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TMI Blog2025 (3) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... see. There is no concrete material brought on record by the lower authorities to implead assessee with all those transactions. Even for the transactions where assessee's name was mentioned, the revenue was not able to bring any corroborative evidence to prove the nature of such transaction. Hence it could be safely concluded that the assessee had given a plausible explanation about the contents of the said software. Further more, as rightly pointed out by the Ld.AR, there is no corroboration of those entries with the bills / vouchers, sales, stock registers etc, showing the cash sales to prove that the alleged cash sales belong to the assessee firm. Hence those entries cannot be relied upon for making an addition in the hands of the assessee. As decided in the case of Anoop Kumar Soni [2023 (12) TMI 391 - ITAT DELHI]while adjudicating almost similar facts related to search on JBL, the Tribunal held that since the ledger found during the search "AP" contains the entries of parties other than assessee, then said ledger cannot be said to be belonging to assessee and addition made on the basis of assumption was deleted. Thus, no addition could be made in the hands of the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing opportunity for cross-examination of persons, whose statements have been relied upon by the AO/CIT(A), in spite of specific submission of the appellant. 5. On the facts and in the circumstances of the case Ld. CIT (A)/AO is erred in law and not justified in making additions of Rs. 86,54,585/- under section 69A of the Act on arbitrary basis without having any evidence, tangible and valid material on record. The additions have been made on surmises and conjectures and have no merit. Thus the said addition is liable to be quashed. 6. On the facts and circumstances of the case and in law, the CIT (A) erred in sustaining addition of Rs. 86,54,585/- made by AO under section 69A of the Act on the basis of alleged cash transactions on the basis of dumb documents, on arbitrary basis without having any evidence, tangible and valid material on record. 7. On the facts and circumstances of the case and in law, the CIT (A) erred in sustaining addition of Rs. 86,54,585/- made by AO under section 69A of the Act on the basis of alleged cash transactions without rejecting Books of Accounts of the appellant. 8. That on the facts and circumstances of the case and in law the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lery and silverware. It had filed its original return of income declaring total income of Rs. 45,17,630/-. A search and seizure operation was conducted u/s 132 of the Act on 05.01.2017 in the case of Jindal Bullion Ltd (JBL). During this search, digital data stored in software called "Hazir Johri" was seized from the residence of Mr. Kushagra Jindal, promoter of JBL. The said software purportedly contained parallel books maintained by JBL where both transactions through the banking channel and cash transactions were found recorded. While the transaction undertaken through banking channel were recorded in regular books of accounts maintained in tally software, however, certain cash transactions were not recorded in the regular books of accounts, which were alleged by the Ld. AO to be unaccounted. The Ld. AO observed that a statement of Ms. Parul Ahluwalia, Director and former employee of JBL, was recorded under Section 132(4) of the Act, wherein, she confirmed that both "pakka" (entries recorded in regular books of account) and "kaccha" (unaccounted) transactions undertaken by JBL were documented in the "Hazir Johri" software. 4. On perusal of seized data, among others, a ledger na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bullion with M/s Jindal Bullion Ltd in cheque and cash both. The cash transactions highlighted above have not been disclosed in the final accounts of the appellant. The appellant was in possession of undisclosed cash which was paid to M/s. Jindal Bullion Ltd. which is required to be brought under the ambit of tax. Similarly, the gross profit @2% on the total transaction is also required to be taxed as out of books profit earned by the appellant on the sale of this gold in the open market. These are the only two additions made by the Assessing Officer in the assessment order. The Assessing Officer carried out the analysis of cash paid to JBL and the cash received from the sale proceeds of gold in the open market. On the basis of analysis the peak of unexplained cash available with the Assessing Officer at any point of time during the assessment year, which was used for the purpose of business was Rs. 67,16,600/-. The Assessing Officer made the addition of peak of unexplained cash used by the appellant for payment to JBL amounting to Rs. 67,16,600/- as unexplained money u/s 69A. Further, gross profit @ 2% on thesegold sale transactions amounting to Rs. 19,37,985/- has been added as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hazir Johri software, it can be seen that it not only contains entries pertaining to assessee firm but some other parties as well namely "Rishab Trading Co.", Kls (JHS)" and "MT" etc. with whom assessee firm had no relation whatsoever. The Ld. AR submitted that this fact was acknowledged by the Ld. AO in page 9 of his order as under:- "Analysis of the accounts maintained by JBL on Hajir Johri in case of 'Sanmati (1586)' .............. .............. .............. .............. Further, not all the entries in the ledger pertains to M/s Sanmati Jewellers. Some of the entries pertains to other companies as well like M/s Rishab Trading Company as evident from the entries maintained in the ledger. These persons / entities are close associate of Sanmati Jewellers and he acted as a facilitator for sale/ purchase of gold / silver or getting accommodation entries from JBL. These entries are not considered I the case of Sanmati Jewellers and deemed to pertain to the respective persons / entities. 9. Still the additions were made by the Ld. AO providing an erroneous finding that Rishab Trading Co. was a close associate of assessee firm without bringing on record any evidence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entries of unrelated parties into one ledger, to state that it is trite law that no addition can be made on the basis of dumb documents, more so when no corroborative evidence of cash sales i.e., sales invoices/vouchers, stock register etc. were found during search. In support of this, the Ld AR placed reliance on the following decisions:- a) Hon'ble Jurisdictional High Court in the case of CIT v. D.K. Gupta reported in 308 ITR 230 (Del) b) Hon'ble Jurisdictional High Court in the case of CIT vs. Girish Chaudhary reported in 296 ITR 619 (Del) c) Co-ordinate Bench of Delhi Tribunal in the case of Ashwani Kumar vs. ITO reported in 39 ITD 183 d) Co-ordinate Bench of Indore Tribunal in the case of Saaras Agro Industries vs. ACIT reported in 197 ITD 567. 