Section 153C Additions Deleted – Hazir Johri Software Entries Held Unreliable Without Corroboration

Brijesh Kumar Verma Vs DCIT (ITAT Delhi)

The ITAT Delhi allowed the assessee’s appeals for AY 2016-17 & 2017-18 and deleted additions made u/s 69A based on entries found in the “Hazir Johri” software seized during search on Jindal Bullion Ltd (JBL) Group. The AO had treated peak credit of ₹70.27 lakh and estimated profit @2% as undisclosed transactions solely relying on digital ledger entries and statements of third-party employees. The Tribunal observed that the seized data belonged to JBL and not to the assessee; therefore presumption u/s 292C could not be applied against the assessee. No corroborative material such as bills, stock records or independent evidence was brought on record, and the assessee was also denied cross-examination of the persons whose statements were relied upon.

Following earlier co-ordinate bench decisions in identical JBL search cases, the Tribunal held that additions cannot be sustained merely on third-party digital entries without corroboration. Consequently, proceedings u/s 153C failed on legal grounds, additions based on peak credit theory were deleted, and both appeals of the assessee were allowed.

FULL TEXT OF THE ORDER OF ITAT DELHI

The captioned two appeals are filed by the Assessee against two separate orders of Learned Commissioner of Income Tax (Appeals)-24, New Delhi, [ ld. CIT(A)] both are dated 30.12.2022 arising out of the assessment order passed u/s 153C/153(3) of the Income Tax Act, 1961 for Assessment Year 2016-17 and 2017­18. The details of the orders of AO is tabulated as under:

2. Since, in both the appeals, issues are common as well as grounds of appeal taken by the assessee are also common which fact is admitted by both the parties, therefore, both the appeals are taken together and decided by a common order.