Shri Ambica Garments Vs ACIT (ITAT Jaipur)
In a search conducted on 01.10.2018 in the Karnani Group, the Department found a parallel Tally data named “Jai Shree Ram” in the case of Shri Ambica Garments & its proprietor Shri Sanjay Kumar Karnani. This seized data reflected much higher sales, purchases, capital & loans than what was disclosed in the regular audited books. Based on this, assessments u/s 153A were made for six years each, rejecting the regular books & making additions towards higher gross profit, unexplained capital, unsecured loans & income of sister concerns.
Assessees argued that the seized Tally data was not real books, but only internal workings, & that regular audited books should be accepted. They also claimed that opening capital balances could not be taxed u/s 68 & that once books are rejected u/s 145(3), separate additions u/s 68 should not be made. However, Tribunal held that jurisdiction u/s 153A was valid since incriminating material was found. It further held that the seized Tally data was reliable & represented actual business records, especially as even bank instrument numbers matched between seized data & regular books. Presumption u/s 292C applied & Assessee failed to disprove the correctness of the seized data.