14. In so far as statements of Ms. Parul Ahluwalia and Ms. Ekta Soni (employee of JBL group) referred by the Ld. AO in the assessment order, the Ld. AR pointed out that even the Ld. AO also did not rely upon the said statements, while making the impugned additions in the assessment order. The Ld. AR pointed out that the Assessee had time and again sought for cross examination of relevant persons, of those, who had depose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed in December 2019, therefore, the satisfaction note drawn on 04.02.2021 after a delay of more than 13 months was inordinately late rendering the proceedings initiated under section 153C to be barred by limitation. In this connection, he drew our attention to the CBDT circular No. 24 of 2015 dated 31.12.2015 issued after considering the decision of Hon"ble Apex Court in the case of Calcutta Knitwears [Civil Appeal No.3958 of 2014 dated 12.03.2014], wherein it was opined that the satisfaction recorded by the AO of the searched person is sine-qua-non and must be handed over to the AO of the other person (other than searched person) at any of the following stages:- a. At the time of initiation of assessment proceedings on the searched person; or b. During the course of assessment proceedings in the case of searched person; or c. Immediately after the assessment proceedings are completed in the case of searched person. 18. Reliance were placed on following decisions where the assessment proceedings under section 153C of the Act were annulled due to delay in recording of satisfaction note by the AO of the searched person:- a) Hon'ble Jurisdictional High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions other than banking transactions as undisclosed transactions of the Assessee and making corresponding addition on that account. 21. The Ld. DR also referred to the affidavit filed by the partner of the Assessee firm where he had admitted having introduced a third person Sh. Subodh Kumar Jain to enter into transactions with JBL and had also admitted to have given guarantee on his behalf. Thus, relation of Assessee with third parties whose name was recorded in the seized ledger cannot be ruled out. 22. With regard to the Additional Ground No.2 raised by the assessee, the Ld. DR rebutting the delay of 13 months in recording the satisfaction note dated 04.02.2021 submitted that the assessment in the case of JBL (searched person) was completed in the month of December 2019 and the delay in recording the satisfaction note was due to lockdown imposed by the Central Government due to nationwide outbreak of Covid 19. The officers of the department were not working at that time out of fear of they catching up with the virus. Ld. DR also argued that at the time of search on JBL, the PAN of the Assessee was with Circle 47(1), Delhi and the centralization of PAN/Jurisdiction of the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re contra entry did not reflect the alleged transaction of undisclosed purchases, pointing out to inaccuracy in maintaining the said ledger, thereby rendering it to be a dumb document. 25. As regards, the reference made by Ld. DR to affidavit filed by the partner of the Assessee firm, introducing a broker namely sh. Subodh Kumar Jain, the same was not going against but supporting the case of the assessee, corroborating that, the JBL may have recorded transactions of independent third parties having direct or indirect relation with the assessee by way of introduction or otherwise, in the seized ledger maintained in the name of the Assessee, which further got corroborated with the presence of banking and other transactions of third parties in the aforementioned seized ledger, elaborated in his arguments earlier. 26. Further, rebutting to the argument of the Covid Lockdown it was argued that the Ld. AO of the searched person and the Assessee were same then the delay of 13 months in recording the satisfaction note dated 04.02.2021 after the conclusion of assessment proceedings in the case of searched person (which got completed in December 2019) is beyond the phrase "immediately" use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lected in the said Hazir Johri Software by clearly stating that the entries found thereon contains transactions of various other unrelated parties with the assessee and that since assessee has introduced Shri Subodh Kumar Jain (Broker) to JBL, Ekta Soni (Executive Assistant of JBL) had recorded all the transactions against assessee's name. Admittedly, the entries reflected in the said software pertains to other unrelated parties with the assessee. Admittedly, the said ledger is a combined ledger account of various transactions pertaining to other unrelated parties with the assessee and contains few transactions pertaining to the assessee. However, there is no concrete material brought on record by the lower authorities to implead assessee with all those transactions. Even for the transactions where assessee's name was mentioned, the revenue was not able to bring any corroborative evidence to prove the nature of such transaction. Hence it could be safely concluded that the assessee had given a plausible explanation about the contents of the said software. Further more, as rightly pointed out by the Ld.AR, there is no corroboration of those entries with the bills / vouchers, sales, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue either at the time of search, post search inquiries or even during the assessment proceedings. A careful examination of the account AP as reproduced in the assessment order would reveal that in the remarks column various acronyms have been used against different transactions such as JD, KCX, RBG Overseas, KMTY, Oven AJ, JBL Coins, Oppo Mobile, Satia, Ishaan, Anshul, Vinod 8676, Guddu etc. These abbreviations show that the transaction recorded is neither through bank nor cash because since specific acronyms have been used, these transactions cannot be inferred to be pertaining to the assessee even if it is presumed with account AP belongs to the assessee. 32. Hence, keeping in view, the entire factual matrix of the case, we hold that no addition is warranted in the case of the assessee. In the result, the peak credit theory set out by the ld. CIT(A) would also become infructuous. The appeals of the assessee on this ground are allowed and accordingly the appeals of the revenue are liable to be dismissed." 29. Similar view was taken by this Tribunal in the case of Surender Kumar Jain in ITA No. 1314/Del/2023 dated 07.03.2024 arising out of search in the JBL, wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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