Addition based on some dummy name without incriminating material is unjustified

Nirmal Uppal Vs DCIT (ITAT Delhi)

ITAT Delhi held that addition based on some dummy name without incriminating material reflecting name of the assessee is unjustified.

Facts- The search and seizure operation was conducted in the Jindal Bullion Ltd. (JBL) Group on 05.01.2017 and from the incriminating material recovered in the form of data it was allegedly found that it is systematically engaged in cash transactions with a number of entities. The transactions through banking channels are reflected in the Tally books of the accounts whereas the cash transactions are not reflected. In this context, from the data name of a suspect beneficiary of accommodation entry, “Saurabh Ji, CA” was found and it was thereafter found from the bank and cash transactions mentioned in the ledger that the present assessee Smt. Nirmal Uppal, was the real beneficiary.

Accordingly, a notice u/s 153(c) was issued. A statement of Sh. Parul Ahluwalia, director and formal employee of JBL was recorded u/s 132(4) of the Act on 05.01.2016 and he was confronted with the loose sheets detail. On the basis of accounts maintained in Hajir Johri accounting software, it was found that on 03.12.2015 a sum of Rs. 27,42,000/- was received in the form of cash and thereafter on 05.12.2015, JBL issued a cheque of State Bank of India payable to Nirmal Uppal. The assessee had explained that she was an employee of the office of the Accountant General and earning salary and rental income from house property. She claimed that during the relevant financial year she sold her jewellery for the sale consideration of Rs. 27,02,000/-.

Conclusion- The Bench is of considered opinion that as the assessee is former Central Government Employee who retired from the office of Accountant General it can be very well believed that she must have been holding some jewelry. The AO without trying to make any further inquiries from the assessee to ascertain the truthfulness of her holding of the jewellery proceeded to out rightly discard the explanation. Admittedly in the alleged incriminatory material the name of assessee is not reflected and based upon some dummy name she has been connected to the transactions.

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