The Income Tax Appellate Tribunal (ITAT) Delhi bench deleted additions made under Section 69 of the Income Tax Act, 1961 without detecting material to establish undisclosed transactions involving the sale /purchase of gold in cash outside books of accounts. There was no documentary evidence or material found by the lower authority to substantiate the transaction in the ledger account as pertaining to the assessee.
When a search & seizure action was carried out on Jindal Bullion Ltd. Group o f cases on 05.01 .2017. A warrant of authorization under Section 132 of Income Tax Act was issued in the name of assessee Anoop Kumar Soni.
During the search data pertaining to the F.Y. 2014- 15, 2015-16, and 2016-17 in the form o f digital data and loose sheets were seized. Digital data was maintained in a software named “Hazir Johri” at the residential cum business premises of Kusharg Jindal promoter and Director of JBL.
The Assessing Officer held that on analysis of the above two sets of evidences it was found that the transactions detailed in the loose sheets have been fed into “Hazir Johri” software to create parallel books of accounts of JBL apart from those maintained in Tally Software.
After examining the Hazir Johri software AO 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.
Aggrieved by the order, the assessee filed an appeal before the commissioner of Income Tax Appeal(CIT(A). Who upheld the addition .Thereafte the assessee filed second appeal before the tribunal.
Counsel for the assessee submitted that the entries which are reported in the ledgers do not belong to the captioned assessee. It was added that, all transactions are carried out by the assessee through his bank account.
Further The assessee has a business dealing with the M/s Jindal Bullion Ltd of sale or purchase of gold, silver and other ornaments. Therefore, the above mentioned entries appear In the books of the assessee.
There is no documentary evidence or material found by the lower authority to substantiate the transaction in the said ledger account as pertaining to the assessee.
Further, the assessee has not provided results of any inquiry conducted by the department from M/s Jindal Bullion Ltd. regarding the contents of the ledger account.
Moreover it was observed that several transactions in the ledger account are through a banking channel thus these transactions could not be treated as unexplained.
Counsel for the revenue supported the decision of the lower authorities.
It was observed by the tribunal that the assessee i was not the director of the JBL at the time of search. It is also an accepted position that he was neither theshareholder nor promoter of JBL and therefore it could not be said that the witnesses namely Shri Parul Ahluwalia whose statement is being relied upon and Shri Anoop Soni were employees of the same company.
The entire addition by treating the account AP as belonging to Anoop Soni has been made on the basis of presumption drawn and the statement of Shri Parul Ahluwalia.
However, the statement of the assessee has not been recorded on this issue either at the time of search, post search inquiries or even during the assessment proceedings.
After considering the facts and circumstances of the case and also explanation of the assessee, the two member bench of Saktijit Dey (Vice President)and Dr. B. R. R. Kumar (Accountant Member) deleted the addition made by the assessing officer because the lower authority did not detect any material to establish undisclosed transactions involving sale/purchase of gold in cash outside books of accounts.
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