Addition towards unexplained investment u/s 69 based on presumptions unsustainable

Anoop Kumar Soni Vs DCIT (ITAT Delhi)

ITAT Delhi held that entire addition towards unexplained investment under section 69 of the Income Tax Act merely on the basis of presumption is unsustainable in law.

Facts- During the course of search on M/s Jindal Bullion Ltd. Group (JBL) on 05.01.2017, data pertaining to the F.Y. 2014­-15, 2015-16, and 2016-17 in the form of digital data and loose sheets were seized. Digital data was maintained in a software named “Hazir Johri” at the residential cum business premises of Sh. Kusharg Jindal (promoter and Director of JBL) in a dongle. Loose sheets detailing daily pakka and kachha transactions of transfer of cash, gold and silver, found and seized at the residential premises of Sh. Parul Ahluwalia (Director of JBL).

AO held that the transactions detailed in the loose sheets have been fed into “Hazir Johri” software to create parallel books of accounts of JBL apart from those maintained in Tally Software. AO held that on analysis of the said data showed that JBL had been systematically engaged in cash transactions with a number of entities, mostly bullion traders and jewellers. The JBL books of accounts as maintained in the Hazir Johri software, contained both cash transactions of JBL as well as its transactions through banking channels. The transactions through banking channels are reflected in the Tally books of accounts of JBL whereas the cash transactions are not reflected in the same. AO held that in the Hazir account of a particular entity, there were transactions like “cash received” and “gold paid” in lieu of the cash received. Along with these transactions there is description of amounts received by JBL from that particular entity through banking channels and the gold/silver paid in return.

AO has totaled up the entire credits in the said account for the year amounting to Rs.1 ,72,92 ,950/- and treated the same u/s 69 of the Income Tax Act, 1961. CIT(A) computed the peak unaccounted cash involved and determined the unexplained investments to Rs.11,70,000/- against the addition of Rs.1,72,92,951/-.

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