanka Jewellers and as AP. • From the said data, a summary of daily cash transactions or cash book of Jindal Bullion limited from 01.02.2015 to 28.08.2016 and further from 28.08.2016 to 05.11.2016 were available. The said summary or cash book contained chronological record of daily cash receiv....
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....stments to Rs. 11 ,70,000/- against the addition of Rs. 1,72,92,951/-. 18. The similar issue is involved for A.Y. 2016-17 and A.Y. 2017-18. The assessee filed appeal before the Tribunal for the addition confirmed after determination of peak credit. For the A.Y. 2015-16, the revenue has not filed appeal. The revenue has also filed appeal for A.Y. 2016-17 and A.Y. 2017-18 against the decision of the ld. CIT(A) for determining and allowing the peak credit concept. Thus, the appeals of both the parties vis-à- vis the additions made on account of Hazir Johri software account are intertwined. 19. Before us, the ld. AR argued reiterating the submissions made before the authorities be low. The submissions of the ld. AR as placed before the AO are as under: "During the course of the search and survey at premises of the M/s Jindal Bullion Ltd., the search team found that the M/s Jindal Bullion Ltd. maintaining their accounts in software called 'Hazir Johri' for purchase / sale transaction and cash transactions by M/s Jindal Bullion Ltd. In which the investigation team found two ledgers named 'AP' and M/s Priyanka Jewellers. It has been alleged that both of t....
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....e which you have required the assessee to furnish clarification/ justification by 14.12.2018. In connection with the same, on behalf of and under instructions from our subject client the point-wise reply to above referred show-cause notice is discussed in subsequent paragraphs. 1. It has been stated in the SCN that during the course of search action on Jindal Bullion Lad, annexure A22 and A25 were seized which contained books of accounts. It is further stated in the SCN that the ledger account maintained in the name of AP in the Hazir accounts maintained by JBL is sufficient evidence that it be longs to the assessee Sh. Anoop Soni since the banking entries in the said ledger account match with the transaction in bank account of the assessee. There after, the total summation of credit entries for FY 2016-17, 2015-16 & 2014-15 has been tabulated and the assessee has been finally show-caused as to why the amount of Rs. 2,47,95,486/-, Rs. 9,32,78,397/- and Rs. 1,72,92,951/- may not be treated as unexplained investment in Jindal Bullion Ltd. for AY 2017-18, 2016-17 & 2015-16 respectively. 2 With regard to the above issue, it is submitted that upon close examination of ....
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....to the assessee, even then the entire credit summation cannot be added and it is only the peak which can be added. This is a settled proposition of law. 7. It may also be highlighted that several transactions in the ledger account are through banking channel. Under such circumstances, it is not understandable as to how these transactions can be treated as unexplained. To illustrate for transaction dated 26.10.2015, cash paid is debited by Rs. 20,00,000/- and M/s Surasti Overseas Pvt. Ltd. has been credited by Rs. 20,00,000/-. The narration states 'Axis Bank 9130200524704'. It is not understandable as to how this transaction can be treated as unexplained and outside books of accounts. In view of the above, it is submitted that no addition is warranted on the basis of above referred ledger account." 20. On the other hand, the ld. DR relied on the order of the Assessing Officer. 21. Heard the arguments of both the parties and peruse d the material available on record. 22. We have examined the Assessment Orders, submissions of the assessee, paper book and the order of the ld. CIT(A) containing 111 pages, containing 95 pages of the submissions of the assessee on variou....
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.... of analysis of Hazir Johri Software, the narration recorded in the account AP has been reproduced on page 11 to 16 of the assessment order. An examination of the same would reveal that the said ledger account nowhere shows any sale/purchase of gold/silver. Thus, the transactions reflected in the said account are not in the nature of description furnished during the course of search of JBL. With regard to the cross examination, the ld. CIT(A) held that no details have been filed during appeal proceedings to show that the assessee requested for cross-examination at assessment stage. The ld. CIT(A) held that the assessee was ex-director of JBL and the seized material was found from employees of JBL itself. In these circumstances, the witnesses were employees of the same company and cross-examination was not essential. We find that during the assessment proceedings vide reply dated 09.12.2018 the Assessing Officer was specifically requested to provide any evidence/statement on oath on the basis of which the transactions were being treated as related to the assessee (Page 18 of AO). Further, vide letter dated 14.1 2.2018 it was submitted that the assessee has not been provided copy of ....
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....walia and Kushagra Tandon. She also made a generalized statement that the loose sheets contained detail of gold/ silver and cash in and out. Notably, nowhere it has been stated by her that AP stands for Sh. Anoop Soni. Hence, the reliance on the statement of Ms. Ms. Ekta Soni by the ld. CIT(A) cannot be accepted. Further, we find that the amounts written against M/s Priyanka Jewellers have all been reflected duly in the books of M/s Priyanka Jewellers and hence it can be said that no unaccounted income can be brought to tax. 30. The banking transactions pertaining to other entities such as Aarthav Gems & Jewels Pvt. Ltd., Surasti Overseas Pvt. Ltd., M/s Saumya Bullion & Jewellers were also recorded in the account AP whereas it had nothing to do with the assessee. In the Remand Report dated 02.08.2021 the Assessing Officer verified all these banking transactions and accepted the contentions of the assessee. In other words, it was verified by the Assessing Officer that some of the banking transactions recorded in the account AP pertain to other entities and not the assessee. Only 23% of the total banking transactions pertain to assessee and remaining 77% are between JBL and other ....
