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TMI Blog2025 (3) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... riance in figures. 3. The assessee has raised the following original grounds of appeal before us:- "1. On the facts and circumstances of the case, the order passed by the Ld. AO and impugned order passed by the CIT (A) is bad both in the eye of law and on facts. 2. In absence of providing of satisfaction note, if any, recorded by the regular AO of the appellant (ITO, Ward-1, Hisar) initiation of proceedings u/s 153C, in the facts and circumstances of the case, are not valid and, therefore, the assessment basing on such invalid proceedings deserved to be cancelled and CIT (Appeals) has erred in upholding the validity of the proceedings u/s 153C. 3. On the facts and circumstances of the case, the Ld. CIT(A) has not appreciated the contention of the appellant that upon the facts and circumstances of the case and without application of mind, absence of cogent material, without conducting any independent enquires arriving at the prima facie conclusion that books of account or document or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year and years referred to in sec. 153A(1) as the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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" and "kaccha" transactions undertaken by JBL were documented in the "Hazir Johri" software. 5. On perusal of seized data, among others, the ledger account found with code 'Pankaj kb' allegedly pertaining to assessee was found. In the said ledger, the transactions made in cash as well as through banking channel were found recorded. The AO of the searched person recorded his satisfaction note on 24.09.2020, that the said ledger account pertain to the assessee and has bearing on computation of total income of the assessee. Accordingly, notice under section 153C of the Act stood issued to the assessee on 23.10.2020. In response to the said notice, the assessee filed his return of income on 13.12.2021 declaring total income of Rs 17,37,170/-. On 14.12.2021 and 18.12.2021, the assessee requested for Xerox copies of the seized d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn against the assessee on the basis of seized material found in the search of third party, when no corroborative evidence in related to such transactions was found implicating the assessee. 8. The Ld. AR also pointed out that from the perusal of the seized ledger named "Pankaj kb" of Hazir Johri software, it can be seen that it not only contains entries pertaining to assessee but some other parties as well with whom assessee had no relation whatsoever. The Ld. AR also drew our attention to the seized ledger in which against the bank payments, name of the respective party i.e., Assessee or other parties were mentioned. However, against the alleged cash payment, no names are mentioned. Therefore, even if one believes that the cash payment to be true it cannot be said how much cash is attributable to which party. This pattern of recording the entries raises a serious concern whether while making the entries, the accountant of JBL have posted the cash entries in the wrong ledgers or deliberately, the cash entries were posted in the ledgers of genuine parties, like Assessee, for concealing the identity of the actual cash buyers and to reflect the correct profitability. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts) as well as unaccounted cash entries were recorded in the Hajir Johri software. The said statements were never retracted by the said persons. 12. The Ld. AR in his rebuttal to the arguments advanced by the Ld. DR vehemently submitted that seized ledger "Pankaj kb" is a combined ledger account wherein transactions of various unrelated parties were also recorded and the lower authorities had not brought on record with cogent corroborative evidences to prove which of those transactions actually pertain to the assessee herein. 13. We have heard the rival submissions and perused the materials available on record. At the outset, we find that 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. The Ld. AO observed that a statement of Ms. Parul Ahluwalia, Director and former employee of JBL, was recorded under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating 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. The relevant observations made by the Tribunal in this regard are as under:- "30. The banking transactions pertaining to other entities such as Aarthav Gems & Jewels Pvt. Ltd., Surasti Overseas Pvt. Ltd., M/s Saumya Bullion &Jewellers were also recorded in the account AP whereas it had nothing to do with the assessee. In the Remand Report dated 02.08.2021 the Assessing Officer verified all these banking transactions and accepted the contentions of the assessee. In other words, it was verified by the Assessing Officer that some of the banking transactions recorded in the account AP pertain to other entities and not the assessee. Only 23% of the total banking transactions pertain to assessee and remaining 77% are between JBL and other parties. In the facts of the assessee's corroboration is missing. It is for the searched party i.e. JBL to explain the contents of material recovered from his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have given our careful thought to the submission of the parties and perused the records. The facts are not in dispute. During assessment proceedings the common plea of the assessee in both the AY(s) was that merely entries found in the Hajir Johri ledger of M/s. JBL supposedly in the name of M/s. S.K. Impex, the proprietary concern of the assessee does not tantamount to actual transactions having taken place in the absence of any corroborative evidence such as bills, invoices, challans etc. There is no linking in the order of the Ld. AO/CIT(A) that the alleged cash transactions are substantiated by any supporting evidence as claimed by the assessee. On the contrary, the impugned additions are based purely on conjectures and surmises solely relying on the statement of Ms. Parul Ahluwalia, Director and former employee of M/s. JBL, the entity subjected to search operation during which her statement was recorded. The Ld. AR submitted before us that Ms. Parul Ahluwalia nowhere in her statement identified that alleged cash transactions related to the assessee. No specific questions in this regard were asked from her. Nothing is forthcoming from the side of the Revenue to controvert t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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