TaxTMI 
TaxTMI 
2026 (5) TMI 852
X X X X Extracts X X X X
X X X X Extracts X X X X
....esenting suppressed values from under-invoicing, facilitated off-book transactions and allowed J.M. Jain to earn unrecorded commission and interest income, received in cash. To mask identities, "Foreign entity" or "Foreign Name" aliases were used on the JSK Server (e.g., Shri Jeewan Kukreja was "ROSHAN"). The scheme involved generating "pakka" (taxable, suppressed value) invoices and "kachcha" (actual, higher value) slips, with the difference paid in unaccounted cash. Group employees, under partners Shri Jeetmal Jain and Shri Jai Choraria's direction, managed these covert operations. The JSK Server data was extensively corroborated by employee admissions, seized documents, email analysis, bank statements, and the convergence of JSK and regular JMJ server data, confirming the group's systematic generation of out-of-book income. Shri Jeewan Kukreja, assessee was identified as a beneficiary of this illicit system. 3. The assessee is engaged in the business of wholesale and retail of garments running a proprietary concern in the name M/s. Utkal Mens Zone. The assessee had filed his return of income on 10/25/2022, declaring a total income of Rs. 15,35,607/-, which was process....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Jain LLP of Rs. 89,97,950/- are not true and are not correct. Considering the material evidence of unaccounted income stemming from transactions facilitated by the J.M. Jain Group's sophisticated parallel accounting system, the appellant being identified as a beneficiary within this system, under the 'preponderance of human probability' standard, the burden shifted to the appellant to provide a plausible and satisfactory explanation for these transactions, aligning with the principles laid down in Hon'ble Supreme Court judgments in Sumati Dayal (supra) and Durga Prasad More (supra). Given the evidence of a systematic scheme of tax evasion and the direct link to the assessee through the JSK server, it is held that the appellant has entered into an unaccounted transactions of Rs. 89,97,950/-. 7.1.9 However, the appellant made an alternate contention that even if the alleged unaccounted transactions of Rs. 89,97,950/- were to be considered proven, only the undisclosed profit element embedded in these transactions should be added to the income, not the entire transaction value. The appellant stated that their gross profit ratio for the year was 8.27% and thei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-Credit note -2,756,528 Net sales 75,935,608 Sales declared in the return of income The appellant in support of the same submitted all the relevant ledgers and GST return. 7.2.2 On perusal of the same it was found that the contention of the appellant seems to be correct. The A.O. in the assessment order has not considered these figures in a proper manner. Further, the A.O. noted that as per GST return sales was declared of Rs. 7,63,05,751/-. On perusal of the GST return it was found that observation of the A.O. is not correct, the appellant has declared Rs. 7,59,35,608 /- as "Supplies and advances on which tax is to be paid" which is the same as turnover declared in the ITR. Therefore, in view of these documents, the appellant has explained the difference in sales ledger and turnover declared in the ITR. No adverse inference can be drawn in this case. The A.O. is directed to delete the addition of Rs. 69,01,788/-." 5. At the time of hearing, the Ld. Counsel for the assessee brought to the notice of the Bench at Page 4 of the assessment order and submitted that as per the A.O's findings, there is SAP based JSK Server which was used for reco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....jasthan, Jodhpur Bench in the case of Micro Marbles Private Limited Vs. Office of the Income Tax Officer (2023) 475 ITR 569 (Raj.) has held and observed as follows: "31. Thus, in the light of the decisions of the Delhi and the Bombay High Courts, as referred to above, the non-supply of the material, especially the documents of entry in the books of M/s Sanmatri Gems Pvt. Ltd. and the statement of Deepak Jain recorded under Section 132 (4) of the Act, is sufficient to vitiate the proceedings. 32. It may be noted that the statement recorded under Section 132 (4) of the Act can be used in evidence for making the assessment only if such statement is made in context with other evidence, or material discovered during search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger the assessment. 33. In view of the aforesaid facts and circumstances, we are of the opinion that shorn of all other technical aspects which may have been raised before us, the very fact that the material referred to in the "reasons to believe" was not supplied to the petitioner, the e....