TaxTMI 
TaxTMI 
2025 (6) TMI 1999
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....) 2018-19, have been taken into consideration for deciding the above appeals en masse. 3. The Grounds of appeal raised by the Revenue, in lead case in ITA No: 248/Rjt/2022, for assessment year (AY) 2018-19 are as follows: 1. On the facts and on the circumstances of the case and in law, Ld. CIT(A) erred in considering the facts of the case, and ignoring that, the addition of Rs. 10,01,45,000/- were made on the basis of unexplained sales found from EmmEss- Gold software maintained by V.K. Group during the course of survey action carried out by the investigation wing. [Note: For A.Y. 2019-20, in ITA No.249/RJT/2022 the addition is at Rs. 2,62,10,100/-] 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in ignoring the facts that during the course of search, digital data were found & seized having record of whole accounted as well unaccounted transaction. i.e., Gold purchase/ sale & in/out of Gold bar in the digital form, on which the assessing officer has relied upon. 3. assessing officer on the facts and in the circumstances of the case and in law, has duly investigated and applied his mind on the report of the DDIT, Invest....
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....g and trading of gold jewellery, trading in gold/silver bullion. Further, notice u/s 143(2) was issued on 23/03/2021. 5. The assessing officer observed that during the course of search proceeding, the incriminating material, in the form of digital data and certain loose papers were found and seized. After analysing the seized data, the assessing officer noticed certain discrepancies which were mentioned by the assessing officer in following chart: Annexure No. Page No./ Paragraph No. Unaccounted sales Unaccounted purchase Cash Receipts / gold bullion receipt A.Y. A-5 5 - - 2135540 2020-21 6 3499190 - - 2020-21 7 - - 147940 2020-21 8,9 & 10 - 1235197 - 2020-21 11 - - 30002 2020-21 12 & 13 - 740506 - 2020-21 14 - 59951 - 2020-21 Digital Data i.e. from the Mobile 1 plus 3 found from the assessee Sh. Chetan N Sangani 3.3 (Page 1) 3734599 - - 3.3 (Page 3) 787640 3.3 (Page 4) 1186000 2017-18 ....
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.... taxed, and only the Net Profit Component is liable to be taxed. Therefore, at the max, (though not admitted), in any contingent event, only the net profit as have been consistently reflected in regularly maintained books of accounts, should be considered for arriving at income component. Also, it is prayed to consider, alternatively, that the details found from the premises of V K Group, do not fall within purview of sec. 132(4A), as whatever was found, was not in during the "course of search", and accordingly the presumption u/s. 132(4A) is not applicable. c. Regarding the allegation of unaccounted/unexplained purchases in consequence of Transaction with VK Group. Though there is no mention in the summarized table given in the SCN, but there is a mention of disallowance u/s 40A(3) on Pg. 34 towards consequential purchases. In this behalf it is submitted that: i. No Documentary evidence of unaccounted purchase are found from our premises. On the contrary, a shortage of stock as compared to book stock, is found. Had there been a case of any unaccounted purchases, then unaccounted i.e., excess stock, ought to have been found. ii. No Documentary ev....
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.... There is no material to support such finding of assessing officer Dumb document. Addition deleted." * Hon'ble Gujarat High Court in the case of CIT Vs. Maulikkumar K. Shah 307 ITR 137 held that "Held, dismissing the appeal, that from the beginning the assessee was stating that the notings appearing in the diary were rough estimates and estimation was made for submission to the bank for obtaining a loan from the bank. The inference of the Assessing Officer that the assessee had received on money. i.e., the differential amount as shown in the seized diary and the books of account, was merely based on suspicion and surmises and there was no material to support the conclusion of the Assessing Officer that the assessee had in fact received any on money. The Assessing Officer had no evidence with him to support his conclusion. The assessee had worked out the floor-wise rate of the shop on the seized paper but it was not possible that every shop could be sold at that price and while selling the shops, many purchasers may pay advance money. Therefore, the rates of all the shops at the time of actual sales could not be the same as estimated in the seized paper. The amount ment....
