The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) held that no addition should be made on account of sale of gold when it is reflected under the head sale in regular books.
The assessee Vaibhav Jain one o f the directors of M/s Jindal Bullion Ltd. ( JBL ). It was noted by the AO that during the course of search action on JBL Group on 05.01.2017 , large quantum of incriminating data pertaining to the FYs 2014- 15, 2015-16 and 2016-17, in the form of digital data and loose sheets, was seized.
While concluding the assessment order of the assessee the AO two sets o f accounts have been prepared one in Hazir Johri software and another in Tally software. Hazir Johri software was nothing but a parallel set of accounts prepared in regular course o f business of JBL Group.Assessee maintained the Hazir Johri software.
Further AO also analyzed in detail the explanation furnished by the appellant with regard to the entries found recorded in Hazir Johri ledger accounts o f appellant namely ‘Vaibhav ji’ and ‘Vaibhav ji Capital’. On the basis o f the detailed analysis, the AO came to the conclusion that a sum of Rs.95 ,64,815/- is unexplained investment made by the appellant in gold and investment in M/s. JBL . Accordingly, the AO made an addition of Rs .95,64 ,815/- under Section 69 r .w .s. 115BBE of the Income Tax Act.
Aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the addition made by the AO. Thus the assessee filed another appeal before the tribunal.
During the appeal proceedings before the tribunal counsel for the assessee, Mayank Patawari, argued that Hazir Johri software has been found with Sh. Kusharg Jinda who is the other director of JBL Group. The assessee was not aware of any such records maintained by Kusharg Jindal.
Further the assessee counsel argued that further argued that if any record is maintained by another director without the knowledge and without consent and without any information of other director , namely assessee here, the assessee cannot be held responsible and accountable for the same in the absence of cross-examination being allowed to him.
Sapna Bhatia, the Department representative, relied on the order of the CIT(A) and the order o f the Assessing Officer .
The tribunal after considering the submission of both parties observed that The assessee explained about the entries that they belonged to the sale of gold in cash and duly accounted in the cash book and in the sales register of JBL.
The amounts are reflected on 09.05 .2016 of Rs.6 ,01,420/- and shown on the same day under the head “sale” of Rs.2 ,99,960/- and Rs .3 ,01,459/-. Similarly, the amount of Rs.3 ,01,620/- on account of cash on 10.05.2016 has been reflected in the books of JBL on the same date of an amount of Rs.3 ,00,967/- and Rs.652/- on account of labour charges. Thus the amount of Rs.3 ,01,620/- has been found to be reflected under the head “sale” in the regular books of JBL.
Therefore the two-member bench Of Dr. B. R. R. Kumar, ( Accountant member ) and Yogesh Kumar US, ( Judicial Member ) held that no addition should be made on account of sale of gold when it is reflected under the head sale in regular books.
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