2024 (3) TMI 426

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....usiness of gold/bullion trading. For AY 2016-17 he filed his return on 07.12.2016 declaring income of Rs. 1,56,23,790/- which was accepted vide order of assessment dated 21.12.2019 passed under section 153C r.w.section 143(3) of the Act. Likewise, for AY 2017-18 he filed his return on 25.10.2017 declaring income of Rs. 3,84,76,300/- which was accepted vide assessment order dated 21.12.2019 under section 153C r.w. section 143(3) of the Act. 3.1 Search under section 132 of the Act was conducted on 05.01.2017 on M/s. Jindal Bullion Ltd. "JBL" Group of cases. Certain incriminating documents/information contained in the seized material pertained to the assessee, the proprietor of M/s. S.K. Impex. So the said material was handed over to the AO of the assessee for the purpose of further determination of his income in both the years. 3.2 Accordingly, notice under section 153C of the Act was issued on 10.06.2021 to the assessee for both the AYs. In response, the assessee filed return on 13.11.2021. Statutory notice(s) were issued and the assessee filed details on-line in compliance thereto. 3.3 It was found in search that M/s. JBL was maintaining a software called "Hajir Johri" in ....

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....against the principal of natural justice." 4. The above explanation was not acceptable to the Ld. AO. According to him the onus lay on the assessee to prove the source of impugned amount(s) paid by him to M/s. JBL in cash which the assessee failed to do. According to him the said amount(s) are expenses towards purchases of gold/bullion and treated the same as unexplained expenditure of the assessee in both the AY(s) and added under section 69C of the Act to the income of the assessee. He completed the assessment on total income of Rs. 1,67,69,140/- and Rs. 3,95,64,300/- for AY 2016-17 and AY 2017-18 on 28.12.2021 and 30.12.2021 respectively under section 153C r.w. section 143(3) of the Act. 5. Aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) in both the AY(s). The Ld. CIT(A) summarised the submission of the assessee in para 6.1 to 6.4 of his appellate orders. He recorded his observation and findings in para 6.5 of his appellate orders separately based on facts emerging from the details submitted and findings made by the Ld. AO as under:- "6.5 I have considered the facts and submission of the assessee. The following facts emerges from the det....

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....see to M/s JBL is treated as unexplained expenditure in the hands of the appellant. Accordingly, the addition of Rs. 11,45,348/- made by the AO is upheld and the ground nos. 3 & 4 of the appeal is dismissed." 5.1 Thus, the Ld. CIT(A) confirmed the impugned addition in both the years but in AY 2017-18 under section 69A of the Act and not under section 69C as done by the Ld. AO. 6. Dissatisfied, the assessee is in appeal before the Tribunal in both the AYs and common grounds relate thereto. 7. The Ld. AR submitted that the assessee did not enter into any cash transaction with M/s. JBL, the entity searched under section 132 of the Act. According to him, all transactions made by the assessee with M/s. JBL were through banking channel and has been found to be recorded in the books of the assessee. Apart from the ledger account in Hajir Johri which is not maintained by the assessee, the Ld. AO relied on the statement of Ms. Parul Ahluwalia, Director and former employee of M/s. JBL but in her statement she nowhere identified that the cash transactions related to the assessee and no specific questions were put to her in this regard. Since the Hajir Johri ledger account was neither....

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....ement was recorded. The Ld. AR submitted before us that Ms. Parul Ahluwalia nowhere in her statement identified that alleged cash transactions related to the assessee. No specific questions in this regard were asked from her. Nothing is forthcoming from the side of the Revenue to controvert the above pleadings of the assessee. 9.1 It was asserted by the assessee before the Ld. AO that the assessee was not even cross examined during search operation of M/s. JBL or during post search enquiry/investigation either by the Intelligence Wing or by the Ld. AO. The Revenue is silent on this aspect of the assessee's assertion. 9.2 It is observed that during the course of assessment proceedings the show cause notice dated 09.12.2021 issued to the assessee does not have any whisper about the statement of Ms. Parul Ahluwalia that her statement is being used adversely against the assessee. It is submitted by the Ld. AR that the assessee got the knowledge of such statement only on receipt of assessment order. If that is the scenario, the question of allowing the assessee an opportunity to cross-examine Ms. Parul Ahlulwalia does not arise. In fact this has not taken place. Therefore, we are ....