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....up had been found, which revealed that the V.K. Group had purchased unaccounted gold bullion from Chetan Art Jewellers, during FY 2017-18 and 2018-19. Therefore, the data found from V. K. Group, clearly establishes that assessee had unaccounted transaction with VK Group. The assessing officer also noticed that assessee himself admitted such unaccounted sale by requesting to estimate the profit on such unaccounted transactions adopting GP/NP ratio of average of last three years, therefore the above discussed transaction is assesses unaccounted transactions. Annexure No. Page No./ Paragraph No Unaccounted sales AY Unexplained sales as found from EmmEss software maintained by VK group Para-5 10,01,45,000 2020-21 Total 10,01,45,000 In view of the above discussion Rs. 10,01,45,000/- was added to the total income of the assessee u/s 69 of the Act, on account of investment in purchase of Gold from undisclosed source. 9. Aggrieved by the order of the assessing officer, the assessee, carried the matter, in appeal, before the Ld. CIT(A), who has allowed the appeal of the assessee, observing as follows: "6.1 I have perused the a....
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....essee, the assessing officer had made the addition on the basis of interpretation that the entries written as '1' in the EmmEss-Gold software found from the premises of V. K. Group during survey in their case represented purchase of 1 Kg gold by entities of VK Group from the assessee. On this basis, the addition of unaccounted sales by the assessee to the entities of V K Group was worked out and the addition thereof was made. However the same assessing officer while framing the assessment order in case of entities of V. K. Group subsequently, examined the said software and found that the entries written as '1' in the said software only reflected inward voucher type and it did not reflect purchase of 1 Kg of gold. It was also observed by the assessing officer that in the said software there was one more module and when such module is entered the weight of gold purchase alongwith name of party was duly mentioned. These particulars were matched with the books of accounts and they were found to be matching. The assessee has also submitted the copy of account of entities of V K Group from his books and contra accounts from the books of entities of V K Group. These accoun....
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....the business of trading in gold and silver bullion under his proprietary namely M/s. Chetan Art Jewellers. The assessee filed his original return of income u/s. 139 of the Act for A. Y. 2018-19, on 31.10.2018, declaring the total income at Rs. 29,38,430/-. There was a survey u/s 133A of the Act, carried out at the business premises of the assessee on 16.01.2020, during the course of which several loose papers and excess cash of Rs. 39,20,760/- were found. Therefore, the survey action was converted in search u/s 132 of the Act, vide warrant of authorization dated 18.01.2020. Accordingly, the assessment proceedings were initiated u/s 153A for A.Ys. 2014-15 to 2019-20 and u/s. 143(3) for A. Y. 2020-21. In response to the notice u/s 153A of the Act, the assessee filed his return of income for A. Y. 2018-19 on 02.03.2021, declaring total income at Rs. 26,49,610/-. Simultaneously, there was a survey u/s. 133A of the Act, carried out on 16.01.2020, in case of one V. K. Group during the course of which certain digital data from, the software 'EmmEss-Gold" was extracted and impounded by the Income Tax Department. The relevant digital data contained the details of gold purchase with all the ....
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....oods received from the assessee and that the said transactions were recorded in their books of accounts. 15. Accordingly, the assessee inquired about the matter with the V. K. Group and it is given to understand that the successor A.O., while framing the assessment in case of entities of V. K. Group, examined the 'EmmEss-Gold' software in depth and thereafter, accepted the submission of the V. K. Group that the entries written as '1'/'2' in the 'EmmEss-Gold' software represented inward entries only and the same did not represent any quantity. Thus, when no addition was made on account of unaccounted purchases in case of V. K. Group who is the author of alleged incriminating material in digital form, there remains no basis whatsoever to sustain any addition on account of alleged unaccounted sales in the hands of the assessee, more particularly, when no incriminating material was found during the search in case of the assessee. Based on these facts and circumstances, we dismiss the appeal of the revenue. 16. In the result, Revenue's appeal ITA No.248/RJT/2022 is dismissed. 17. Since the facts and circumstances in the case of ITA No.249/RJT/202....