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....of gold @ 2575 per gms (rate as on 02.12.2016). The ld. CIT(A) confirmed the addition on the grounds that the out gold is logically gold sold. 34. Before us, it was argued that notwithstanding anything, if the gold is considered to be sold, the same ought to have been purchased by the assessee. Hence, only the profit needs to be taxed. The argument of the ld. AR is in tune with the regular business practice. Hence, the AO is directed to compute 2% on the said sale of gold. Addition of Rs. 6,72,900/- u/s 69: 35. The AO made addition of Rs. 51,50,000/- based on the same page as discussed above. The ld. CIT(A) determined amount of unaccounted receipts also and accorded benefit of unaccounted receipts of Rs. 44,77,000/-. Hence, we decline to interfere with the order of the ld. CIT(A). Addition of Rs. 10,64,700/- u/s 69: 36. The AO made addition on account of 2 kg of gold mentioned at impounded page no. 28 discussed above. Before us, it was argued that notwithstanding anything, if the gold is considered to be sold, the same ought to have been purchased by the assessee. Hence, only the profit needs to be taxed. The argument of the ld. AR is in tune with the regular busines....
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....mises of the appellant. In view of provisions of section 132 (4 A) and 292 C of Income Tax Act, the contents of the seized papers are presumed to be true. The argument of the appellant that they do not belong to him cannot be accepted. The onus is upon the appellant to prove to whom these seized papers belonged to. In the absence of any logical explanation, the only inference which can be drawn is that these papers belonged to the appellant and " Self Account' refers to account of the appellant as on 03.01.2017 in carrying out ' Dabba' trading on MCX. 40. Before us, the ld. AR argued that, a. the examination of the trial balance would reveal that it is a single page print out which is a trial balance as on 03.01.2017 of multiple accounts which are named in the first column. b. simple examination of the seized document would reveal that the various transactions in the form of future and options in gold, silver, crude oil have been mentioned. c. the names of various individuals/entities are not discernible. d. there is no title at the top of the trial balance, therefore, it is not clear that the said trial balance belongs to which indivi....
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....s 680000 Cash 20-Feb-15 Priyanka Jewellers 570000 Ap E 20-Feb-15 Ap 570000 Priyanka 21-Feb-15 18-Mar-15 27-Mar-15 Ap 27-Mar-15 Ap 2222 Ap -1250000 BANK J 50m e Ap 1000000 Cash 100000 Cash 6500000 BANK 27-Mar-15 Priyanka Jewellers -5432136 BANK в 30-Mar-15 Ap 567864 Cash 30-Mar-15 Ap 6012136 Cash 30-Mar-15 Priyanka Jewellers 5432136 Cash 31-Mar-15 Priyanka Jewellers 5402 Cash 31-Mar-15 Priyanka Jewellers 10 370000 31-Mar-15 Priyanka Jewellers 10.146 375402 Total credit for F.Y. 2014-15 17292951 17-Apr-15 Ap 300000 Cash 2-May-15 Ap 579980 JD 8-May-15 Ap 1243350 JD 15-May-15 Ap 1858043.28 JD 26-May-15 Ap 30-May-15 Ap 1139052 KCX 175033 JD 6-Jun-15 Ap 1416282 JD 8-Jun-15 Ap 8-Jun-15 AP 2.353 20 0 13-Jun-15 Ap 25169 JD 20-Jun-15 Ap 622117 JD 27-Jun-15 Ap 1781663 JD 2-Jul-15 AP 35770 Cash 2-Jul-15 Ap 986.3 ° 2-Jul-15 Ap 35770 13.7 2-J....
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.... 0.905 5-Dec-15 Ap 13320820 JD 5-Dec-15 Ap 3601815 JD 5-Dec-15 Ap 811963 JD 5-Dec-15 Ap 500000 Profit 5-Dec-15 Ap 477.08 Profit 9-Dec-15 Ap 1000000 NSP 12-Dec-15 Ap 500000 ΟΙΚΙ 12-Dec-15 ÐÑ€ 3562664 JD 16-Dec-15 ÐÑ€ 1000000 Priyank 26-Dec-15 Ap 381299 JD 11-Jan-16 Ap 512347.75 Oppo 11-Jan-16 Ap 588281 JD 18-Jan-16 Ap 545048 JD 20-Jan-16 ÐÑ€ 5000000 BANK 21-Jan-16 Ap 2000 5340000 1-Feb-16 Ap 13784 JD 5-Feb-16 Ap 1018904 JD 5-Feb-16 Ap 1000000 kls(jhs) 5-Feb-16 Ap 136013 Priyank 5-Feb-16 Ap 3653 Profit 6-Feb-16 Ap 2500000 Cash 8-Feb-16 Ap 1200000 Setia 9-Feb-16 Ap 1300000 Setia 11-Feb-16 Ap 1000000 kls(jhs) 15-Feb-16 Ap 7000 0 16-Feb-16 Ap 1000 0 17-Feb-16 ÐÑ€ 8000 Ty 18-Feb-16 Ap 87333 Cash Document 4 20-Feb-16 Ap 3853881 JD 26-Feb-16 Ap 3000 0 26-Feb-16 Ap 8730000 BANK 29-Feb-16 Ap 8730000 3000 29-Feb-16 Ap 409089 JD 1-Mar-1....